Industrial relations developments 2006 — Estonia
Disclaimer: This information is made available as a service to the public but has not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.
Social dialogue is still relatively weak in Estonia and most of the working conditions are agreed on personal basis. Only one national level wage agreement was concluded, the number of company level agreements is not available. However, there is more pressure from employees’ organisations for wage raise than before. There were several protest actions and pickets, but no strikes. The most significant legislative development that will regulate the future social dialogue was passing the new Employees’ Representatives Act at the end of 2006. Also, legislation on childcare, social protection of unemployed and occupational health and safety of self employed persons was amended.
1. Political developments
The government formed in April 2005 by representatives of the right-wing Reform Party (Eesti Reformierakond), the left-of-centre Estonian Centre Party (Eesti Keskerakond) and the centrist Estonian People’s Union (Eestimaa Rahvaliit) remained in power during 2006. No government elections took place during the year.
No regional or local elections took place during the year.
The political milestone in 2006 was elections of President of the Republic of Estonia. The new President Mr Toomas Hendrik Ilves gave an oath of office on 9 October 2006. On 11 December the President had a meeting with representatives of trade unions in order to discuss the subjects related to industrial relations. Regular meetings between the trade union representatives and the President have become a tradition.
There will be the Government elections held in March 2007.
2. Collective bargaining developments
There are no reliable statistics on the number and content of collective agreements in Estonia. Two sources of information are used: 1) the register of collective agreements administrated by Ministry of Social Affairs (Sotsiaalministeerium) which includes only part of the agreements since there is no surveillance system or punishments for violations present. 2) Expert opinions of main partners in social dialogue: The Estonian Employers’ Confederation (Eesti Tööandjate Keskliit ETTK), Confederation of Estonian Trade (Eesti Ametiühigute Keskliit, EAKL), Estonian Employees’ Unions’ Confederation (Teenistujate Ametiliitude Keskorganisatsioon, TALO), and also Ministry of Social Affairs.
On national level one bipartite agreement for minimum wage for 2007 was concluded between EAKL and ETTK (see below). It is estimated to affect directly about 70,000 employees (about 11% of employees) who earn minimum wage or whose wages are related to the minimum wage. Also, minimum wage agreement was concluded for the members of TALO (EE0601103N) (mainly public sector cultural and educational workers, extends to about 40,000 employees). There were no sectoral level agreements concluded in 2006. Negotiations over wage issues and financing of the health care sector started in May, in September the employees’ representatives turned to the Public Conciliator and if the agreement will not be reached by January 2007, health sector employees will start a strike (ee0608019i, EE0602101N).
Most collective bargaining in Estonia is still conducted at the enterprise level. It is difficult to say what the number of agreements at enterprise level is. The register of collective agreements indicates that in 2006, 85 collective agreements were concluded at enterprise level (compared to 52 agreements concluded in 2005). At the same time, EAKL is aware of 169 enterprise level agreements valid in 2006 (138 in 2005) and TALO estimates the agreements in its member institutions to reach up to 250.
- Pay
A monthly bulletin Main Social and Economic Indicators of Estonia by Statistics Estonia (Statistikaamet, ESA) indicates that in the third quarter of 2006 the average wage was EEK 9,068 compared to the EEK 7,786 in the same period of 2005. In the first three quarters of 2006 the average wages rose by 16.5%, the same indicator in 2005 was 10.9%. There is no statistics for the year 2006 yet.
General pressure to raise wages has increased by trade unions. The shortage of work force (EE0605029I, EE0607019I, EE0608019I, and EE0609029I) and economic growth has strengthened the position of employees.
On 20 December 2006 a national level bipartite agreement for minimum wage 2007 was concluded between the EAKL and the ETTK. From 1 January 2007 the minimum wage will be EEK 3,600 (€230) per month and EEK 21.50 (€1.37) per hour. The trade unions representatives were satisfied with the results since the level of minimum wage has never increased as much as 20% before.
TALO and the Government concluded an agreement for raising the wages and financing of educational and cultural workers. The agreement stipulates that public sector employees with higher education, who work full-time in a position requiring higher education and are members of TALO, will be EEK 7,475 per month. This is 15% increase compared to previous year.
The representatives of health sector employees apply for a 32% rise in the salaries of doctors, 35% rise for nurses and 28% rise for caregivers (see above) (EE0608019I). The Estonian Hospitals’ Association (Eesti Haiglate Liit, EHL) is offering respectively 20%, 33% and 20% increases. The agreement has not been reached yet.
