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Latvian labour legislation

New Latvian Labour Code took effect as of 1 June 2002. It balances employers and employees rights in accordance with EU directives, International Labour Organisation treaties and requirements of the European Social Hart. Modern international labour law provisions of the new code comply with market economy requirements.
Trade unions
Employees and employers alike have the right to freely unite in organizations or join them in order to protect their social, economic or vocational rights and interests
Equal opportunities
The code introduces principle of equal rights to work, to fair, safe and healthy working conditions and to a fair remuneration for the work. No discrimination is permitted between men and women over the terms and conditions of employment. Furthermore, the code makes it unlawful to discriminate on racial, age, religious, disability, political or any other belief, national or social origin, property or family status or other grounds in employment, promotion and training. It is also illegal to advertise for staff on a discriminatory basis.
Applicable law
For the first time employees and employers can agree upon that law which shall be applied to employment relations. If employee and employer do not choose an applicable law, the laws of Latvia or a state where the employee performs his work, or the laws of the country of the place of location of the employer, or the laws of the country to which legal labour relations are closely connected, must apply.
Collective agreements
A collective agreement may be concluded in writing between the employer and employees' trade union or by the employees authorized representatives. A collective agreement is binding to all employees who are employed by the particular employer unless established otherwise in the collective agreement. The parties to a collective agreement may agree upon those provisions which govern the content of employment relations, especially the organization of remuneration and labour protection, the establishment and termination of employment relations, improvements in the qualifications for employees, work regulations, employees' social security and other matters connected with employment relations, and may establish mutual rights and obligation.
Employment contracts in Latvia
An employer and employee establish mutual employment relations through an employment contract. Through an employment contract the employee agrees to perform certain work by abiding by particular work regulations and the orders of the employer and the employer - to pay the agreed salary and to provide fair, safe and healthy work conditions.
Disputes on rights between the employee and employer are to be settled through courts, unless settled within a company. All claims which arise from legal labour relations have a limitation of two years, unless a shorter period of limitation is stipulated by law.
A labour contract is deemed as concluded as of that moment when the employee and the employer have agreed about the work being performed and on the wage and also about employee's further obedience to the particular working regulations and employer's orders. A labour contract must be in writing. Employer has the obligation to secure the concluding of labour contracts in writing and perform the registration of labour contracts concluded. 
The labour contract may be concluded for indefinite period of time, except for a temporary work.
The period of the labour contract concluded for a definite period of time cannot be more as two years (including the extensions of the term).  When that period for which a labour contract was concluded expires and no party has requested to terminate the labour contract and labour relations are actually continuing, the labour contract is deemed as concluded for the indefinite period of time.
Trial period
When concluding a labour contract the trial period can be established for the purpose of finding out whether an employee corresponds for the performance of work entrusted to him/her. If the establishing of examination is not indicated in the labour contract it is deemed as concluded without the examination. The period of the examination cannot be more than three months.
The minimum salary cannot be less than that minimum established by the government (LVL 200 in 2012). Employee who performs the overtime work during the weekends or holidays must receive an additional payment of no less than 100% of that hourly or daily salary rate established for him, but if the piece-work salary has been agreed upon - an additional payment of no less than 100% of the pricing for the performed amount of the piece-work.
Duties of confidentiality and non-competition
For the first time the Code introduce employee’s duties of confidentiality and non-competition. By the Code employee is obliged to not divulge that information at his disposal which is the commercial secret of the employer. The employer has the obligation to indicate in writing which information is deemed commercial secret.
Employee's and employer's agreement on the limitation of professional activity (limitation of competition) after the termination of labour relations is permissible only if the aforementioned agreement corresponds to the following indices:
n       its purpose is to protect the employer from such professional activity of the employee which can cause the competition to employer's business;
n       the period for the limitation of the competition is no longer as two years counting from the day of the termination of labour relations;
n       with regard to the entire period of the limitation of competition it anticipates the obligation of the employer to pay to the employee a monthly remuneration for the observing of the limitation of the competition.
Employee’s liability
If the employee without a valid reason does not perform the work or performs it insufficiently or due to some other illegal blameful activity has caused losses to the employer, the employee is obliged to compensate for losses which have occurred to the employer.
Several employers
Employee has the right to conclude a labour contract with several employers, unless stipulated otherwise in the labour contract or in the collective agreement
Employer has the right for no later than a month in advance to give a notice to the labour contract with the proviso that the labour relations will be terminated if the employee disagrees to continue them in compliance with those changes in the labour contract offered by the employer. Giving of such notice is permissible if it is justified by employee's behaviour, his abilities or by the performance of economical, organizational, technological or similar undertakings within a company.
