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THE REFORM OF THE REMUNERATION SYSTEM IN LITHUANIAN CIVIL SERVICE REASONS AND OBJECTIVES
Osvaldas armavi ius Director of the Civil Service Department under the Ministry of Interior of the Republic of Lithuania
Workshop on Remuneration Systems for Civil Servants and Salary Reform
Vilnius, 14 December 2006
CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR
Legal regulation of the remuneration system 1990 ± 2000 (1)
1991 ± Government Resolution of the Republic of Lithuania µOn the Provisional Pilot Procedures of Remuneration for Work of Senior officials of the State, State management and law enforcement institutions as well as other officials¶. 1995 ± Law on the Officials of the Republic of Lithuania:
Remuneration of officials shall consist of the official salary and other payments established by law. Salaries of officials shall be fixed by the law which regulates the remuneration of employees of all offices and organisations financed out of the state and municipal budgets and the attribution of offices to appropriate categories.
1996 ± Republic of Lithuania Law on the Work Salary Bases of Republic of
Lithuania State and Government Heads, Seimas Members, State and Municipal Institution and Organisation Workers:
Salary ± pecuniary evaluation of work ± service salary (monthly salary), bonuses, allowances, benefits.
2) a seniority bonus. . The positions are divided into 30 job categories. 2) bonuses. The amount of the basic salary shall be determined in accordance with the coefficient of the basic salary.CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Legal regulation of the remuneration system 1990 ± 2000 (2) 1999 ± Law on Civil Service: Remuneration of a civil servant shall be comprised of: 1) the basic salary. additional pay. 2000 ± The Law Amending the Law on Civil Service : Remuneration of a civil servant shall be comprised of: 1) basic salary or hourly (daily) pay. The basic salary coefficient as expressed in LTL and cents shall be equal to the amount of the minimum monthly salary (MMS) approved by the Government of the Republic of Lithuania (from June 1998 ± 430 Lt). an additional pay.
CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 2002 FEATURES OF THE REMUNERATION REFORM REMUNERATIO N ONSISTS BASI SALARY (depending on the position level and grade) BONUS (Seniority. . degree. for additional tasks) The amount of the basic salary depends on the job category and is influenced by the MMS. rank) ADDI IONAL PAY ( ork during holidays and days off. Jobs are divided into 20 job categories. night shifts. Qualification class or category. detrimental or dangerous.
937. Republic of Lithuania Government Resolutions µOn the Increase of Minimum Pay¶ (18 July 2003. Law on Civil Service (2002 with later amendments). 53 µOn the Approval of Civil servants¶ salary Calculation rules¶ (revoked ± rules were applied from January 23 2003 to the Ruling of the Constitutional Court on December 18 2004). March 24. National Court administration.No. 316. Ministries. the Office of the President. the institutions accountable to the Parliament.CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR LEGAL REGULATION OF THE REMUNERATION SYSTEM FOR CIVIL SERVANTS 2002-2006 2002- 2006 Remuneration of civil servants is regulated by: 1. 4. 3. office of the Parliament. 298 (applied at the moment)). 7. courts. . Republic of Lithuania Constitutional Court Ruling of 13 December 2004 µOn the Compliance of some legal acts regulating the relations of the civil service and the ones related to the Constitution of the Republic of Lithuania¶. Republic of Lithuania Government Resolution of 3 March 2003 No. 6. 2. 280 µOn the Approval of the calculation methodology of the salary fund of civil servants and employees. March 27 2006 No. public institutions and institutions under the ministries¶. 2004 No. which are paid from the budget of the Republic of Lithuania. municipal budgets and other state funds¶. Office of the Government. 684 . prosecutor¶s offices and municipal institutions¶. Republic of Lithuania Government Resolution of May 20 2002 No. IX-992 µOn the Approval of the Unified Job Descriptions of the Civil servants with political appointment of the Parliament. Republic of Lithuania Government Resolution of January 17 2003 No. April 4 2005 No. the Institutions accountable to the President. Republic of Lithuania Parliament Resolutions June 27 2002 No. 361.¶On the Approval of the Unified Job Descriptions of the Civil servants with political appointment of the Prime Minister. 5.
