Topic 1 Introduction to the labour market of the Lithuania, employment contracts and rights

Any employment relationship between an employer and an employee must be formalised in a contract. This is an agreement whereby the employee offers the employer certain services in return for remuneration, which the employer controls and directs.

An employment contract sets out the rights and obligations of both the employee and the employer.

The employment relationship ends when the employment contract becomes void. This can happen when the employer unilaterally decides to terminate the contract, with or without giving a reason. In this case, the employee is dismissed. Another possibility is termination of the employment contract, which means that the agreed obligations and rights cease to exist.

Source of photo:

Before starting to wok at a hired job, the newly employed person has to conclude with the hiring employer a written contract in two copies. The employee should be given a copy for their records, and the employer keeps the other copy. If both parties agree, the contract may be signed electronically. In the employment contract, the workplace, job position and responsibilities, the amount of salary and the procedure of its payment should be clearly stated. One copy of the employment contract is delivered to the employee, and the other one to the employer.

If a person starts working without having concluded a written employment contract, or if the employer did not inform The State Social Insurance Fund Board (Sodra) of the commencement of the employment, the work will be treated as illegal. Liability for illegal work is borne by employer, however the employee may also experience some negative consequences: individuals who work illegally are not insured with state social insurance and do not possess valid health insurance.

Offer letters are not common in Lithuania, and probationary periods cannot exceed three months.

Source of photo:

Main types of employment contracts in Lithuania are as following:

  • Open-ended (indefinite period of time)
  • Fixed-term (must not exceed 2 years with several exceptions the maximum duration is 5 years)
  • Temporary (concluded for a certain period of time)
  • Apprenticeship (employee is employed for the purpose of acquiring qualifications or competencies necessary for the position)
  • Project employment contract (fixed-term contract for job functions for the particular project)
  • Job-sharing employment contract (2 employees agree to share one job position)
  • Employment contract for work for several employers (concluding an employment contract with 2 or more employers when the duties carried out by the employee are the same)
  • Seasonal (concluded for the performance of seasonal works, might be concluded for up to 8 months during a year)

The most common employment contract in Lithuania is open-ended, which is signed for an indefinite period of time.

The terms and conditions must be included in each employment contract:

  • Employee’s position and job function i. e. a work requiring a certain profession, specialization, qualifications or a certain position
  • Remuneration in local currency and payment cycles (wage system, size of pay, payment procedures, etc.).
  • Employee’s place of work (enterprise, organization, structural division, etc.)

The parties may also agree on other conditions of the employment contract provided that this is not prohibited by the labor laws or regulations or the collective agreement.

In addition to employment termination by mutual agreement between the parties, the most common ways to terminate employment upon employer’s initiative, when there is no fault of the employee, are: dismissal due to objective reasons (ordinary dismissal) and dismissal upon the employer’s will.

The dismissal in both cases (i. e. ordinary dismissal and dismissal upon employer’s will) is not allowed during the period of the employee’s temporary disability (sick leave) and during the employee’s annual leave.

Protection against dismissal also applies to the following categories of employees:

  • pregnant employees;
  • employees who are called up for military service or alternative services;
  • employees on maternity, paternity, parental leave;
  • employees raising a child (or children) under 3 years of age.

Source of photo:

Workers who lose their jobs may be entitled to government unemployment benefits if they meet the following criteria:

  • They have worked for at least 12 months in the last 30 months
  • Have paid into the social security system during the period of employment
  • They are currently unemployed, of working age, actively looking for work, not refusing job offers and have an unemployed status
  • Not in full-time education
Source of photo:

The duration of the ordinary work time should not exceed eight hours a day and 40 hours a week. Due to the specific nature of work, certain institutions may apply other working standards, but in any case, the work time may not exceed 48 hours a week. If a person is employed by several employers or under several employment contracts, the duration of working day may not exceed 12 hours.

An employment contract of indefinite duration and a fixed-term contract of more than one month may be terminated by written notice given by the employee to the employer at least 20 calendar days in advance. The employee have the right to withdraw the notice of termination within three working days of the date on which it was given. Thereafter, she/he may withdraw the notice only with the consent of the employer. The employee’s statement terminate the employment contract at the end of the notice period.

Employees working 5 days a week are entitled to 20 days off and those working 6 days a week to 24 days off. After six months of work, the worker is entitled to take all the annual leave days.

Employees in the following categories are entitled to 25 working days of leave (30 days if they work 6 days a week):

  • Underage workers
  • Single parents with a child under the age of 14 (or 18 if disabled)
  • Disabled workers

The Labour Code lists 14 public holidays when companies, institutions and organisations are closed. The only exceptions to this rule are for work that cannot be interrupted for technical reasons (enterprises and organisations operating on a continuous basis), work related to the need to provide services to the public.

Opening hours are reduced by one hour on the eve of public holidays. If an employee works on a public holiday, he/she are entitled to double pay or additional time added to annual leave. Public holidays falling on the weekend are not moved to the next working day.


  • Source of photo:
    The employment contract with a foreign national must be concluded in two languages: the Lithuanian language and a language the foreign national understands;
  • The foreigner’s salary must not be lower than the salary of a Lithuanian resident working for the same employer in the same job position, or, if there is no such employee, the foreigner’s salary must not be lower than the average gross monthly salary in the national economy (including the salary data of individual enterprises) by the relevant economic activity, as published by the Lithuanian Statistical Department for the latest calendar year;
  • In the case of a temporary residence permit, the foreign worker will have to declare his/her place of residence in Lithuania;
  • Officials of the Migration Department can come at any time to check the employer and the foreigner working in Lithuania.