How to hire and fire employees in Latvia according to Labour Law: General principles and Hiring the Employee
Forums For Adjudicating Employment Disputes
The Labour Dispute Law has been in force since 01.01.2003. Any party to an individual dispute regarding rights can apply to the court if the dispute has not been settled by negotiation between the employee and the employer or if any of the parties is not satisfied with the decision of the Labour Dispute Commission. Any party to a collective dispute regarding rights can apply to the court within one month if the collective dispute has not been settled in the Conciliation Commission. Any party to a collective dispute regarding rights can apply to the court if a Conciliation Commission is not established or settlement of the collective dispute is not commenced in a conciliation commission within one month from the submission date.
The Main Sources Of Employment Law:
- Labour Law, in force from 01.06.2002;
- Labour Protection Law, in force from 01.01.2002;
- Labour Dispute Law, in force from 01.01.2003;
- Support for Unemployed Persons and Persons Seeking Employment Law, in force from 01.07.2002;
- On Protection of Employees in case of Insolvency of Employer, in force from 01.01.2003;
- On Unemployment Insurance, in force from 01.01.2000;
- Strike Law, in force from 26.05.1998.
National Law And Employees Working For Foreign Companies
An employee and an employer may agree on the law applicable. However, if they have not chosen it, the laws of Latvia shall apply or the laws of another state if an employee normally performs his work in this another state. If none of this applies, the law of the state in which is located the undertaking which hired the employee or another state if it appears from the circumstances that the employment contract or employment legal relationships is more closely linked to it shall apply.
Hiring The Employee
Legal Requirements As To The Form Of Agreement
An employment contract shall be entered into in writing and shall be prepared in duplicate, one copy to be kept by the employee, the other by the employer.
- Trial Period
If an employment contract does not specify a probation period, it shall be regarded as entered into without a probation period. The period may not exceed 3 months. Moreover, a probation period shall not be determined for persons under 18.
- Hours Of Work
Working hours shall be specified by working procedure regulations, shift schedules, or by an employment agreement. Regular daily working time of an employee may not exceed eight hours, but for employees exposed to special risk and adolescentsseven hours. Before holidays the length of the working day shall be reduced by one hour.
The minimum wage shall not be less than the minimum monthly salary EUR 360 , as well as minimum hourly wage rates determined by the Cabinet. Appropriate supplement is due to an employee who performs additional work or work in special circumstances, performs night work (not less than 50 per cent of the specified hourly or daily wage rate) or performs overtime work or on a holiday (not less than 100 per cent of the hourly or daily wage rate).
- Holidays / Rest Periods
The length of a one day rest within a period of 24 hours shall not be less than 12 consecutive hours and for children – not less than 14 hours. The length of a weekly rest period within a seven day period shall not be less than 42 consecutive hours. If it is necessary to ensure continuity of the work process, it is permitted to require an employee to work on a holiday by granting him or her rest on another day of the week or by paying appropriate compensation. Every employee has the right to a break in work if his or her daily working time exceeds six hours, it shall be granted not later than four hours after the start of work and it may not be less than 30 minutes. Annual paid leave may not be less than four calendar weeks, not counting holidays. An employee shall be granted study leave for the taking of a State examination or the preparation and defence of a diploma work, which study leave shall not be less than 20 days a year. The employer may retain the average earning for such period. However, such obligation is not compulsory and depends on the mutual agreement between employee and employer.
An employer may request an applicant to undergo a health examination, which would allow verification that the applicant is suitable for performance of the intended work.
- Location Of Work/Mobility
Generally location of work is in the undertaking, however, an employee may be sent on official travel. A person under 18 years may be sent on official travel only if one of the parents has given a written consent.
- Pension Plans
Participants of the pension plan shall participate in the pension plan through the intermediation of their employer if the employer has concluded a collective participating contract with an open or closed pension fund, moreover, a collective participating contract with a closed pension fund may be concluded only in such cases when the relevant employer is also one of the founders (stockholders) of the same closed pension fund. Legal relationships of the employer and employees arising in connection with the implementation of a pension plan and participation of employees therein shall be regulated by the employment contract or collective work agreement.
- Parental Rights (Pregnancy/Maternity/ Paternity/Adoption)
The Labor Law provides prenatal and maternity leave as well as parental leave afterwards. Prenatal leave of 56 calendar days and maternity leave of 56 calendar days shall be summed and 112 calendar days granted irrespective of the number of days prenatal leave has been used prior to child-birth. A woman who has initiated pregnancy-related medical care at a preventive medical institution by the 12th week of pregnancy and has continued for the whole period of pregnancy shall be granted a supplementary leave of 14 days, adding it to the prenatal leave and calculating 70 calendar days in total. In case of complications in pregnancy, childbirth or postnatal period, as well as if two or more children are born, a woman shall be granted a supplementary leave of 14 days, adding it to the maternity leave and calculating 70 calendar days in total. Accordingly, taking into consideration above mentioned conditions, total time of prenatal and maternity leave may not exceed 140 days.