10% Statutiniai valstyb s tarnautojai. 28% staig vadovai.CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Number of staff in public administration institutions Teism teis jai. 1% Politinio (asmeninio) pasitik jimo. 1% Valstyb s pareig nai. 30% State politicians 1700 State officials 1000 Judges 730 Heads of institutions 500 Political appointees 500 Career civil servants 23000 Statutory civil servants 25000 Professional military personnel 7800 Contract employees 23000 . 2% Valstyb s politikai. 1% Karjeros valstyb s tarnautojai. 28% Profesin s karo tarnybos kariai. 1% Darbuotojai pagal darbo sutart .
CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 PAY FOR WORK .2004 Seniority bonus 5% Class bonus 5% Additional payments 1% Basic salary 89% .
The link of contract employees to the pay ± up to 2003 the pay of contract employees and civil servants was established under the same rate and the MMS depended on it.CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Advantages of the current remuneration system The concept of remuneration for work is quite clear and flexible. Unified job classification when one common job is provided for several possible categories according to the level of education and the institution group. Responsibility of management for the proper functioning of the system. . The role of civil servants¶ assessment commissions is clearly established. The role of the Civil Service Department as an observer is established.
. According to the Republic of Lithuania Constitutional Court Ruling of 13 December 2004 µOn the compliance of some legal acts regulating the relations of the civil service and the ones related to the Constitution and the laws of the Republic of Lithuania¶ the application of the index coefficient was recognised to be in violation to the Constitution of the Republic of Lithuania and was revoked from January 18 2004. 2003) No. The application of the index coefficient was regulated by the Republic of Lithuania Government Ruling (January 17.CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Reaction of the system to challenges (1) From January 22 2003 to December 18 2004 the pay of the civil servants was calculated on the basis of index coefficient. 53 µOn the Rules of calculation the Pay of Civil servants¶.
. 937 µOn the Increase of the Minimum Pay¶ the MMS to contract employees was increased and that of civil servants was not changed. Civil Servants¶ trade union encourages the civil servants to address courts with the demand to recognise the part of the salary. The Amendments to the Law on Civil Service of July 16 2006 linked the basic salary coefficient to the basic salary base value and changed the previous MMS. Under the Republic of Lithuania Government Resolution July 18 2003 No.CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Reaction of the system to challenges (2) Till September 1 2003 the pay of the civil servants and contract employees was established under the same rate and the MMS depended on it. which was not paid from 2003 due to the applied MMS amount. On July 13 2006 the Parliamentary group addressed the Constitutional Court on the amount of MMS which was applied to calculate the pay of civil servants.
4000 3500 3000 2500 2000 1500 1000 500 0 3 35 3 33 3 7 57 8 3 7 1996 Gyve t 1999 s ai i s t st 2002 i t s ai i s t st 2006 Be a i s ai i s t st .CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Changes on the Lithuanian Labour Market number.
684 patvirtint s ra .CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Change of factors determining the pay (1) staig kurios kreip si d l LR Vyriausyb s 2002 m. 2006 m. 2004 m. gegu s 20 d. 2003 m. 2005 m. kurios buvo trauktos LRV 2002-05-20 nutarimu Nr. 10 10 5 15 15 15 24 staig kreipim si skai ius staig skai ius. nutarimo No. 6 4 pakeitimo skai ius 30 25 20 15 12 10 5 3 0 2002 m. arba perkeltos auk tesn io s ra o grup staig .
12.01 .CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Change of factors determining the pay (2) (2) Valstyb s tarnautoj pasiskirstymas pagal einam pareig kategorijas 2004-2006 metais 2004skai iu Valstyb s tarnautoj 3500 3000 2500 2000 1500 1000 500 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Pareigyb s kategorija Valstyb s tarnautoj skai ius 2004.31 Valstyb s tarnautoj skai ius 2006.31 Valstyb s tarnautoj skai ius 2005.10.12.
1 4.3 5. 29 2003 2004 2005 2006 ) (I III K III K II K I .7 1.CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Change of factors determining the pay ( ) Valstyb s tarnautoj turin i kvalifikacines klases procentas nuo bendro valstyb s tarnautoj skai iaus 42 % 2% 2 22 9 % % % 45 40 35 30 25 20 15 10 5 0 2.5 25.9 21.9 10.7 7. 1. 17.
