Lietuviškai
THE CONSTITUTIONAL COURT OF
THE REPUBLIC OF LITHUANIA
R U L I N G
On the compliance of sub-Item 11 of Item 19 of the
Regulations for Forming and Implementation of the
State Social Insurance Fund Budget approved by
Government of the Republic of Lithuania Resolution
No. 266 of 20 February 1995 with Article 1 of the
Republic of Lithuania Law on State Social
Insurance
Vilnius, 18 December 1997
The Constitutional Court of the Republic of Lithuania,
composed of the Justices of the Constitutional Court Egidijus
Jarašiūnas, Kęstutis Lapinskas, Zigmas Levickis, Augustinas
Normantas, Vladas Pavilonis, Jonas Prapiestis, Pranas Vytautas
Rasimavičius, Teodora Staugaitienė, and Juozas Žilys,
the secretary of the hearing - Daiva Pitrėnaitė,
pursuant to Part 1 of Article 102 of the Constitution of
the Republic of Lithuania and Part 1 of Article 1 of the Law on
the Constitutional Court of the Republic of Lithuania, on 4
December 1997 in its public hearing conducted the investigation
of Case No. 9/97 subsequent to the petition submitted to the
Court by the petitioner - the Klaipėda City District Court -
requesting to investigate if sub-Item 11 of Item 19 of the
Regulations for Forming and Implementation of the State Social
Insurance Fund Budget approved by Government of the Republic of
Lithuania Resolution No. 266 of 20 February 1995 was in
compliance with Article 1 of the Republic of Lithuania Law on
State Social Insurance.
The Constitutional Court
has established:
I
On 10 March 1977, the petitioner - the Klaipėda City
District Court - was investigating a civil case pursuant to a
complaint of the private company "The Sprut Trade House"
concerning an obligation by the Klaipėda Division of the Board
of the State Social Insurance Fund charging the aforesaid
company to remit 47,865 Lt into the account of the said board.
By its interlocutory ruling the said court suspended the
investigation of the case and appealed to the Constitutional
Court with a petition requesting to investigate whether Item
19.4 of the Regulations for Forming and Implementation of the
State Social Insurance Fund Budget approved by Government of
the Republic of Lithuania Resolution No. 266 of 20 February
1995 (Official Gazette "Valstybės Žinios, No. 17-397, 1995), as
well as Construction No. 06-223 of 21 April 1994 by the Board
of the State Social Insurance Fund, was in compliance with
Article 1 of the Republic of Lithuania Law on State Social
Insurance.
The Constitutional Court, taking account of the content of
the disputed norm, specifies that the petitioner - the Klaipėda
City District Court - actually requests to decide the
compliance of sub-Item 11 of Item 19 of the Regulations for
Forming and Implementation of the State Social Insurance Fund
Budget, but not that of Item 19.4 of the said regulations, with
Article 1 of the Law on State Social Insurance.
II
In its interlocutory ruling the petitioner pointed out
that on 2 October 1996 the Klaipėda Division of the Board of
the State Social Insurance Fund checked how the private company
"The Sprut Trade House" had paid state social insurance
payments from 1 September 1994 to 1 July 1996, and drew up a
statement whereby the aforementioned company was obligated to
remit 15,955 Lt of additionally calculated state social
insurance payments, as well as a fine comprising 31,970 Lt,
which totalled 47,865 Lt, because of J. Orlov and A. Kobčenka,
i.e. persons working in the said company.
When the case was being investigated in the regional
district court, it was explained that the employees of the
Klaipėda Division of the Board of the State Social Insurance
Fund, when drawing up the statement, wrongfully applied Article
18 of the Law on the Legal Status of Foreigners in the Republic
of Lithuania whereby foreigners permanently residing in the
Republic of Lithuania shall enjoy the same rights to social
security as citizens of the Republic of Lithuania, as well as
Article 1 of the Law on State Social Insurance wherein it is
established that measures of state social insurance are to be
applied to insured residents of the Republic. J. Orlov, who
worked at the private company "The Sprut Trade House", is a
citizen of the Ukraine and permanently resides there, while A.
Kobčenka is a citizen of Russian Federation and permanently
resides there.
