How to change working conditions and raise pay without amending every contract

The line runs through parts 1 and 4 of Article 45 of the Labour Code (DK). The essential and additional terms of the employment contract, the type of working-time regime and the work location may be changed at the employer’s initiative only with the employee’s written consent — that is what Article 45(1) DK provides. All other conditions not mentioned in that part may be changed by the employer by its own decision, where the rules governing them change or where there is an economic, organisational or production necessity — that is Article 45(4) DK. So all the practical work consists in placing as many details as possible on the second side of that line.

What the contract must contain, and what it need not

Article 34(1) DK specifies only three things that must be agreed in every employment contract: the work function, pay and the workplace. Everything else is either additional terms or documents approved by the employer.

Article 43(2) DK requires amendments to the employment contract to be made in writing too. This means that every detail written into the contract later costs a signature — from every employee, every time.

From this follows our practical recommendation, which is not a legal requirement: keep the employment contract short and move the details into documents approved by the employer — the job description, the work rules, the pay system and the notice of working conditions. Then a change does not need every employee’s signature.

One case: pay rises every January

The question HR departments ask every January goes like this: when raising salaries, do we have to sign an amendment to each employee’s contract?

In practice, a change in the employee’s favour is formalised by a unilateral order of the employer. There is no need to amend every employment contract. Most of our clients do it this way, and this is what we recommend.

We will say where this is practice and where it is law. Pay is an essential term, and Article 45(1) DK requires written consent for it to be changed at the employer’s initiative. The order practice rests on the fact that an employee does not object to a change in their favour, and the last sentence of Article 33(4) DK separately notes that a term of the employment contract may in any case improve the employee’s position compared with that established by the Code. The safest form is still a written amendment. If pay is raised for a whole group by a single order, make sure the order is delivered to the employees and that delivery can be proven.

One case: an amount in the contract with no explanation

The contract stated a monthly amount and nothing more. Neither “before tax” nor “net”. Some years later, the question arose as to which amount the parties had meant.

The answer we gave: an amount stated in a contract without explanation is treated as the amount before tax. We do not cite an article here — we base this conclusion on practice, not on a specific provision of the Code.

In the same situation, we suggested that the client prepare contract amendments for all employees whose contracts contained ambiguous wording. Not because a dispute already existed, but because ambiguous wording sooner or later turns into a dispute. An amendment for one person costs a few minutes. A dispute over the same sentence costs months.

One case: notices by email

One set of contracts contained a clause under which sending a document to the employee’s email address was treated as equivalent to delivery with acknowledgement of receipt. A clause like that is convenient, and it works in day-to-day operations.

You need to know where its limit lies. Article 64(3) DK provides that if the employee disputes the lawfulness of the dismissal, the burden of proving that the notice was served lies with the employer. A contractual clause does not release the employer from that burden — it only helps it carry it. So email is suitable for everyday notices, but important documents need either a signature or a method of sending whose receipt can be shown to a third party.

Flexible schedule: what to put in the contract

The type of working-time regime is among the matters for which Article 45(1) DK requires written consent. So it is better not to fix the details of the schedule in the contract.

Our recommendation — and it is a recommendation, not a rule of law: state only the number of hours in the contract, and describe the schedule in the notice of working conditions. Agree separately and in advance on night work, weekend work or overtime.

If a flexible working schedule is set, the rules in parts 1 and 2 of Article 116 DK apply. Part 1 (Article 116(1) DK) provides that the start and/or end of the working day is set by the employee. Part 2 (Article 116(2) DK) provides that the employer sets fixed hours of the working day during which the employee must work at the workplace, and that this time may be changed by notifying the employee no later than two of the employee’s working days in advance. The two-day time limit is the one almost everyone forgets in practice.

When pay is high, the rules are different

Article 33(4) DK sets a separate regime for contracts where the monthly pay is not less than twice the most recently published national average monthly gross wage. In such contracts, the mandatory rules of the Code may be departed from, provided that a balance between the interests of the employer and the employee is achieved.

The exceptions to this freedom are listed in the same provision, and they are broad: maximum working time and minimum rest time, the conclusion and termination of the employment contract, the minimum wage, occupational safety and health, gender equality and non-discrimination. This means that the dismissal procedure cannot be changed under this provision.

How to start

Send us your employment contract template and a list of what you want to change. We will tell you which changes require signatures and which require only an order, and which contract clauses are worth moving into separate documents. The first assessment is free of charge.

Tel. +370 5 212 1506, email info@linden.lt

More about this service: drafting labour law documents.