Following independence in 1991 Latvia replaced much of its old Soviet based labour law with a new code in 2002. This drew heavily on international and particularly European Union law. In addition to new labour laws, the reforms established a national consultation mechanism between government, employer and employee organisations with a view to promoting employment harmony and social and economic development.
Employment contracts should be in writing. Contracts are mostly of indefinite length but fixed term contracts are permitted in certain limited circumstances, not to exceed five years, including extensions. The labour law seeks to avoid differential treatment between the two types of contract.
Employees can seek to protect their interests through the mediation of an employee representative. Authorized employee representatives are often appointed by a trade union but can be elected under the law whenever an undertaking has 5 or more employees.
Collective agreements both at company and higher levels play an important role in Latvian employment terms and conditions.