Work on eu projects. Is holiday pay and other benefits required?


Nowadays, European Union funding is not a rarity, on the contrary, it has already become almost a mundane. It is therefore strange that EU-funded projects still raise issues of debate, such as: the employment of a person in a particular EU project - that is, by concluding an employment contract and specifying an hourly wage for work - is treated only directly, almost literally as WORK, not in accordance with the provisions of labour law applicable in Lithuania.

Unfortunately, the current approach to EU-funded projects is as follows: if the EU funding agreement provides for an hourly rate for work, say for the project manager, to allocate funds to non-work-related benefits, such as project manager’s holiday pay and / or compensation for unused leave would be a criminal offense - a real waste of EU funds. A literal assumption is made:


To find the answer to this sensitive question, we need to delve into labour law.

When an EMPLOYMENT AGREEMENT is concluded between an employer and an employee, the provisions of the Labour Code (LC) of the Republic of Lithuania apply to it, regardless of the type of employment contract.

Articles 89-92 of Chapter VI Section 5 The Project-Based Employment Contract of the LC regulate the concept, content and other matters of a project-based employment contract.

We also submitted an inquiry to the State Labour Inspectorate (SLI) regarding work on an EU-funded project.

Is it possible not to pay holiday pay and / or compensation for unused leave when a project-based employment contract is concluded, which is financed ONLY from EU project funds?
SLI’s answer was very explicit: when concluding any type of employment contract, both holiday leave and compensation for unused leave are imperatively obligatory in accordance with the provisions of the LC.

There can be no doubt that LABOR LAW takes precedence over the literal perception of the word work.

In the attachments:

Inquiry submitted by Raimda auditas UAB to SLI on 6 February 2021.
Response to the inquiry received from SLI on 1 March 2021.