Commission Report (2002): Latvia

• Progress since the last Regular Report
• Overall assessment
• Conclusions

Chapter 13: Social policy and employment

Progress since the last Regular Report

Since the last Regular Report further progress has been made in aligning with the acquis.

In the area of labour law, the new Labour Code transposing the majority of the labour law acquis entered into force in June 2002. In December 2001, the Law on the Protection of Employees in the Event of Insolvency of their Employer, aimed at transposing the relevant acquis, was adopted. Concerning the transposition of the acquis on the protection of young people at work, implementing legislation was approved in January and May 2002. The amendments to the Law on the Insolvency of Enterprises and Enterprises Societies have been adopted in June 2002. The Law on the State Labour Inspectorate, which entered into force in January 2002, clarifies and strengthens the legal status, tasks and functions of the State Labour Inspectorate. The Inspectorate has been designated as the liaison office under the acquis on posting of workers and as the competent public authority required under the Directives on collective redundancies. In 2002 the Inspectorate organised training sessions on the new Labour Code for trainers and judges.

The task of implementing the Law on the Protection of Employees in the Event of Insolvency of their Employer was attributed to the Insolvency Administration operational as of February 2002. The Administration will combine the functions of the guarantee institution and the supervision of insolvency process.

Concerning equal treatment for women and men, efforts have focussed on promoting implementation of the Concept of Gender Equality, which was adopted in October 2001. In March 2002, the accompanying Action Plan for the implementation of the concept in 2002 was approved. It foresees the elaboration of the National Gender Equality Strategy 2003--2007. With the decision in February 2002 to establish the Gender Equality Council, a co-ordination and advisory body has been created. A training programme on gender equality for civil servants was elaborated in early 2002 and courses at the Latvian School of Administration have started. In 2002, the second court case concerning gender discrimination in Latvia ended in favour of the claimant (see also B.1. -- Political criteria).

With regard to health and safety, the Law on Labour Protection, which aims at transposing the framework Directive on health and safety at work, came into force in January 2002. Implementing legislation transposing Directives on labour protection when working with carcinogenic substances at work and labour protection requirements at workplaces have also been adopted since the last Regular Report. In December 2001, in accordance with the EC principles of occupational health and safety, the new State Labour Inspectorate Law was adopted. To strengthen the administrative capacity of the State Labour Inspectorate, an active training policy has been pursued. The new training programme for occupational safety and health experts was accepted in March 2002. The professional standards for occupational safety and health experts and senior experts have been elaborated.

The tripartite structure still continued to dominate the social dialogue. The acceptance and understanding of the importance of bipartite social dialogue remain weak. The number of collective agreements, covering a small percentage of the labour force, has not significantly risen since the last Regular Report. In 2001, 2 287 collective agreements were concluded, compared to 2 057 in 2000. The collective agreements concluded in 2001 cover 203 374 employees (203 725 in 2000). 2 167 of the collective agreements were concluded at company level, while the number of collective agreements at branch level (17) was lower than in previous years.

Efforts to strengthen the public health system have focused on implementation of the Public Health Strategy adopted in 2001. In the context of this strategy, in January 2002, it was decided to re-organise the National Environmental Health Centre and its regional branches into a Public Health Agency. The new institution is responsible for implementation of the State`s public health policy and for epidemiological safety. In the domain of communicable disease surveillance, control legislation was adopted to align with the acquis.

An organised system of epidemiological surveillance and control of infectious diseases with clearly defined competence and responsibility of the institutions involved has been developed. A computer network for epidemiological surveillance of infectious diseases is being developed.

The Annual Social Report 2001 published by the Ministry of Welfare points out that 3.5% of GDP was allocated to the health sector. This marks a further decrease, both in absolute terms and in relation to GDP, since the previous year (5.5% in 2000). Latvia is now even further from the minimum level of 7% in the EU countries.

