Employment law in Estonia
Employment law in Estonia is governed primarily by the Employment Contracts Act (ECA), which is the main piece of legislation that regulates the relationship between employers and employees. The ECA outlines the rights and obligations of both parties, covering aspects such as employment contracts, working conditions, wages, and termination of employment. In addition to the Employment Contracts Act, there are various other laws and regulations related to social security, health and safety, and discrimination.
Here’s an overview of the key aspects of employment law in Estonia:
1. Employment Contracts
Written Contracts: While an employment contract can be made verbally, a written employment contract is required for certain types of employment, such as fixed-term contracts. It is advisable for both the employer and employee to have a written contract that outlines the terms and conditions of employment, such as salary, working hours, job duties, and the duration of the contract.
Types of Contracts: Employment contracts in Estonia can be:
Indefinite-term contracts (permanent employment).
Fixed-term contracts, which should not exceed 5 years. If a fixed-term contract is extended beyond this period, it is deemed a contract for an indefinite term.
Probation Period: It is common to have a probationary period (usually up to 4 months) for new employees during which either party can terminate the contract with a shorter notice period.
2. Working Hours
Standard Workweek: The standard workweek in Estonia is 40 hours (8 hours per day, 5 days a week). Employees are entitled to at least 11 consecutive hours of rest in a 24-hour period and 35 consecutive hours of rest over a 7-day period.
Overtime: Overtime work requires the employee’s consent, and overtime pay is generally 1.5 times the normal wage, unless otherwise agreed. Overtime should not exceed 8 hours per week or 48 hours per month, and the total overtime for an employee cannot exceed 200 hours per year.
3. Minimum Wage
Minimum Wage: Estonia has a statutory minimum wage, which is set by the government. As of 2025, the minimum monthly wage is €1,320. The minimum wage is typically reviewed and adjusted annually.
4. Vacation and Leave
Annual Leave: Employees are entitled to a minimum of 28 calendar days of paid annual leave. Some employers offer more, especially for longer service.
Sick Leave: Employees are entitled to sick leave starting from the first day of illness. The first 3 days of sick leave are paid by the employer, and from the 4th day onward, the sickness benefit is paid by the Estonian Health Insurance Fund (EHIF).
Public Holidays: Estonia observes several public holidays, and employees are entitled to paid leave on these days. If employees work on a public holiday, they are entitled to double pay or compensatory time off.
5. Maternity and Paternity Leave
Maternity Leave: Female employees are entitled to 140 days (approximately 4.5 months) of maternity leave, which can be taken before or after the birth. Maternity benefits are paid by the Estonian Health Insurance Fund, and they typically cover 100% of the employee’s average wage during the leave.
Paternity Leave: Fathers are entitled to 10 days of paternity leave following the birth of their child. This leave is paid by the state.
Parental Leave: After maternity or paternity leave, either parent can take parental leave, which lasts until the child is 3 years old. Parents receive a parental benefit, and it is paid at a percentage of their average income.
6. Social Security and Benefits
Social Security Contributions: Both employers and employees are required to make contributions to Estonia's social security system, which covers health insurance, pensions, unemployment benefits, and accident insurance.
Health Insurance: Health insurance is mandatory for all employees, and employers must ensure that employees are covered by the Estonian Health Insurance Fund.
Unemployment Insurance: Employees are entitled to unemployment benefits if they have paid into the unemployment insurance system. The amount and duration of unemployment benefits depend on the employee's work history and salary.
7. Termination of Employment
Notice Period: The notice period for terminating an employment contract depends on the duration of employment:
Less than 1 year: 15 days
1–5 years: 30 days
Over 5 years: 60 days
Termination by Employer: Employers can terminate an employment contract for various reasons, such as redundancy, business closure, or performance issues. However, the termination must be legally justified, and the employee is entitled to severance pay under certain conditions.
Termination by Employee: Employees can terminate their contract by giving the appropriate notice period, as specified in the employment contract or the law.
8. Non-Discrimination and Equal Treatment
Equal Treatment: The Estonian Labour Code prohibits discrimination based on gender, race, religion, age, disability, sexual orientation, and other protected characteristics. Employers must ensure that they provide equal treatment and opportunities for all employees.
Harassment: Harassment and bullying in the workplace are prohibited by law. Employees have the right to a work environment free from harassment, and employers are required to take action if harassment occurs.
9. Health and Safety
Workplace Safety: Employers must provide a safe working environment for employees and ensure that health and safety standards are followed. This includes conducting risk assessments, providing necessary safety training, and ensuring that employees have access to appropriate personal protective equipment.
Workplace Accidents: In case of workplace accidents, employees are entitled to compensation for medical costs, rehabilitation, and lost income.
10. Employee Rights and Protections
Pregnancy Protection: Pregnant employees are protected from dismissal during their pregnancy and maternity leave. Employers are not allowed to terminate an employee for reasons related to pregnancy or parental leave.
Part-Time and Temporary Workers: Part-time and temporary employees are entitled to the same rights as full-time employees, including paid leave, sick leave, and public holidays, on a pro-rata basis.
Collective Bargaining and Unions: Employees have the right to join trade unions, and unions can engage in collective bargaining on behalf of employees. Collective agreements are legally binding and regulate issues such as wages and working conditions.
11. Foreign Workers
Work Permits: Foreign workers from outside the European Union (EU) need a work permit and residence permit to work in Estonia. However, workers from EU member states have the right to work in Estonia without a work permit.
Employment Contract Requirements: Foreign workers must have a valid employment contract that complies with Estonian labor laws, including provisions on wages, benefits, and working conditions.
12. Remote Work and Flexibility
Estonia has seen an increase in remote working and telecommuting, especially since the COVID-19 pandemic. While remote work is not explicitly addressed in the Employment Contracts Act, employers and employees can mutually agree to work from home, as long as the working conditions comply with the legal requirements (e.g., maximum working hours, health and safety standards).
Conclusion
Estonia's employment laws are designed to balance the rights of workers with the needs of employers, offering protections such as fair pay, safe working conditions, and job security. The country has strong anti-discrimination laws, comprehensive social security benefits, and progressive leave policies. However, as with any legal framework, both employees and employers should stay informed about changes and amendments to employment laws to ensure compliance.
RELATED Blog
0 comments