A woman who makes use of pregnancy or maternity leave shall have ensured her previous work. If this is not possible, the employer shall ensure the woman similar or equivalent work with not less favourable conditions and employment provisions. Concerning benefits of prenatal and maternity leave please see section Payments For Maternity And Disability Leave. The father of a child is entitled to leave of 10 calendar days immediately after the birth of the child, but not later than within a two-month period from the birth of the child. Parental leave shall be granted for a period not exceeding one and a half years up to the day the child reaches the age of eight years. Parental leave, at the request of an employee, shall be granted as a single period or in parts. The time spent by an employee on parental leave shall be included in the total length of service. An employee who has a child under one and a half years of age shall be granted additional breaks for feeding the child. For a family, which has adopted a child up to three years of age, one of the adopters shall be granted 10 calendar days of leave.
- Compulsory Terms
An employment contract shall include: Names and addresses of the parties; starting date and expected duration of employment; workplace; the trade, profession, speciality of the employee in conformity with the Classification of Occupations; the scales and intervals to pay; working time; the length of the annual paid leave; the term for giving notice of termination of the employment contract; the provisions of collective agreement.
Terms The employer and the employee are free to agree any other terms in addition to the compulsory provisions, provided that these terms are no less favourable than certain statutory rights.
Types Of Agreement
An employment agreement may be for an unspecified or specified period as well as collective agreement is possible where parties agree on the provisions regulating the content of employment relationships, in particular the organization of work remuneration and labour protection, establishment and termination of employment legal relationships, raising of qualifications, work procedures, social security of employees and other issues.
An employee has a duty not to disclose any information brought to his or her knowledge, which is a commercial secret of the employer and to ensure that the information is not available to third parties.
Ownership of Inventions/Other Intellectual Property (IP) Rights
If an author has created a work when performing his or her duties in an employment relationship, the moral and economic rights to the work shall belong to the author, except when the work is computer program the economic rights belong to the employer. However, the economic rights may be transferred in both cases.
Aliens (persons who are not Latvian citizens or non-citizens) may be employed only if they have received a work permit. If a non-national’s employment requires short term or occasional residence in the Republic of Latvia and does not exceed 90 days within half a year, the non-national is obliged to receive a visa or a temporary residence permit and a work permit. This provision refers also to non-nationals who do not need a visa for entering the Republic of Latvia. If a non-national’s employment requires regular residence in the Republic of Latvia and exceeds 90 days within half a year, the non-national is obliged to receive a temporary residence permit and a work permit. An employer wishing to employ a non-national shall submit to the branch of the State Employment Agency an employer’s work invitation. If an employer has intended to employ a non-national by entering into an employment contract, the work invitation may be approved if a vacant position or a specialist vacancy is registered at the branch of the Agency.
A work permit is not needed in the following cases:
- if the non-national enters in connection with road shows (concerts) as a performer (musician, singer, dancer, actor, dangler etc.), author (compositor, choreograph, film/stage director, stage designer etc.), administrative or technical worker who is responsible for ensuring performances (concerts) and if planned residence time does not exceed 14 days;
- if the non-national enters in accordance with an educational institution’s or a scientific institute’s or independent researcher’s invitation in relation to scientific studies or in order to participate in implementing educational programs and if planned residence time does not exceed 14 days.
Hiring Specified Categories Of Individuals
There are restrictions on who can be employed to carry out certain hazardous activities and restrictions on the types of work that vulnerable groups (e.g. children or pregnant women) can be required to undertake.
Outsourcing And/Or Sub-Contracting
If an undertaking or a part of it retains its independence after transfer of the undertaking, the status and functions of employee representatives affected by such transfer shall be retained with the same provisions that were applicable up to the moment of transfer of the undertaking. Such provisions shall not apply if the preconditions required for the re-election of employee representatives or for the reestablishment of representation of employees have been satisfied. The transfer of an undertaking shall mean the transfer of an undertaking or its autonomous part to another person on the basis of an agreement, as well as a merger or division of commercial companies.
Gunda Leite, English speaking lawyer and tax consultant of the Gencs Valters Law Firm in Riga.
Practising in fields of Labour Law in Latvia, Lithuania, Estonia.
T: +370 67 24 0090
F: +372 67 24 0091