In its interlocutory ruling the petitioner also indicated
that while following Construction No. 06-223 of 21 April 1994
by the Board of the State Social Insurance Fund, as well as
sub-Item 11 of Item 19 of the Regulations for Forming and
Implementation of the State Social Insurance Fund Budget, state
social insurance payments shall be calculated under common
procedure from remuneration for work paid to residents of
foreign countries who work at enterprises which are on the
territory of the Republic of Lithuania. The petitioner doubted
if these norms were in compliance with Article 1 of the
Republic of Lithuania Law on State Social Insurance.
III
In the course of preparation of the case for the
Constitutional Court hearing, an explanation of V. Kunca,
Director of the Board of the State Social Insurance Fund, was
received. Therein it is pointed out that under Article 1 of the
Law on State Social Insurance, the notion "insured residents of
the Republic" is applied to all persons who work at enterprises
of Lithuania irrespective of these conditions: whether they
reside in Lithuania permanently or temporarily, and whether
they are citizens of the Republic of Lithuania or not. Neither
the aforesaid law, nor sub-Item 11 of Item 19 of the
Regulations for Forming and Implementation of the State Social
Insurance Fund Budget, contains the notion "permanently
residing".
Article 4 of the Law on State Social Insurance enumerates
persons for whom state social insurance is obligatory. Among
such persons the said article mentions persons working under
employment contract. Obligatory state social insurance payments
are not calculated from foreigners who work in Lithuania
providing an agreement is made with the Board of the State
Social Insurance Fund on social insurance for the foreigner
working temporarily in Lithuania. The agreement is made within
2-3 days since the day when all required documents are filed.
Providing a foreigner working at a Lithuanian enterprise does
not make the said agreement or avoids making it, the state
social insurance payments are calculated under common
procedure.
The explanation points out that the Board of the State
Social Insurance Fund may refuse to make an agreement in the
case that the international agreements provide otherwise, or
not all documents provided for under the provisional procedure
for making social insurance agreements with citizens of foreign
countries who work in Lithuania as approved by Decree No. 375
of 7 July 1997 of the Board of the State Social Insurance Fund
have been filed.
Foreigners working at Lithuanian enterprises are not
required to make the aforesaid agreement only in such a case
when there exist international agreements which have been
signed and gone into effect and which regulate social insurance
issues in a different way. The fact that a person does not
reside permanently in Lithuania may not serve as the grounds
for not paying compulsory state social insurance payments or
not making the agreement with the said board as the payment of
these payments is linked with the work and remuneration for it
but never with a residential place.
The explanation also indicates that on approving the new
wording Regulations for Forming and Implementation of the State
Social Insurance Fund Budget approved by Government Resolution
No. 266 of 20 February 1995, Construction No. 06-223 by the
Board of the State Social Insurance Fund became null and void.
Constructions have been prepared for the application of certain
items of the aforesaid regulations. Sub-Item 11 of Item 19 has
not been construed as its content regarding the implementation
is clear.
The Constitutional Court
holds that:
1.1. Article 52 of the Constitution stipulates: "The State
shall guarantee the right of citizens to old age and disability
pension, as well as to social assistance in the event of
unemployment, sickness, widowhood, loss of breadwinner, and
other cases provided by law." Thus the Constitution
consolidates the obligation of the state to take care of its
citizens who due to the reasons provided for by the law are
incapable to subsist on work or other income or are
insufficiently provided with.
International legal acts also protect the right to
pensionary maintenance and social support. Article 9 of the
1966 International Covenant on Economic, Social and Cultural
Rights prescribes: "The State Parties to the present Covenant
recognize the right of everyone to social security including
social insurance." This international document was ratified by
the Republic of Lithuania in 1992.
Fundamental provisions of social maintenance were also
consolidated in another international legal act - the 1961
European Social Charter - which was signed by Lithuania on 8
September 1997. Article 12 of the said charter stipulates:
"With a view to ensuring the effective exercise of the
right to social security, the Contracting Parties undertake:
[...] (4) to take steps, by the conclusion of appropriate
bilateral and multilateral agreements, or by other means, and
subject to the conditions laid down in such agreements, in
order to ensure:
(a) equal treatment with their own nationals of the
nationals of other Contracting Parties in respect of social
security rights, including the retention of benefits arising
out of social security legislation, whatever movements the
persons protected may undertake between the territories of the
Contracting Parties;
(b) the granting, maintenance and resumption of social
security rights by such means as the accumulation of insurance
or employment periods completed under the legislation of each
of the Contracting Parties."