As regards employment policy, Latvia and the European Commission have launched an employment policy review in the form of a Joint Assessment of Employment Priorities in Latvia (JAP), with a view to examining the progress made by Latvia in adapting its employment system so as to be able to implement the European Employment Strategy. This document, still to be finalised, will lay down the key priorities and tasks for the pre-accession period. Achievement of a consensus on such priorities and tasks is proving difficult to reach.

The unemployment rate has decreased, to 13.1 % in 2001 compared to 14.2% in 2000. Unemployment rates for both men and women are decreasing and reached 14.6% for men and 11.5% for women. The high and increasing long-term unemployment at 59% is of great concern. Efforts have been made to increase the number of persons covered by active labour market measures. In 2001, 25% of registered unemployed persons were involved in active labour market measures (training, courses, and temporary public works). Given that such measures are only available to registered unemployed persons, care should be taken to ensure that registration becomes as widespread as possible, if necessary by identifying and removing any possible obstacles. The modernisation of the Public Employment Services and enhancement to the IT services should continue with a view to further progress in that regard.

In 2001, the administrative capacity of the State Employment Service was upgraded with the supply of computer hardware to the Board of the Service and its regional offices.

The Government decided in February 2002 on the designation of the main institutions to be involved in Structural Funds management. The Ministry of Finance is designated as the Managing Authority of the Structural Funds, including the European Social Fund (ESF). The State Treasury, a separate legal entity within the Ministry of Finance, is appointed as Paying Authority. The Ministry of Welfare will be the partner institution to the Managing Authority for the ESF. The intermediate body/ies will be nominated later.

As a follow-up to the Gothenburg European Council, where the EU invited the candidate countries to translate the EU objectives into their national policies, the Commission and Latvia have initiated a joint co-operation exercise to prepare for future participation in the EU social inclusion process after accession. This exercise consists in joint identification of the social exclusion challenges and relevant policy responses. In this context, the Central Statistical Bureau of Latvia co-operates with Eurostat to produce data on poverty and social exclusion. Preliminary figures suggest that overall income disparities seem to be rather high, as is the poverty rate after social transfers (16.8%).

As regards other areas of social protection, since the last Regular Report implementation of the pension reform has remained the focus of Latvian efforts in this field. In December 2001, Parliament amended the Law on State Pensions. The amendments set the minimum pension that is linked to a person`s working record and prescribe a new formula for the indexation of low pensions. In March 2002 the Government accepted the Concept on the Development of Providing Social Assistance Services. The Concept envisages changes in the financing system of social assistance that would facilitate the development of alternative social care services by municipalities. The financing principle ``money follows the client'' is implemented in social institutions belonging to municipalities.

The new Labour Law in force since June 2002 contains provisions banning discrimination in employment on the grounds covered by Article 13 of the EC Treaty, with the exception of sexual orientation. Since the last Regular Report no further legislative progress concerning the implementation of the two directives on anti-discrimination has been made.

An inter-institutional working group with the task of evaluating alignment with the Directives was established in February 2002 (see also Section B.1.2. -- Human rights and the protection of minorities).

Overall assessment

In the area of labour law, alignment is well advanced but some efforts are still required. In particular, Latvia has to transpose Directives related to the involvement of workers in the European Company and regarding information and consultation of workers. Also amendments to the Labour Dispute Law still have to be adopted.

Effective implementation and enforcement of the acquis should be a priority and the State Labour Inspectorate needs to be strengthened. An independent guarantee fund for employees in the case of employer's insolvency has to be established. The legal status of the Insolvency Administration needs confirmation.

The enforcement of the acquis in the field of equal treatment for women and men should be improved. The Action Programme for the implementation of the Concept Paper on Gender Equality remains to be adopted and implemented.

Alignment with the acquis on health and safety at work is well advanced, but still has to be completed, and the necessary implementing legislation must be adopted. The State Labour Inspectorate should be reinforced.

