Dismissing an employee in Lithuania: which documents, in which order

The ground for dismissal decides the documents. Termination by agreement needs a written offer and written consent. Termination at the employee’s initiative needs the employee’s written notice. Dismissal without fault on the employee’s part, or at the employer’s will, needs a written warning notice. Dismissal for fault needs a written request for an explanation. The end is the same in every case: the employer’s written decision, an entry in the employment contract and a notification to the State Social Insurance Fund administration (Sodra). Below, each ground separately, in order.

How much notice to give and what severance pay is due, we covered in a separate article (in Lithuanian). How to make a dismissal for fault stand up in a dispute, in another (in Lithuanian). This one is not about money. It is about the paperwork and its order.

What every ground has in common

The last document is always the employer’s decision. Article 65(3) of the Labour Code of the Republic of Lithuania (DK) requires it to be made in writing and to state the ground for termination, the legal provision and the date the employment ends. In practice this is an order signed by the manager.

The day the employment ends is the employee’s last working day, except where the contract is terminated while the employee is absent from work or is not allowed to work that day (DK Article 65(5)). This matters when the planned end falls on a weekend: count from the last working day, and settle up on that day.

One exception often surprises employers. If the employee is ill or on leave on the end date, the end date is moved to the end of the sick leave or holiday. This rule does not apply, however, when the contract is terminated by agreement or at the employee’s initiative, when a fixed-term contract expires, or when the employer ceases to exist. For an employee nursing a seriously ill child under sixteen, the end is moved by a further two months after the sick leave ends (DK Article 65(6)).

After the decision, an entry is made in the employment contract, and Sodra is notified no later than the next working day after the day the employment ends (DK Article 65(7)).

If the company is being liquidated, the archivist will usually ask not only for the employment contracts but also for every order of the manager relating to staff and every employee request. It pays to keep them in one place from day one, even if they are only emails and scanned copies.

Termination by agreement (DK Article 54)

The order is: written offer, written consent, agreement and order.

Article 54(2) of the Labour Code (DK) requires the offer to be made in writing and to set out the terms: from when the employment ends, the amount of compensation, how unused leave is dealt with, and how payment is settled. The other party gives its consent in writing (DK Article 54(3)). The agreement, or the written consent, ends the employment contract on the terms stated in it (DK Article 54(4)).

Article 54 does not set the amount of compensation. The offer sets it, and it is a matter for negotiation. The amounts for other grounds of dismissal do not apply to an agreement. They can only be used as a reference point in negotiations.

In practice, this route works. First, the terms are discussed informally. Then the employee is sent an email setting out the terms and asking for written confirmation that they are agreed. Once confirmed, an agreement on the same terms is signed. When we draft the agreement for clients, we usually leave the amount blank.

One note on wording. In the letter, write “we propose”, not “we inform you”. An agreement means both parties consent. A letter announcing a decision already made is not an offer.

One point is often missed. Agreements initiated by the employer count towards a collective redundancy, together with dismissals without fault and at the employer’s will. For example, a collective redundancy is the termination, within a period of no more than thirty calendar days, of ten or more employees at a workplace with an average of twenty to ninety-nine employees (Article 63(1) of the Labour Code, DK). In that case the works council must be informed and consulted before the decision (DK Article 63(3)), and the Employment Service (Užimtumo tarnyba) must be notified in writing after the consultations end, no later than thirty days before the employment ends, and no later than when the employees are given notice (DK Article 63(4)). If the duty to notify or consult is breached, the employment contract cannot be terminated (DK Article 63(5)).

When the employee rejects the offer

If the employee does not reply within five working days, the offer is deemed rejected (DK Article 54(3)). Agreeing to every term except one is not consent but a counter-offer.

Neither a refusal, nor the fact that the employee works “not as well as we would like” or delays tasks, is a ground for dismissal. At the employer’s initiative without fault on the employee’s part, a contract is terminated only for the reasons listed in Article 57(1) of the Labour Code (DK): a redundant job function, failure to achieve results under a performance improvement plan, refusal to work under changed terms, refusal to continue employment on a transfer of business, and the employer ceasing to exist.

After a refusal there are four routes:

• Improve the offer and keep negotiating: usually the cheapest route.
• If the problem is performance, draw up a performance improvement plan. We described the procedure in the FAQ of our dismissal service page (in Lithuanian). In our experience, in a small company without a company-wide performance assessment system, this ground is hard to prove.
• If the function is genuinely no longer needed, dismiss on grounds of a redundant function. If several employees perform that function, those to be dismissed must be selected by criteria that the employer approves after agreeing them with the works council (or, where there is none, the trade union), and with the statutory priority right to remain in employment. The selection is made by a commission set up by the employer, which includes at least one member of the works council where there is one (DK Article 57(3)).
• Terminate the contract at the employer’s will (Article 59(1) of the Labour Code, DK): the route with the largest severance pay. Its conditions, and how they change from 1 November 2026, are in the section on the employer’s will.

The employee’s notice of resignation (DK Article 55)

Here there is one document: the employee’s written notice (Article 55(1) of the Labour Code, DK). No separate agreement is needed. When the notice period ends, the employer records the termination no later than on the last working day (DK Article 55(3)). The notice periods and withdrawal of the notice are covered in the FAQ of our dismissal service page (in Lithuanian).

A note from our practice: if the initiative to end the employment is the employer’s, do not ask the employee to write a resignation “of their own free will”. Offer an agreement instead. Why, we explained earlier (in Lithuanian).

Without fault on the employee’s part (DK Article 57)

The order is as follows.

