The government resolution increasing the coefficient of calculation of compensation for travel on official assignments conflicts with the Constitution and laws in terms of the procedure of its adoption
By its ruling of 7 June 2021, the Constitutional Court recognised that the resolution (No 1038) of the Government of 16 October 2019 on amending the resolution (No 99) of the Government of the Republic of Lithuania of 28 January 2003 on the approval of the rules on the deduction of the costs of the travel on official assignments from income (hereinafter referred to as the government resolution of 16 October 2019) was, in terms of the procedure of its adoption, in conflict with Item 2 (“The Government of the Republic of Lithuania [...] shall execute laws, the resolutions of the Seimas on the implementation of laws, as well as the decrees of the President of the Republic”) of Article 94 of the Constitution, with the constitutional principles of a state under the rule of law and responsible governance, Paragraph 2 of Article 38 and Paragraph 1 of Article 40 of the Law on the Government, and Items 4 and 5 of Paragraph 2 of Article 3, Paragraph 2 of Article 7, and Paragraph 1 of Article 9 of the Law on the Legislative Framework.
After Subitem 2.5 of the government resolution of 28 January 2003 had been amended by the government resolution of 16 October 2019, the coefficient, by which the minimum monthly salary or the minimum hourly rate must be multiplied, when calculating the daily allowance considered as compensation for travel abroad on official assignments, was increased from 1.3 (established previously) to 1.65. The Constitutional Court held that the amount of such a coefficient is an essential element of the legal regulation consolidated in this subitem, which determines the amount of remuneration, having established which, the daily allowance paid to a posted abroad employee is not subject to personal income tax and, therefore, the amount of the coefficient affects the interests of both the employee and the employer.
The Constitutional Court established that, when adopting the impugned government resolution, the legislature disregarded the requirement laid down in Paragraph 2 of Article 38 and Paragraph 1 of Article 40 of the Law on the Government to coordinate, in accordance with the Rules of Procedure of the Government, a draft legal act submitted to the Government with other institutions with the competence of which the relevant draft legal act is linked, as well as other parties concerned; the legislature also disregarded the principles of openness, transparency, and publicity of law-making, as consolidated in Items 4 and 5 of Paragraph 2 of Article 3 of the Law on the Legislative Framework, the requirement, established in Paragraph 1 of Article 9 of this law, to follow, among others, these law-making principles, when preparing a draft legal act, as well as the requirement, established in Paragraph 2 of Article 7 of this law, for entities preparing and adopting draft legal acts on essential issues to submit these draft legal acts and evaluation of the proposals received from persons to the public on time.
In the ruling, the Constitutional Court held that, when adopting the impugned resolution of the Government of 16 October 2019, the legislature disregarded the duty of the Government, stemming from the Constitution, to pay regard to legislative procedural requirements in adopting legal acts, among others, to observe valid laws establishing the procedure for adopting legal acts and the lawmaking rules established by resolutions of the Government itself, as well as the requirements of publicity and transparency of law-making procedures implied by the constitutional principle of responsible management.
In view of the fact that, if the ruling of the Constitutional Court in this case were officially published immediately after its public pronouncement at the hearing of the Constitutional Court, a gap and uncertainty would occur in the legal regulation of the organisation of the activities of certain economic operators, which could cause negative consequences for the activities of the relevant economic operators and the rights of their employees, as well as of the fact that a certain period of time is necessary to remove the said gap and uncertainty, the Constitutional Court decided that this ruling of the Constitutional Court is to be officially published in the Register of Legal Acts on 3 January 2022.