Employment

Pre-contractual employment matters

Employment law issues may arise before an employment contract is signed. We advise employers when planning future employment relationships, assessing proposed employment terms and determining the employment arrangements most appropriate for a particular role and the needs of the business.

At this stage, we assist with:

• planning organisational and role structures;
• assessing the proposed terms of employment contracts and other matters relating to the establishment of employment relationships.

Conclusion and performance of employment contracts

During the employment relationship, it is important not only to prepare the employment contract properly but also to clearly define any additional rights and obligations of both the employer and the employee. We advise clients on entering into and implementing employment contracts, changing employment terms and preparing supplementary agreements.

Our services include:

• drafting employment contracts and advising on their conclusion and performance;
• advising on employment relationships with managerial employees and the specific rules applicable to them;
• drafting agreements on the reimbursement of training costs and advising on their application;
• drafting confidentiality agreements and provisions governing the protection of confidential information;
• drafting non-compete agreements;
• preparing employee remuneration and incentive schemes;
• preparing employee share option programmes – see our overview of employee share options in Lithuania;
• advising on the protection of company assets and the recovery of damages caused by employees.

Termination of employment

Termination is one of the areas in which an incorrectly selected legal basis or failure to follow the required procedure may result in an employment dispute. Before an employer makes a decision to terminate an employment relationship, we assess the applicable legal grounds, the required procedure, the relevant facts and documentation, available evidence and the potential risk of a dispute.

We advise on termination at the employer’s initiative and on other grounds, assist in preparing the necessary documentation and assess the legal and business risks associated with the end of the employment relationship. We also advise on obligations that may continue after termination, including non-compete and confidentiality obligations.

Employment disputes during and after employment

Employment disputes may arise both during an employment relationship and after it has ended. For employment disputes in Lithuania, we represent employers in negotiations with employees or their representatives, before the Labour Disputes Commission under the territorial offices of the State Labour Inspectorate and before the courts.

Individual employment disputes are generally first heard by the Labour Disputes Commission. If a party disagrees with its decision, the dispute may be brought before the courts and considered afresh. Legal assistance in an employment dispute therefore often begins before proceedings are initiated before the Labour Disputes Commission – with an assessment of the facts, relevant documents, available evidence and the potential dispute strategy.

We represent and assist employers:

• in negotiations with employees or their representatives;
• before the Labour Disputes Commission;
• before the courts.

More information on our broader litigation experience is available under our Dispute Resolution practice. A practical example of our employment work can also be found in the matter in which we represented a client before the State Labour Disputes Commission.

What should an employer do if a non-compete agreement is breached?

Whether a non-compete agreement has been breached must be assessed in light of the specific terms of that agreement. Depending on the restrictions agreed between the parties, a breach may include, for example, taking up employment with a direct competitor, carrying out competing activities or soliciting a former employer’s clients during the agreed non-compete period.

Article 38 of the Labour Code of the Republic of Lithuania provides that an employee must receive compensation during the non-compete period. If a valid agreement is breached, the employer may seek contractual penalties to the extent permitted by law, compensation for damages and, where necessary, interim measures from the court. We assess such disputes on the basis of the specific contractual terms and the available evidence.

Read more about our experience in a case where we defended a client’s interests in relation to an employee’s breach of a non-competition agreement.

Employment law audit and internal policies

Compliance with employment law requirements is relevant throughout the employment relationship. We therefore treat employment law audits and the preparation of internal policies as a separate area of our services.

As part of an employment law audit, we help identify the legal requirements applicable to a particular company, review the documentation already in place and identify potential compliance gaps. Based on the results of the audit, we prepare or update the necessary internal policies and other employment-related documents.

Our services include:

• employment law audits;
• drafting and updating internal work rules, remote-work policies and other internal company documents;
• drafting and updating workplace violence and harassment prevention policies and documentation;
• drafting and updating equal opportunities policies;
• drafting and updating internal whistleblower protection procedures;
• advising on compliance with employment law requirements.

When should an employer consult an employment lawyer?

An employment lawyer may provide valuable assistance at different stages of an employment relationship – when preparing an employment contract or supplementary agreements, changing employment terms, planning a termination, dealing with a dispute or assessing a company’s compliance with employment law requirements.

It is particularly important to assess the legal position before taking action that could potentially result in a dispute. Our employment lawyers and other members of the team help clients assess not only the legality of the proposed action but also its potential impact on the business. We provide both one-off employment law advice and ongoing legal support.

The risk of an employment dispute is often increased by an inaccurately drafted employment contract, supplementary agreements, insufficiently substantiated termination documents or an improperly drafted non-compete agreement. Motieka & Audzevičius therefore helps employers identify legal risks at an early stage and, where a dispute arises, develop the employer’s position and provide representation in negotiations, before the Labour Disputes Commission or in court.

FAQ

What employment documents is an employer required to have?

The documents an employer is required to have depend on the number of employees, the nature of the business and other relevant legal circumstances. Commonly required documents include employment contracts, internal work rules, a remuneration system, workplace violence and harassment prevention documentation, an equal opportunities policy and a whistleblower protection procedure.

We help determine which employment documents are mandatory for a particular company, which additional documents may be appropriate for risk management purposes, and prepare or update them as necessary.

How should employment relationships with an international element be managed?

In cross-border employment relationships, the applicable law is assessed by reference to the law chosen by the parties and the country in which or from which the employee habitually carries out their work. The place of work stated in the employment contract is not always determinative.

International corporate groups most commonly encounter issues involving business trips or postings to another country, remote working from abroad and the need to coordinate requirements across several jurisdictions. In such cases, we assess in advance which mandatory employment law rules may apply and which documents need to be aligned accordingly.

Is an employer required to have a lawyer before the Labour Disputes Commission?

No. Representation by a lawyer before the Labour Disputes Commission is not mandatory. However, a lawyer can help formulate the employer’s position more precisely, prepare the response, identify and submit relevant evidence within the applicable deadlines, and represent the employer at the Commission hearing.

Legal assistance may be particularly valuable where an employee’s claim involves multiple factual issues or significant financial exposure.

What is the difference between termination at the employer’s initiative and termination by mutual agreement?

These methods of termination differ in their legal basis, applicable procedure, notice requirements, payments and the associated risk of a dispute.

Termination by mutual agreement generally gives the parties greater flexibility and may reduce the likelihood of a subsequent dispute. However, the financial and other terms of termination depend on the negotiations between the parties and the circumstances of the particular case.

What documents should an employer prepare before an employment dispute?

An employer should have the employment contract together with all amendments, decisions and orders relating to the circumstances of the dispute, correspondence with the employee, working-time records and any other evidence relevant to the particular matter.

These documents should be assessed before the employer submits its position to the Labour Disputes Commission.