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Dear client,
We are pleased to share the most relevant changes in Lithuanian employment regulation this summer:
- on 1 July 2018 a new Daily allowance and other business trip expenses policy (Daily allowance policy) comes into force;
- on 1 June 2018 a new Law on Protection of Commercial Secrets (Commercial secrets law) came into force.
The most significant Daily allowance policy changes
- Daily allowance “floor” restored – not less than 50% of the maximum rate. Under the Daily allowance policy valid until 2017, an employee could not be paid less than 50% of the maximum daily allowance rate. On 1 July 2017 the daily allowance “floor” was annulled so that an employee could be paid less than 100% of the maximum daily allowance rate. However, no indication was given as to how much the daily allowance could be reduced by or whether there could be an agreement that an employee would not receive any daily allowance whatsoever. The Daily allowance policy that comes into force on 1 July 2018 will introduce greater clarity by bringing back the daily allowance “floor” – not less than 50% of the maximum daily allowance rate. The new Daily allowance policy does not provide any exceptions to this rule.
- Changes in maximum daily allowance. For example, the daily allowance for travel to Denmark increases from EUR 57 to EUR 80, to Finland – from EUR 53 to EUR 69, to Sweden – from EUR 53 to EUR 65. The maximum rate of daily allowance was reduced for some countries in Africa. Several countries were removed from the Daily allowance policy (eg Barbados, El Salvador). A general rate of EUR 31 will be applicable for these countries.
- Changes in calculating daily allowance on the day of return from a foreign country. Until now the daily allowance was reduced to 50% of the maximum rate for the day of return to Lithuania. The new policy coming into force on 1 July 2018 does not provide for this case of daily allowance reduction.
We recommend evaluating how relevant these changes are for your company (eg if by mutual agreement employees are paid less than 50% of the maximum daily allowance rate or if employees are sent to countries with updated daily allowance rates) and how to implement them. Depending on the situation it might be enough to adapt your system of payment for business trips. However, it is also possible that you might need to update employment agreements and other documents.
New Commercial secrets law does not introduce significant changes
In comparison to earlier regulation of commercial secrets protection, the new Commercial secrets law specifies the peculiarities of commercial secrets protection, although it does not introduce any significant changes.
Changes are mostly relevant in rights protection situations, when confidentiality-related obligations have already been breached.
- Shorter limitation period – this is the most significant change for business. Instead of an overall limit of 10 years, from now on a shortened limitation of 3 years will apply to commercial secrets protection claims. This means that a claim for commercial secrets protection (eg illegal use) can only be made within 3 years after finding out about a violation.
- Unlawfully obtaining, using and possessing commercial secrets is defined. Previously the law did not provide such a definition, so that the courts decided on a case-by-case basis. The new Commercial secrets law provides clear criteria defining acts considered as unlawfully obtaining, using and possessing commercial secrets. For example, the Commercial secrets law clearly states that obtaining, using and disclosing commercial secrets is considered unlawful when a person, upon obtaining, using or disclosing a commercial secret, knew or ‒ based on circumstances ‒ must have known that the commercial secret was directly or indirectly obtained from another person who used or disclosed the commercial secret unlawfully. Note: the list is not exhaustive.
- Legal remedies are set for protecting the rights of an injured party. The Commercial secrets law indicates how an injured party can protect their rights. For example, they can seek a prohibition on producing, offering, using or providing the market with products related to commercial secret infringement. They can also seek a prohibition on importing, exporting or storing products for these purposes. They can also seek destruction of products related to commercial secret infringement or elimination of the products from the market if elimination itself would not infringe commercial secrets protection.
We note that individual agreements with employees regarding confidentiality obligations remain relevant and we do not recommend giving them up because many aspects that are relevant to a specific company are not specified in the Commercial secrets law. First of all, the Commercial secrets law covers only commercial secrets whereas confidentiality agreements can protect other confidential information which is not considered commercial secrets. Additionally, the Commercial secrets law does not newly define the concept of commercial secret, so it is advisable to clearly define what is considered a company’s commercial secret. Agreements should specify what acts are considered as breaching an agreement to protect confidential information (eg taking information outside of the company regardless of whether it was revealed or not).
The novelties brought by the Commercial secrets law should not require changes to current internal documentation or adoption of new documents. However, we recommend that you familiarize yourself with the law and evaluate its impact on your business and that you evaluate the need to make changes to internal company documentation or procedures.
The Sorainen employment team is ready to help implement employment law-related changes – contact us to discuss the relevant issues. |