EAKL pointed out that agreements in their member companies included rather different levels of wage increase varying from around 4% in a railway company to about 30% for specialists in an airline company.
- Working time
There have been no important developments or discussions on working time issues in collective bargaining in 2006.
- Training and skills
There was concluded a multipartite social partners agreement to develop vocational education system and guarantee preparation of qualified labour force in years 2006-2009. The agreement states the importance of vocational education and that parties will participate in development of the new national development plan for vocational education in the years 2009-2013.
Both TALO and EAKL regard training and lifelong learning a problematic and under covered issue in the collective agreements.
- Other issues
EAKL has pointed out that different collective agreements in 2006 have covered the issues of amendment, termination and suspension of employment contracts, computation of length of service in companies, occupational health and safety, social guarantees and cooperation between employers and trade unions.
3. Legislative developments
In December 2006, after a long discussion period (EE0604019I) the Employees’ Representatives Act was passed in the Parliament. One of the goals of the act was to implement EU Directive 2002/14/EC on informing and consulting of employees. The act prescribes employers obligation to inform and consult workers in case of both presence and non-presence of a trustee. The information and consultation framework prescribed in directive is now obligatory on all employers who have at least 30 employees.
The Estonian parliament amended those articles of the Employment Contracts Act that legally permitted the dismissal of employees aged over 65 years on the basis of their age (EE0604029I).
The amendments in Unemployment Insurance Act that took effect from 01.01.2007 made the unemployment insurance benefit available to long term unemployed. The main eligibility criterion – a reference period for counting previous employment experience – was extended from 24 months to 36 months. Now, working 12 months during the previous 36 months gives eligibility to unemployment insurance benefits. Also, all long-term unemployed are guaranteed health insurance from 2007 in order to motivate long-term unemployed to register themselves and thus be included to active labour market policies. The insurance is provided for 270 days.
Unemployment benefit in Estonia was increased from EEK 400 (€ 26) to EEK 1,000 (€ 64) per month and the subsistence level for a single person was increased from EEK 750 (€ 48) to EEK 900 (€ 58) (ee0610019i).
The income tax was decreased from 23% to 22%. Minimum reference rate for social tax contribution increased in 2006 from EEK 700 to EEK 1400 and it was decided that in 2007 it will increase from EEK 1400 to EEK 2000.This concerns mainly self-employed persons (EE0605019I) and employers hiring low paid part-time workers.
On 20 December the Occupational Health and Safety Act was amended and extended to self employed persons. Also, the accidents of self employed at work situations are now registered as work accidents if they take place working in a collective.
4. Organisation and role of the social partners
There have been no significant changes during 2006.
5. Industrial action
There were no strikes held in Estonia. In one occasion the parties arrived to agreement before the strike was started. In June 2006 the Estonian Transport and Road Workers’ Trade Union (Eesti Transpordi- ja Teetöötajate Ametiühing, ETTA) threatened to arrange a strike in a bus company GoBus in two Estonian cities (EE0607019I).
Other kinds of industrial actions
- In 2006, there were six collective labour dispute-settlement applications presented to the Public Conciliator. These disputes involved around 27,000 employees. Three disputes have ended with a positive result, three are still unresolved. The reason is that half of the year 2006 the position of Public Consiliator was empty. The main reasons for the collective labour disputes were wage questions and training. Also, there have been problems with the resistance from employers to start collective negotiations with the representatives of employees.
- On 25 May 2006 EAKL and other trade unions held a protest action with about 300 trade nion members in front of the government building in order to express dissatisfaction with the proposed Employees’ Representatives Act (EE0604019I, EE0512101N). Another protest action with 130 participants was held on the same purposes on 20 April 2006 in front of the Ministry of Social Affairs (Sotsiaalministeerium).
- On 31 August 2006 a picket was held by tram and trolleybus drivers in order to achieve equal salaries with bus drivers (EE0609029I). About 30 public transport drivers and trade union representatives picketed in front of the Tallinn Tram and Trolleybus Company (Tallinna Trammi- ja Trollibussi Koondis, TTTK). As a result in December the salaries of tram and trolleybus drivers were raised by 20%.
- 14 September 2006 the State and Local Administration Institutions’ Workers’ Trade Union (Riigi- ja Omavalitsusasutuste Töötajate Ametiühingute Liit, ROTAL) held a demonstration with 100 participants in front of the government building. Demonstration was held in order to demand a rise in salaries in the civil defence sector (EE0605029I).
