Vilnius drops plan to replace municipal company boards before new labour law takes effect

Vilnius city administration director Adomas Bužinskas announced on Friday that the city is calling off its plan to dismiss and replace the boards of several municipal companies ahead of schedule. The original plan involved dismissing the boards of ID Vilnius, Vilnius Development Company, Miesto Gijos, Grinda and Vilnius Public Transport on October 29 and appointing new members before amendments to Lithuania's Labour Code took effect on November 1.

The amendments require state- and municipality-owned companies to include employee representatives on their boards. Bužinskas had previously admitted that the October 29 date was deliberately chosen so new boards could be selected before the law came into force and serve full four-year terms without employee representation.

Criticism prompted reversal

The plan drew criticism from trade unions, business groups and political opponents. Bužinskas said the city decided to abandon the plan after the matter turned into a political controversy, with the governing majority signalling it would seek to move up the law's effective date. Since new boards could no longer be elected under the law as currently in force, he said, the city decided to step back and save everyone's time.

The existing boards will now serve out their remaining terms, after which new boards will be appointed in line with the law. Bužinskas stressed that his personal opposition to how the legislation handles employee representation remains unchanged — he argued the law addresses a complex issue too superficially, without clearly defining how employees should be involved in corporate governance or who would represent them. He also warned the new system could force the city to replace some board members whose expertise is considered essential to the companies.