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We are pleased to have assisted in peacefully resolving a legal dispute concerning the practice of applying fixed-term employment contracts. The defendant, one of the largest healthcare institutions in Lithuania, had a practice where individuals occupying managerial positions through a competitive process for a fixed term continued to work in these positions beyond the maximum five-year term stipulated by the Labor Code, extending their contracts indefinitely “until the next competition.” This allowed individuals to remain in these positions for longer than five years under a fixed-term employment contract, despite the Labor Code and other regulations governing healthcare institutions prohibiting employment contracts longer than five years or, if the fixed-term contract extends beyond this period, considering it as indefinite.
This flawed practice of applying fixed-term employment contracts undermined the Labor Code’s regulations designed to limit the use of fixed-term contracts and apply them only in exceptional cases. Fortunately, the parties in this case ultimately found a mutually acceptable way to resolve the dispute and concluded the case with a settlement agreement.
