What needs to be changed in the employment contract

02.09.2022 Aleksandrs Koposovs, the member of the board

On August 1, 2022, amendments to the Latvian Labor Law came into force. There are few changes, but, in particular, they touched on Article 40, which is responsible for what should be indicated in the employment contract. This article establishes mandatory requirements for the employer in relation to the drawing up of an employment contract.

Today (together with new changes), the employment contract must indicate the information specified in the following paragraphs of the law:
1) given name, surname, personal identity number (for a foreigner who does not have a personal identity number – date of birth), place of residence of the employee, or the registration number and address of the employer;
2) the date of establishment of the employment legal relationship;
3) the expected duration of the employment legal relationship (if the employment contract is concluded for a specific period);
4) workplace (if the performance of work is not provided for at a certain workplace, the fact that the employee can be employed at different places) or that the employee can freely determine his workplace;

This paragraph was supplemented by the possibility not to indicate a specific place of work, but to replace it with the phrase about the free determination of the workplace. Probably, these changes have arisen in connection with the recently widespread form of work, such as remote work.

5) profession, position, specialty (hereinafter referred to as the profession) of the employee in accordance with the Classification of Occupations and the general characteristics of the work stipulated by the contract;
6) the amount of remuneration and the time of payment;
7) the agreed working time per day or per week, if the work schedule of the employee is fully or largely provided. If part-time work is agreed and the work schedule is not provided for in whole or in large part, it is indicated that the work schedule is variable, and information is also included on the agreed working time, which is guaranteed paid working time within a month, as well as information during which the time the employee can perform the work or he would be obliged to perform the work, and information on the minimum notice period before starting work or resuming it;

Point seven has been completely revised. Now, if an employee has a part-time job, then it is necessary to determine the guaranteed paid time in the working month for him.

8) duration of annual paid leave;
9) the term and procedure for warning about termination of the employment contract;

In the ninth clause, the word “procedure” was added. Accordingly, the contract must indicate not only the term of termination, but also tell how the employee will be informed about the termination of the employment contract and how the employment relationship will be terminated.

10) a reference to a collective labor agreement, labor regulations applicable to labor legal relations;
11) the probationary period and its duration, if such a probationary period is appointed;
12) the right of the employee to training, if the employer provides such;
13) those social security municipalities that receive social contributions related to labor relations and any social security protection provided by the employer, if the employer is responsible for this protection.

11, 12 and 13 are the clauses that have been added.

About the “probationary period” was previously indicated in article 47, and the employer already finds such a presence in the contract if it is necessary to indicate it, but it was absent as a mandatory requirement. Now it is.

Previous editions subsequently mentioned that the training was provided at the employer’s expense. Then the legislator changed the law and provided the employer with the opportunity to receive compensation from the employee for the training provided, but in a special manner based on a separate written agreement (Article 96). Now, the right to training must be additionally determined in the employment contract.

Considering that an employee of a Latvian company may be a foreigner (including an employee performing remote work) who wishes to pay social security contributions in his own country, it is logical that the legislator has determined the obligation to indicate the municipality that will receive social contributions. For Latvian workers this is SSIA.

The information specified in clauses 11, 12 and 13, as well as in clauses 6, 7, 8 and 9, can be replaced by a reference to a collective labor agreement or a reference to labor regulations.

Another innovation worth paying attention to is the obligation to inform in writing an employee who is sent by the employer on a business trip or a work trip to another state about:
1) the country or countries in which the work is intended to be performed, and the anticipated duration of the performance of work;
2) the currency in which wages will be paid;
3) the cash benefits or benefits in kind in relation to the work tasks if such are provided;
4) the possibility of and procedures for repatriation if such is provided.

The information referred to in clauses 2, 3 and 4 shall be submitted if the business trip or work trip lasts more than four consecutive weeks.

Written informing of the employee can be carried out on the basis of a written agreement between the employer or the employee or by issuing a written order of the employer, which is also signed by the employee after familiarization.

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