1.2. Part 3 of Article 138 of the Constitution provides:
"International agreements which are ratified by the Seimas of
the Republic of Lithuania shall be constituent part of the
legal system of the Republic of Lithuania." It means that the
International Covenant on Economic, Social and Cultural Rights
has the force of law in the Republic of Lithuania. The
Constitutional Court formulated the fundamental principles of
co-ordination of Lithuanian law with international law in its
Conclusion "On the compliance of Articles 4, 5, 9, 14 as well
as Article 2 of Protocol No. 4 of the European Convention for
the Protection of Human Rights and Fundamental Freedoms with
the Constitution of the Republic of Lithuania". The Court held
that in Lithuania the system of parallel adjustment of
international and domestic law is applied which is based on the
rule that international treaties are transformed in the legal
system of a state (i. e. they are incorporated into it).
Implementing the norms of constitutional and international
law, the state established the right to get social support for
not only its citizens but also other persons who legally both
reside and work in the Republic of Lithuania providing they are
being insured or have been insured by compulsory state social
insurance. Such persons, as well as citizens of the Republic of
Lithuania, are paid pensions, unemployment grants, sickness
allowances, allowances for the loss of breadwinner, as well as
compensations to cover expenditures for treatment and
prophylaxis under the procedure established by legal acts.
One should note that the right of permanently and legally
residing foreigners in Lithuania to social maintenance was
consolidated in the laws of the Republic of Lithuania adopted
as far back as 1991. For instance, Article 2 of the 21 May 1991
Law on the Principles of State Social Security System provides
that foreign citizens permanently residing in Lithuania and
stateless persons shall enjoy equal social maintenance rights,
provided that the laws of the Republic of Lithuania and
international agreements do not state otherwise. Article 18 of
the 4 September 1991 Law on the Legal Status of Foreigners in
the Republic of Lithuania contains an analogous provision:
"Foreigners permanently residing in the Republic of Lithuania
shall enjoy the same rights to social maintenance as citizens
of the Republic of Lithuania." This principle was also being
followed when later legal acts were adopted whereby particular
issues of social maintenance were regulated. For example,
Article 1 of the 18 July 1994 Law on State Social Insurance
Pensions provides that foreign citizens permanently residing in
Lithuania and stateless persons shall have the same right to
state social insurance pensions under this Law if the laws of
the Republic of Lithuania or international agreements do not
provide other conditions of pensionary maintenance for these
persons.
The provisions of the laws of the Republic of Lithuania on
social maintenance for foreigners are in line with the
regulations established in the bilateral agreements. For
instance, Article 13 of the 28 March 1995 Agreement between the
Government of the Republic of Lithuania and the Government of
the Ukraine on Mutual Employment of Citizens provides that the
employees must be insured by social insurance under the laws of
the state giving a job provided the international agreements,
to which the contracting parties are attached, do not state
otherwise. Article 15 of the aforesaid agreement indicates that
in the event of injury, vocational disease or any other harm to
one's health due to the fault of the employer and which are
linked with accomplishment of work duties of the employee,
privileges shall be given to the employees and they be paid
compensations which are provided for by the laws for the
citizens of the state giving a job provided the international
agreements, to which the contracting parties are attached, do
not state otherwise. In the event of acute illness or accident
on the territory of the state giving a job medical help shall
be rendered to the employees under the same conditions as for
the citizens of that state.
The Government of the Republic of Lithuania has made
similar covenants and agreements with other states, too, for
instance, Estonia, Latvia, Belorus, Poland.
1.3. Along with the foreigners who legally reside
permanently in the Republic of Lithuania and legally work at
the enterprises, offices and organisations (hereinafter in the
ruling referred to as enterprises) on its territory and who are
insured under state social insurance and on these grounds
receive state social support, there are foreigners, too, who
have come to Lithuania for a temporary job. These persons who
permanently reside abroad may work in Lithuanian enterprises
for the time period provided for in the contract and must have
a special permit for such work. When taking a job, they must
observe the legal acts of the Republic of Lithuania and the
procedure established by interstate agreements. Otherwise the
work performed by these persons is considered illegal.
Social insurance for residents of foreign countries who
without violating the established procedure get a temporary job
in Lithuanian enterprises has certain peculiarities. Internal
legal acts of the Republic of Lithuania take into consideration
the fact that these persons, as a rule, have been insured in
their respective states. Therefore sub-Item 11 of Item 19 of
the Regulations for Forming and Implementation of the State
Social Insurance Fund Budget approved by Government Resolution
No. 266 of 20 February 1995 provides that the payments of
compulsory state social insurance shall not be calculated from
remuneration for work paid to residents of foreign countries
who work in Lithuanian enterprises but retain social
maintenance of their respective countries and who have made
corresponding agreements with the Board of the State Social
Insurance Fund.
