ON PUBLIC SECTOR PAY INCREASE

On 8 September 2023, the Coordination Council of the Lithuanian trade union „Solidarumas”
adopted a resolution “On Public Sector Pay Increase“.
The Lithuanian trade union „Solidarumas” is outraged by the Government’s plans to „freeze” the
pay in the public sector until 2026.
When negotiating the National and Sectoral Collective Agreements, trade union representatives
often hear ministry representatives claim that „the state budget is not made of rubber, and no
overrides are possible”, therefore there is no possibility to increase employee pay in the public
sector.
However, according to the Lithuanian Ministry of Finance, the budget is currently collecting a
record amount of revenue, not counting EU financial support, which is truly unprecedented in
the history of Lithuania.
In January-May 2023 alone, state and municipal budgets received almost as much revenue as
throughout the whole of 2018!
In the first half of this year, the state and municipal budgets collected €8,681.9 million, or 8.6%
(€686.7 million) more revenue than in 2022, which was also a record year with €15,901 million
in revenue, that is, with an increase of €2,640.7 million (19.9%) compared to 2021. The year
2021 was also a record year with €13,260.3 million in revenue, that is, €2,538.4 million (23.7%)
more than in 2020.
In 2020, the state and municipal budgets collected €10,721.9 million, in 2019, the revenues
amounted to €10,783.3 million, in 2018, the amount collected was €8,740.3 million and in 2017,
the revenues were €8,027.3 million.
In 2015, revenues amounted to €7,107.6 million, and in 2014 the total amount equaled LTL
(Lithuanian Litas) 22916.8 million (€6,642 million).
By contrast, public sector salaries „in hand“ (after taxes) have not risen as much over the same
period.
However, this pay rise was also „eaten up” by inflation, which was particularly high in 2021-

2022. According to the forecast made by the Ministry of Finance, inflation will rise by another
      8.9% throughout the year 2023.
      Furthermore, employee income has been further squeezed by faster-than-inflation rises in the
      prices of food, energy, transport, utilities, and other everyday goods and services, which have hit
      lower-paid public sector employees particularly hard.

It is therefore not surprising that there is a shortage of almost all public sector employees in
Lithuania: teachers, medical doctors, employees of the Migration Department, employees of the
Social Security Agency, etc.
Around half of the competitions for vacancies in the civil service are not held because there are
no interested persons to take part in them. As a result. staff turnover is high due to heavy
workloads and uncompetitive salaries.
The shortage of public sector employees will even heightened by the entry into force of the Law
on the Civil Service in 2024 and by the draft laws prepared by the Ministry of Social Security
and Labour and submitted to the Seimas for discussion, without any coordination with the trade
unions as the social partners:

1. No 23-12711 „ON THE SUBMISSION OF DRAFT LAWS ON THE AMENDMENT OF
   THE REPUBLIC OF LITHUANIA LAW ON THE REMUNERATION TO EMPLOYEES
   OF STATE AND MUNICIPAL PUBLIC BODIES OF THE REPUBLIC OF LITHUANIA
   AND COMPENSATION FOR WORK OF MEMBERS OF THE COMMISSIONS OF
   THE REPUBLIC OF LITHUANIA XIII-198″ AND THE AMENDMENT OF THE
   REPUBLIC OF LITHUANIA LAW ON THE REMUNERATION OF STATE
   POLITICIANS AND STATE OFFICIALS VIII-1904‘ TO THE SEIMAS OF THE
   REPUBLIC OF LITHUANIA.
2. No 23-12712 ‘LAW ON THE AMENDMENT OF THE REPUBLIC OF LITHUANIA
   LAW ON THE REMUNERATION TO EMPLOYEES OF STATE AND MUNICIPAL
   PUBLIC BODIES OF THE REPUBLIC OF LITHUANIA AND COMPENSATION FOR
   WORK OF MEMBERS OF THE COMMISSIONS OF THE REPUBLIC OF LITHUANIA
   XIII-198″
3. No 23-12713 „LAW ON THE AMENDMENT OF ARTICLE 59 OF THE LAW ON
   EDUCATION OF THE REPUBLIC OF LITHUANIA No I-1489″.
4. No 23-12714 „LAW ON THE AMENDMENT OF THE REPUBLIC OF LITHUANIA
   LAW ON THE REMUNERATION OF STATE POLITICIANS AND STATE OFFICIALS
   VIII-1904‘.
   Since, unlike the private sector, where managers’ effectiveness is measured in terms of profits,
   in the public sector it is more challenging to measure performance. The above-mentioned
   amendments will allow heads of public bodies to turn into rulers, granting them the power to
   introduce authoritarianism and set the salaries of employees at their discretion rather than
   introduce performance-based appraisal. As a result of such a policy, they might introduce the
   unfair practice of nepotism, forcing specialists to quit their jobs and granting these jobs to their
   friends and relatives, even if they are of lesser competence. Such a policy will also limit the
   activity of trade unions and block the formation of trade unions.
   We therefore regard the plans to „freeze” employee salaries and to legalise the arbitrariness of
   the heads of public bodies as detrimental to the state. It will undermine the ability of the state to
   do its job properly and to accomplish its goals as it will encourage employee resignation from
   the public sector, especially skilled professionals, who are already scarce.
   The European Commission and the Organisation for Economic Co-operation and Development
   (OECD) are calling for an increase in the availability and quality of public services, which they
   consider inadequate in Lithuania.
   At a time when prices and salaries in the public sector are rising steadily and the state and
   municipal budgets are collecting record revenues, the Lithuanian trade union „Solidarumas” is
   categorically opposed to any attempt to „freeze” the wage fund of workers employed in public
   sector bodies and calls for a pay rise in the public sector as quickly as possible. The failure to act
   promptly will encourage employees to look for jobs elsewhere and will undermine the state’s ability to carry out its tasks in a dangerous global geo-political situation in the wake of the ongoing aggression of Russia against Ukraine.