(I-III ketv.) Years 511.6 30.9 12. Lt 600 500 400 300 200 100 0 2004 m. 2006 m.8 Pareigin alga Priedas u sta Priedas u klas Priemokos .8 31.CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Change in pay structure Amount mln.4 45.9 466 8.7 34.
quarte rs Privataus sektoriaus tarnautoj bruto darbo u mokestis Valstyb s tarnautoj darbo u mokestis Valstyb s tarnautoj pareigin alga III IV I II 200 III IV I II 2006 III .CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Comparison of Average monthly salary Average monthly salary in L 000 2 00 2000 00 000 00 0 I II 200 III IV I II 200 Ye ars.
Performance assessment of the civil servant is not directly related to the job goals. Lack of clear guidelines and recommendations for civil service assessment commissions. performance results and pay. The concept of the performance assessment of the civil servant does not provide for the reflection on pay in case of poor performance. From September 1 2003 different MMS levels were established to calculate the pay for civil servants and contract employees. .CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Drawbacks of the current remuneration system Job assessment criteria are abstract and insufficient to establish the category precisely.
because of the progressive pay increase³. . 200 ÄIt is strongly recommended to implement more objectivity and transparency into the pay system.CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Assessment of the administration system in the civil service of Lithuania SIGMA ± Support for Improvement in Governance and management (Sigma is a joint initiative of the OECD and the European Union. principally financed by the EU) 2002 ÄThe remuneration system is established in the Law but the variable part of the pay is still too big and too much in terms of scope left for the discretion of the management. The pay rise possibilities should be seriously considered³. FROM THE LITHUNIA¶S PRE-ACCESSION MONITORING REPORT (published by the EU. the management still exercises too many rights in explaining the pay criteria and establishing the gradual pay to civil servants ³. When drafting secondary legislation such a problem should be addressed and the transparency of the remuneration system control should be ensured. however. November 2003) ÄThe remuneration system has also improved.
however. the pay should go up every 3 years by applying a higher pay scale.CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Assessment of Administrative System Recommendations of the World Bank on the Remuneration Reform of the Lithuanian Civil Service which will be the basis for the implementation of performance management February 2004 The main problem of the current system are bonuses for qualification classes One may conclude that these bonuses were established as a preaccession tool for Lithuania to retain highly-skilled professionals. Bonus for seniority and qualification class should be abolished. 2004 World Bank expert recommendation with the aim to improve the remuneration system is to link the civil servants¶ pay to the performance assessment results: To establish a joint µpay for work pillar¶ by establishing a 15 level pay sale and provide for a 3% increase in each scale. Such bonuses could be a transitional tool measure which should be abolished since the pay and category establishment criteria are strengthening. .
the service is usually taken up by older people. The number of cancelled competitions is increasing. .CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Is the remuneration system motivating today? today? The number of new entrants in the civil service is reducing. The interest of young people in civil service is reducing. since there are no people who want to become civil servants. The number of people who decide to leave the service on their own will is increasing. The number of applicants in civil service is reducing.
CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 CONCLUSIONS (1) I 2002 f f ¶ y h w c yc h h h c h d c d f h ± y 9 c 90 L d h Th 0 0L c fc y f h y22 c Th c f h d h h h y f f d y d h c d y c d h h d f h y y f d Th ch y h yw c d f d y h c c y .
CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 CONCLUSIONS (2) S c c c c O d d h d c c h L w C S c w c y c ff c h c y d y h G d h fc c d w h d wh c c c c d ch f h y w d y h h y d h c w y h c h ch c f c d c c d h c f f c c h y c c d h d c 6 J y 2006 h A d h y d h wh ch d h h f c d x d h c c d f h S ch h dc .
CIVIL SERVICE DEPARTMENT UNDER THE MINISTRY OF INTERIOR 2006 Proposals W h h d d Th j d y F h d x d h h c f c c h wh ch w d f c h c c c dc Th w df x y f c c c T h d h y f fc c ¶ d x 2 c y h f y d f h f L h f h y h x d c f h c f h c d f c f h d c y y f h d wh h f h f h d fc h q y f d h ch w c c c y h c c d y yw h d f .