In the case that a foreigner who legally and temporarily
works in Lithuania is not socially maintained in the state
where he permanently resides he must be insured under
compulsory social insurance in Lithuania provided that the laws
of the Republic of Lithuania and international agreements do
not state otherwise.
2.1. Article 1 of the Law on State Social Insurance
provides that the measures of state social insurance shall be
applied to insured residents of Lithuania. The petitioner
doubts whether sub-Item 11 of Item 19 of the Regulations for
Forming and Implementation of the State Social Insurance Fund
Budget is in compliance with this norm. Under the said sub-item
state social insurance payments shall be calculated from
remuneration for work paid to residents of foreign countries
who work in the enterprises which are on the territory of
Lithuania under common procedure provided particular agreements
made with the Board of State Social Insurance do not state
otherwise. Thus the petitioner doubts whether foreigners
working at Lithuanian enterprises must be insured under
compulsory social insurance in Lithuania.
Article 1 of the Law on State Social Insurance provides
that state social insurance shall be the system of social
economic means established by the state, which shall provide
insured residents of Lithuania, as well as their family members
in cases established by the law, with finances and services
necessary for living if, for reasons established by the law,
they are unable to subsist on their earned income or other
income, or for valid reasons established by the law, they have
additional expenditures.
The means and services of state social insurance are
rendered to insured residents of Lithuania (as well as, in the
cases provided for by the law, to their family members). Under
Article 4 of the said law, state social insurance shall be
obligatory for:
(1) persons working under employment contract, as well as
those working on the basis of membership in elected
institutions, economic partnerships, agricultural enterprises
or co-operative organisations, and who receive remuneration for
their work;
(2) owners of private enterprises and self-employed
persons who are placed on the same footing as the former under
procedure established by the Government;
(3) farmers and their family members of age working on the
farm.
Thus compulsory payment of state social insurance payments
is either linked with work under contract and remuneration for
it, or with the income which is received by the owners of
private enterprises, persons placed on the same footing as the
latter, as well as farmers and their family members of age
working on the farm.
2.2. Employment contracts must also be made with
foreigners who do not have the permit for permanent living in
Lithuania but who wish to get a job in this country. Part 3 of
Article 4 of the Law on Employment Contract provides that
citizens of foreign states and stateless persons who have come
to Lithuania under established procedure for temporary living
to get a job shall be entitled to be employed under this law,
as well as other laws. The procedure of their employment is
determined by international agreements and the Government of
the Republic of Lithuania. Thus for residents of foreign
countries who legally and temporarily reside and work in
Lithuania state social insurance may also be compulsory
provided this has been established in the legal acts of the
Republic of Lithuania, and interstate and intergovernmental
agreements do not state otherwise.
2.3. Article 2 of the Law on State Social Insurance
provides that state social insurance shall be regulated by this
and other Republic of Lithuania social maintenance laws, as
well as the Law on State Social Insurance Pensions, as well as
the acts approved by the Government: the Rules for Allocation
and Payment of State Social Insurance Pensions, the Rules for
State Social Insurance Allowances, the Rules of State Social
Insurance Offices, the Regulations for Voluntary State Social
Pension Insurance, and the Regulations for Forming and
Implementation of the State Social Insurance Budget.
The Government in the Regulations for Forming and
Implementation of the State Social Insurance Fund Budget
approved by its Resolution No. 266 of 20 February 1995
determined the procedure for forming, approval, implementation,
account and accountability of the aforesaid budget, as well as
the situations when insurance payers are entitled not to pay
social insurance payments. Sub-Item 11 of Item 19 of the
Regulations provides that compulsory state social insurance
payments shall not be calculated from remuneration for work
paid to residents of foreign countries working at Lithuanian
enterprises and who retain social maintenance in their
respective countries and who have made corresponding agreements
with the Board of the State Social Insurance Fund.
