Employers Urge Saeima to Support Amendments to the Labor Law 0 11

The Latvian Confederation of Employers (LKE) together with the largest industry associations in Latvia has sent a letter to the Social and Labor Affairs Committee of the Saeima and parliamentary factions urging them to support the proposed amendments by employers so that the current regulations align with labor market requirements, encourage the conclusion of collective agreements, and enhance Latvia's competitiveness compared to other Baltic and European countries.

According to LKE, the current regulations hinder the conclusion of collective agreements and foster labor relations based on distrust. The amendments proposed by employers will ensure more accurate and balanced workload planning, fair compensation for workers, motivation for employers to accurately account for working hours, and tax revenues to the budget.

As noted in the letter, employer organizations propose to establish a one-year validity period for collective agreements after their expiration in the law, as well as to provide a six-month notice period for terminating obligations under the agreement. It is also proposed to set a basic compensation rate for overtime work at 50% and to exclude from the law the provision prohibiting the termination of labor relations with a union member without the union's consent.

LKE emphasizes that the government's proposals do not address or only partially address the objectives of the amendments to the Labor Law — encouraging the conclusion of collective agreements and developing social dialogue.

"In the modern labor environment, regular dialogue between employees and employers fosters quality social dialogue," states LKE, adding that the continuation of agreements after their expiration does not contribute to achieving the goal of the European Parliament and Council directive on fair minimum wages — to achieve coverage by collective agreements of at least 80%. Regular and timely negotiations on the terms of collective agreements are, in the opinion of employers, an important aspect for building reliable partnerships. Too long terms create a "vacuum" in which neither party seeks solutions, which diminishes the prestige of collective agreements — as indicated by the low level of coverage in Latvia.

Employers do not support the government's proposal to allow collective agreements to worsen workers' conditions, for example, by establishing a lower overtime pay rate.

LKE emphasizes that a collective agreement is a tool that allows workers to collectively achieve better and more stable conditions, while enabling employers to ensure predictability, orderly relations, and reduce the risk of individual labor disputes. Initiatives that undermine the balance of interests may further reduce workers' interest in concluding collective agreements.

Organizations propose to establish a basic overtime pay rate of 50%, while retaining the possibility of setting a higher rate in collective agreements. In LKE's opinion, such regulation will help better plan workload, prevent overtime work from becoming the norm, and enhance the competitiveness of Latvian employers both in the Baltic region and in Europe. Additionally, this will strengthen the effectiveness of the collective agreement mechanism, for which LKE believes it is necessary to create a clear accounting system for such agreements to assess the impact of regulation on their coverage.

Employers urge the exclusion from the Labor Law of the article prohibiting employers from terminating labor relations with a union member without the latter's consent. This creates inequality among all workers, giving unjustified advantages to a particular group and undermining trust in labor relations. Such a provision, in LKE's opinion, is disproportionate as it restricts the fundamental right of the employer to conduct business. Its repeal would restore equality and provide a stable foundation for social dialogue and the conclusion of collective agreements.

The letter was signed by LKE, the Latvian Chamber of Commerce and Industry, the Council of Foreign Investors in Latvia, the Exporters Association "The Red Jackets", the Association of Building Materials Manufacturers, the Financial Industry Association, the Latvian Construction Association, the Traders Association, the Insurers Association, the Health Employers Association, the Association of Mechanical Engineering and Metalworking, the Road Carriers Association "Latvijas auto", the Colleges Association, the Restaurant Association, the Latvian Information and Communication Technology Association (LIKTA), the Electrical Engineering and Electronics Industry Association, the Passenger Carriers Association, the Printing Association, the Auto Association, the Light Industry Enterprises Association, and other organizations.

The Social and Labor Affairs Committee of the Saeima will consider the amendments to the Labor Law on Tuesday, November 25.

As previously reported, in August of this year, the government supported the amendments to the Labor Law proposed by the Ministry of Welfare.

Among other things, the amendments provide for the possibility of reducing overtime pay. Currently, the law stipulates an additional payment of at least 100% of the established hourly or daily rate of the employee, but it is proposed to establish that the parties may agree on a lower payment, but not less than 50%.