The reform of the public health sector should continue. The health status of the population is still much lower than the EU average, and progress is needed to improve it. The incidence of some communicable diseases gives rise to concern. Public expenditure on health care should be considerably increased. The transposition of the current tobacco legislation has not been completed yet and no specific time schedule has been made in this respect. The Action Plan to ensure the implementation of the Public Health Strategy is still pending. New legislation, in particular rules on communicable diseases notification, surveillance and reporting forms is required. The list of notifiable diseases should be revised to include all diseases listed in the EC Decisions, and should include EC case definitions. In addition, training in modern epidemiology is needed, specifically on analytical methods, field investigation, data protection and management. Participation of Latvia in EC disease-specific networks needs to be accelerated. Moreover, laboratory equipment, procedures and protocols need to be upgraded at national and regional level. In particular, a national reference virological laboratory should be established. Generally, effective implementation of the acquis needs to be ensured.

The bipartite social dialogue is lagging behind. Sectoral and enterprise level social dialogue should be more effectively promoted and its coverage extended, both in terms of enterprises and percentage of the labour force covered by collective agreements. The adoption of the Labour Dispute Law would represent a major step in the promotion of this dialogue. In addition, Latvia should enhance activities to develop and systematise the information available to social partners and increase training of all parties involved.

Regarding employment policy, the Joint Assessment of the Employment Policy Priorities of Latvia (JAP) will represent an important step in preparation for future participation in the European Employment Strategy upon accession. It is important to ensure effective monitoring of the phasing-in of the priorities and commitments agreed in the JAP. There is a need to focus on more active and preventive strategy and to develop and examine the benefit systems to enhance the incentives for unemployed and inactive people to take up jobs.

Concerning the European Social Fund (ESF), implementing legislation on the administration of the Fund remains to be adopted. The Ministry of Welfare needs to further strengthen its administrative capacity for programming, implementation and monitoring. Reinforced administrative capacities also need to be built up in the intermediate bodies of the ESF at the national and regional levels to guarantee proper implementation of the funds at the project level. Division of competencies among institutions of ESF management and development of a co-ordination model should be established.

A national integrated strategy on promoting social inclusion, taking into account the EU objectives, needs to be developed. As poverty and social exclusion are multidimensional by nature, it is important to promote an integrated approach mobilising various governmental bodies and all relevant stakeholders in the process. It is also crucial to improve and develop social statistics systems on poverty and social exclusion in line with the EU commonly agreed indicators on social inclusion.

As regards other areas of social protection, implementation of the social assistance reform should continue. Introduction of the guaranteed minimum income level system is pending, requiring adoption of the necessary legislation, establishment of social assistance offices at municipality level and availability of the necessary funds.

Further efforts are needed to ensure alignment and enforcement of the acquis on anti-discrimination. Legislation transposing the Directives based on Article 13 of the EC Treaty has to be introduced and implemented. The Equality Body foreseen in the acquis needs to be established.

Conclusions

In its 1997 Opinion, the Commission concluded that social reforms should be pursued, and the public health system needed to be significantly improved. In addition, the social dialogue needed to be further developed. Latvia would need to make substantive efforts to ensure the realignment of its legislation with EC requirements in areas such as health and safety, labour law and equal opportunities and to continue to develop the structures needed to ensure effective implementation of legislation. Provided Latvia pursued its efforts, it should be possible to take on the obligations of EU membership in the medium term.

Since the Opinion, Latvia has made good overall progress in aligning with the acquis, especially over the last two years and in particular in the areas of labour law and equal treatment for women and men. Efforts have been made as well to strengthen the administrative capacity of social institutions.

Negotiations on this chapter have been provisionally closed. Latvia has been granted transitional arrangements in respect of the following Directives: Directive on work equipment -- until 1 July 2004; Directive on workplace -- until 31 December 2004; Directive on display screen equipment -- until 31 December 2004. Latvia is generally meeting the commitments it has made in the accession negotiations in this field.

In order to complete preparations for membership, Latvia`s efforts should now focus on: completing transposition (anti-discrimination, health and safety, labour law and tobacco); effective implementation and enforcement (labour law, equal treatment, health and safety, public health, and anti-discrimination); developing the bipartite social dialogue; and reinforcing the administrative capacities of the State Labour Inspectorate and of the bodies related to the European Structural Funds.

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