- On 25 September 2006 a picket was held by the Independent Union of Estonian Seafarers (Eesti Meremeeste Sõltumatu Ametiühing, EMSA) in order to draw attention to the possible threats related to the plan of Tallink (an Estonian shipping company) executives to register their ships in Latvia. This would mean that about 300 Estonian seamen jobs would be lost. By now only one ship has been reregistered in Latvia and there have been no massive job losses. The insecure job conditions have caused many skilled workers to leave the company.
6. Cross-border mobility
In terms of cross-border mobility, the issue of importing migrant workers to Estonia has been topical for the social partners, foreign experts and the media due to the increasing shortage of employees (EE0605029I, EE0607019I, EE0608019I, EE0609029I, EE0612019I) and ageing of population. The social partners are negatively disposed towards bringing in cheap unskilled labour. However, they are in favour of bringing in qualified specialists.
There is no statistics on the number of Estonian employees that have gone abroad to work. Similar system as it is in the EU for coordination of social security systems (free movement and social security) came into force between Estonia and Canada in 1 November 2006 according to which pensions are paid to Estonians working in Canada and vice versa.
In November 2006 changes in the State Pension Insurance Act were made. The amended act gives a right to receive national pension if the length of employment acquired in Estonia and abroad is altogether 15 years or more. Before, only employment in Estonia was counted. However, the national pension is paid only for years worked in Estonia.
7. Reconciliation of work, family and private life
From November 2006, Social Welfare Act set standards for the providers of childcare service and child minders. The occupational standard and qualification system for babysitters was created earlier - in January 2006 the first professional babysitters in Estonia received their diplomas. There are state-commissioned vacancies for future babysitters on the level of vocational education and it is planned to create an Estonian-wide informational system of child care services. The possibility of creating a system of benefits for parents hiring the babysitter has been considered since it is more expensive than kindergarten. The local government of Tallinn already provides the benefit (EEK 1795, €115). The lack of childcare possibilities has been one of the main obstacles for family and work reconciliation.
Parental Benefit Act was changed to make fathers eligible to a parental leave benefit earlier than before. Parents are eligible to benefits with 100% of wage substitution rate for 14 months from the birth. If earlier fathers had no right for a benefit before 6 months from the birth of a child then from July 2007 they become eligible 70 days after the birth.
8. Other relevant developments
On 7 December 2006, after long disputes between the trade unions, employers and government representatives, a new National Conciliator, Henn Pärn was appointed to office. (On a role and activities of National Conciliator see: EE0501104F). The post was not fulfilled for half a year as the social partners could not agree on the person who should be it.
In 2006 the Ministry of Social Affairs (Sotsiaalministeerium) and the Ministry of the Interior (Siseministeerium) proposed a draft law to the government that makes it easier for the local government associations to receive authorization to negotiate collective agreements on behalf of the Estonian local government units. The present situation does not enable to negotiate with the local government associations who are in legislation equalized with the employers and should be therefore competent to conclude collective agreements. However, in order to negotiate lawfully, the local government associations need consent from every single local government unit. If only one of all these local government units uses their veto power, the negotiations are failed. Collective agreements can only be concluded between employees and a local government unit. It is not possible to conclude agreements that would extend to all of local government employees in Estonia.
9. General
9.1 Commentary by the NC
Regarding the government elections held in March 2007, the content and continuity of the national level collective agreements concluded between the government and representatives of trade unions or employers’ associations may be changed. However, the current Ministry of Social Affairs has indicated that the wage issues will continue to be of fundamental importance in collective agreements. In addition, an important subject influencing the process of collective bargaining in a country will be the implementation of the new Employees’ Representatives Act. At the same time most important directions will be settled when the next Government will be in the office.
Õiguskantsler (Chancellor of Justice) has brought out in 2005 that the extension mechanism of collective agreements is violating the freedom of entrepreneurship. The issue will be probably high in agenda next year. This is brought out both by EAKL and ETTK.
EAKL has pointed out that important issues on the agenda in 2007 will be:
- the right to strike in public service (EE0603019I)
- wage systems of public officials
- extension of collective agreements
- insurance of occupational accidents and diseases
- raising the non-tax revenue to the level of minimum wage
- changing the formula of national pension insurance
Useful? Interesting? Tell us what you think.