Under the requirements established in the Republic of
Lithuania, the social insurance question of a foreigner
temporarily working in Lithuania shall be decided when the
following documents are filed:
(1) a request of the enterprise to exempt it from social
insurance payments for the said person;
(2) copies of the employment contract or licence, or
copies of the documents whereby the foreigner has been
appointed to hold a respective position (for example, a copy of
the minutes of the shareholders' meeting, etc.);
(3) a certificate-confirmation from social insurance
offices of the foreign country which confirms that the
foreigner is being insured at the office which operates at his
permanent residential place and that the said person has paid
the necessary social insurance payments (the time period until
when these payments have been paid must be indicated therein);
(4) a copy of the register certificate of the
enterprise-insurance payer at subdivisions of the Board of the
State Social Insurance Fund.
Provided the foreigner cannot for certain reasons present
a certificate from the social insurance office of the foreign
country but he possesses other documents (for instance, the
insurance card) which, in his opinion, prove that he is still
socially maintained in his country he may also present a
confirmation from the diplomatic representatives (consulate,
embassy) of his country that the aforesaid documents really
prove his social maintenance in his country. The certificate
from the social insurance office or the confirmation from the
diplomatic representatives must be legalised or drawn up and
confirmed by the competent office of one of the contracting
parties (in the case that the agreements on the legal
assistance between the Republic of Lithuania and the said
foreign country are in force).
In the event when a foreigner has been employed legally,
and he has been socially insured in his respective country, and
the agreement has been made with the Board the State Social
Insurance Fund, the enterprise is exempted from the duty to pay
social insurance payments. Such a foreigner is not held as an
insured person under Article 1 of the Law on State Social
Insurance. In addition, double payment of social insurance
taxes is evaded by such legal regulation of social insurance.
In the case that a foreigner is not socially maintained in
his country or he does not present the proofs required in
Lithuania, he is insured under common procedure in the same way
as all other residents of Lithuania who work at enterprises of
this country are insured (provided an international agreement
of the Republic of Lithuania does not state otherwise). This is
in line with Item 1 of Part 2 of Article 4 of the Law on State
Social Insurance establishing that obligatory state social
insurance is, as a rule, applied to persons working under
employment contract, as well as this is in conformity to
international obligations of the Republic of Lithuania to
recognise anyone's right to social maintenance and social
insurance. If one did not observe the established employment
procedure and the necessary proofs of insurance in one's
respective country were not presented, a situation might occur
that a person would remain not insured at all, therefore in the
case of the event insured against he might remain without
respective assistance.
Taking account of the motives and arguments set forth one
is to conclude that sub-Item 11 of Item 19 of the Regulations
for Forming and Implementation of the State Social Insurance
Fund Budget approved by Government Resolution No. 266 of 20
February 1995 is in compliance with Article 1 of the Law on
State Social Insurance.
3. The petitioner - the Klaipėda City District Court -
also requested to investigate whether Construction No. 06-223
of 21 April 1994 by the Board of the State Social Insurance
Fund was in compliance with Article 1 of the Law on State
Social Insurance.
Part 1 of Article 102 of the Constitution, as well as
Article 1 of the Law on the Constitutional Court, provides that
the Constitutional Court shall decide whether the laws and
other legal acts adopted by the Seimas are in conformity with
the Constitution and legal acts adopted by the President and
the Government do not violate the Constitution or laws. Thus
the Constitutional Court shall not decide questions of
lawfulness of legal acts adopted by ministries or other
governance institutions (Part 1 of Article 63 of the Law on the
Constitutional Court). Part 5 of Article 11 of the Code of
Civil Proceedings prescribes that after a court of general
competence has established that a legal act which is not under
the jurisdiction of the Constitutional Court contradicts the
laws the said court must not follow the said act when adopting
its decision.
Taking account of this the legal proceedings in the case
as to Construction No. 06-223 of 21 April 1994 by the Board of
the State Social Insurance Fund are to be dismissed.
Conforming to Article 102 of the Constitution of the
Republic of Lithuania and Articles 53, 54, 55, 56 and Part 3 of
Article 69 of the Law of the Republic of Lithuania on the
Constitutional Court, the Constitutional Court has passed the
following
ruling:
1. To recognise that sub-Item 11 of Item 19 of the
Regulations for Forming and Implementation of the State Social
Insurance Fund Budget approved by Government of the Republic of
Lithuania Resolution No. 266 of 20 February 1995 is in
compliance with Article 1 of the Republic of Lithuania Law on
State Social Insurance.
2. To dismiss the legal proceedings in the case as to
Construction No. 06-223 of 21 April 1994 by the Board of the
State Social Insurance Fund.
This Constitutional Court ruling is final and not subject
to appeal.
The ruling is promulgated on behalf of the Republic of
Lithuania.