Employee has the right for a month in advance to give a notice to the labour contract in writing, unless a shorter period for giving notices is established in the labour contract or in the collective agreement.
Employer has the right to in writing give notice to the labour contract if based only upon below circumstances which are connected with employee's behaviour, his abilities or the performance of economical, organizational, technological or similar undertakings within a company in the following cases:
n       employee without a valid reason has substantially violated the labour contract or the established working regulations;
n       employee, when performing the work, was acting unlawfully and therefore has lost employer's confidence;
n       employee, when performing work, was acting in contravene with good morals and such actions are not compatible with the continuation of legal labour relations;
n       employee was under the intoxication of alcohol, narcotics or toxins when performing the work;
n       employee was grossly violating the provisions of the labour protection and was threatening the safety and the health of other persons;
n       employee does not have sufficient vocational skills to perform the chartered work;
n       employee is incapable to perform the chartered work due to the state of his/her health and it is certified so by the physician's opinion;
n       that employee who previously was performing the corresponding work has been renewed to the position;
n       the number of employees is being reduced;
n       the employer (an entity) is being liquidated.
If important reasons exist, under exceptional procedure the employer has the right to within a month to raise a claim to the court on the termination of legal labour relations in those cases, which are not mentioned above. As such a reason is deemed every circumstance which, based upon considerations of moral and mutual honesty, does not permit to continue the legal labour relations. The matter on the existence of the important reason is resolved by the court upon its opinion. Here the legislature is virtually leaving the decision to the courts.
Upon giving a notice to the labour contract the employer is obliged to inform the employee in writing about those conditions which were the basis for the notice to the labour contract.
Employee and employer can terminate legal labour relations by agreeing mutually in writing.
Employer is obliged to prove that the notice to a labour contract is legally justified and corresponds to the established procedure for giving notices to the labour contracts. In other cases when the employee has raised the claim on the renewing to work the employer is obliged to prove that it, when dismissing employee, has not violated employee's rights to continue legal labour relations.
Working time
The regular daily work time for the employee cannot exceed eight hours, but the regular weekly work time - 40 hours.  The overtime is permissible if the employer and the employee have agreed upon it in writing.
Employer has the right to employ the employee at the overtime jobs without his consent in the following exceptional cases:
n       if so required by the most urgent needs of the society;   
n       in order to eliminate the consequences caused by the force majeure, accidents or other extraordinary circumstances which are unfavourably affecting or can affect the regular work process in the company;
n       for the completion of an urgent, previously not foreseen work within a definite period of time.
The overtime work cannot exceed 48 hours during the four-week period or 200 hours during a calendar year.
A five-day working week has to be established for the employee. If due to the nature of the work it is impossible to establish a five-day working week, the employer after consulting with employees' representatives may establish a six-day working week.
If the five-day working week has been established two weekly recreation days must be granted to the employee; if the six-day working week has been established - one weekly recreation day. Both weekly recreation days usually are granted in sequence.
Annual holidays
Each employee is entitled to a paid annual vacation of no less as four calendar weeks. By employee and employer agreeing the paid annual vacation for a current year can be granted in portions, however, one of the portions of the vacation for the current year can not be shorter as two subsequent calendar weeks.   In exceptional cases when the granting to the employee of the paid annual vacation for the current year in it's full extent can unfavourably affect the usual work process in the company, with a written consent of the employee it is permissible to transfer the vacation to the next year. In such event the portion of the vacation during the current year cannot be shorter as two subsequent calendar weeks. The transferred portion of the vacation as possible must be added to the next year's vacation. The portion of the vacation can be transferred for one year only.
Foreign employees in Latvia. Latvian work permits
Foreigners subject to immigration controls must obtain work permits in order to take up employment in Latvia. Generally, there must be no suitable resident labour available to fill the post and the employer must have made adequate efforts to find an employee from that source. A permit is issued only for a particular job with a particular employer and may be for a limited period. Application may then be made to extend the permit.
A two-tier system exists under which ‘fast track’ procedures apply to companies executives Other applications must be supported by evidence of educational qualifications and references and need to be advertised in advance.
The possession of a work permit does not absolve the holder from complying with separate immigration requirements.
Purchase of an existing business in Latvia
When ownership of an enterprise is transferred, for example, on the purchase of the business as a going concern, the employees’ rights under their contracts of employment are transferred automatically. As a result, the purchaser of the undertaking becomes the new employer and is normally responsible for any accrued rights of the employees. The employees’ rights remain unchanged following the purchase of the share capital of a company.

2023, December

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