1. Record the ground in a document. For a redundant function, a decision on changes to the organisation of work. For performance, a signed performance improvement plan and its assessment.
2. Check the restrictions. From the day the employer learns of the pregnancy until the baby is four months old, a pregnant employee cannot be given notice of dismissal, except where the employer ceases to exist (Article 61(2) of the Labour Code, DK). An employee raising a child under three cannot be dismissed for a redundant function, performance or refusal to work under changed terms (DK Article 61(3)). An employee called up for compulsory military service, voluntary non-permanent military service or alternative national defence service cannot be dismissed (Article 61(4) of the Labour Code, DK). Members of the works council and of the governing bodies of an employer-level trade union, and the employee trustee, may be dismissed during their term of office and for six months after it only with the consent of the head of the territorial division of the State Labour Inspectorate (Valstybinė darbo inspekcija) (Article 168(1) and (3) of the Labour Code, DK Article 168(1), DK Article 168(3)).
3. Check for vacancies. For dismissal on grounds of a redundant function, there must be no vacancy at the workplace to which the employee could be transferred with their consent, throughout the period from the notice until five working days before the notice period ends (Article 57(2) of the Labour Code, DK). If such a vacancy appears, it must be offered.
4. Deliver a written warning notice (Article 64(1) of the Labour Code, DK). It must state the reason for termination, the legal provision and the date the employment ends (DK Article 64(2)).
5. During the notice period, at the employee’s request, give time off to look for a new job: no less than ten per cent of the previous working time (DK Article 64(6)). With the employee’s consent, you may also release them from work for the rest of the notice period, but pay for the whole notice period (DK Article 64(5)).
6. Make the written decision and settle up.

For fault on the employee’s part (DK Article 58)

Documents: a record of the breach, a written request for an explanation and the employee’s explanation, and, for a second breach of the same kind, also the earlier warning of possible dismissal (Article 58(4) of the Labour Code, DK). Only then the decision, which must be made within the statutory time limits. From 1 November 2026, time the employee was absent through sick leave or holiday is not counted in the one-month period for warning of possible dismissal for a second breach (DK Article 58(4), DK as in force from 1 November 2026). From that date the same exclusion is written into the time limits for the decision itself: one month from when the breach came to light and six months from when it was committed (DK Article 58(6), DK as in force from 1 November 2026). There is no notice period here – the contract is terminated without notice (DK Article 58(1)).

Check in advance whether this ground is available at all. A pregnant employee cannot be dismissed for fault from the day the employer learns of the pregnancy until the baby is four months old: DK Article 61(1) allows termination during that period only on the grounds it lists, and dismissal for fault is not among them (DK Article 61(1), DK Article 61(2)). Employee representatives also need the State Labour Inspectorate’s consent here: the protection covers dismissal at the employer’s initiative (DK Article 168(3)), and dismissal for fault is exactly termination at the employer’s initiative (the heading of DK Article 58). How to prepare these documents so that they stand up in a dispute, we described separately (in Lithuanian).

At the employer’s will (DK Article 59)

Documents: a written warning notice and the decision. Notice is three working days, and severance pay is no less than six months’ average pay (DK Article 59(1)).

Until 31 October 2026, the employer may terminate the contract for reasons not listed in DK Article 57(1) (DK Article 59(1)). From 1 November 2026, only “for a justified reason”, and this ground cannot be used by budget-funded institutions, state or municipal enterprises, public institutions owned by the state or a municipality, or the Bank of Lithuania (DK Article 59(1), DK as in force from 1 November 2026). The notice period and severance pay do not change, and the change to the list of excluded employers does not affect private companies. From that date, it pays to state the reason concretely in the notice and the decision, and to keep the evidence for it.

The main restrictions:

• employees on maternity, paternity or childcare leave cannot be dismissed (DK Article 61(3));
• a pregnant employee cannot be given notice or dismissed on this ground from the day the employer learns of the pregnancy until the baby is four months old (DK Article 61(2));
• an employee called up for compulsory military service, voluntary non-permanent military service or alternative national defence service cannot be dismissed (DK Article 61(4));
• employee representatives may be dismissed during their term of office and for six months after it only with the consent of the head of the State Labour Inspectorate’s territorial division (DK Article 168(3));
• an employee cannot be dismissed for reporting a breach, taking part in proceedings against the employer or exercising rights under the Labour Code, or for other discriminatory reasons (DK Article 59(2)).

Dismissal during the probation period (DK Article 36)

Having found the probation results unsatisfactory, the employer may, before the probation period ends, decide to terminate the contract, giving the employee written notice three working days before the contract ends, and pay no severance (Article 36(3) of the Labour Code, DK).

The order is: a written assessment by the direct manager, a written warning notice, the decision. The first document matters most. The reason during probation can be simple, but there has to be one. In the assessment, state concrete facts: which tasks were not done or were done badly, what complaints there were. If the employee challenges the dismissal, this assessment will be your main evidence. We wrote more about this earlier (in Lithuanian). How long probation may last is answered in the FAQ of our labour law documents service page (in Lithuanian). From 1 November 2026, an employee whose monthly pay is at least two national average monthly gross wages may be given a longer probation period, but not longer than six months (DK Article 36(2), DK as in force from 1 November 2026).

Watch the calendar. The decision must be made before the probation period ends, and the notice given three working days before the contract ends. Leaving it to the last week is risky.

One exception: a pregnant employee cannot be dismissed for unsatisfactory probation results. During pregnancy, Article 61(1) of the Labour Code (DK) allows termination during probation only at her own initiative. The other grounds listed there, such as agreement of the parties, remain available.

How to start

Send us the employment contract, a short description of the situation and the ground you are considering. We will prepare the documents you need in the right order: the offer, the warning notice or the request for an explanation, and the order.

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

More about this service: dismissal from employment.