Working life country profile for Estonia
This profile describes the key characteristics of working life in Estonia. It aims to provide the relevant background information on the structures, institutions and relevant regulations regarding working life.
This includes indicators, data and regulatory systems on the following aspects: actors and institutions, collective and individual employment relations, health and well-being, pay, working time, skills and training, and equality and non-discrimination at work. The profiles are systematically updated every two years.
The central concern of employment relations is the collective governance of work and employment. This section looks at collective bargaining in Estonia.
Collective bargaining in Estonia is very decentralised, and the dominant level of collective bargaining is enterprise level. After signing, collective agreements become legally binding and are valid for one year, unless the parties agree otherwise. There are only two sectors in Estonia with sector-level collective agreements: transport and healthcare. At national level, only minimum wages are negotiated. Since 1992, the national minimum wage has been agreed between the social partners – through bipartite meetings between EAKL and ETKL – and thereafter determined by government decree. The national monthly minimum wage increased from €79.90 in 1999 to €584 in 2021. In addition, there has been a national minimum wage agreement in place since 2001 for public sector cultural workers; this is negotiated between TALO and the Ministry of Culture.
Wages are usually determined in bipartite negotiations between the employer and the individual employee. The most recent research shows that collective agreements in Estonia are mostly used to determine wage conditions (93%) (Põldis and Proos, 2013).
Collective wage bargaining coverage of employees, all levels
| % (year) | Source |
| 6.1 (2018) | OECD/AIAS ICTWSS database 2021 |
| 9 (2013) | European Company Survey 2013 |
| 6 (2019) | European Company Survey 2019 |
| 19 (2010)* | Structure of Earnings Survey 2010 |
| 20 (2014)* | Structure of Earnings Survey 2014 |
| 7 (2018)* | Structure of Earnings Survey 2018 |
| 18.6 (2015) | Estonian Work Life Survey 2015** |
Notes: * Percentage of employees working in local units where more than 50% of the employees are covered by a collective pay agreement against the total number of employees who participated in the survey. ** Including companies with more than five employees. Employees self-reported coverage. However, a remarkable share of employees did not know whether they were covered by an agreement (27.6%). OECD/AIAS ICTWSS, Organisation for Economic Co-operation and Development/Amsterdam Institute for Advanced Labour Studies Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts.
Sources: Eurofound, European Company Survey 2013/2019 (including private sector companies with establishments with more than 10 employees (NACE codes B–S), the question in the survey was a multiple choice question and multiple responses were possible); Eurostat [earn_ses10_01], [earn_ses14_01], [earn_ses18_01] (including companies with more than 10 employees (NACE codes B–S, excluding O), with a single response for each local unit); OECD/AIAS ICTWSS database 2021.
In the 2009 Estonian Work Life Survey, 32.7% of employees stated that they were covered by a collective agreement, while 5.4% said that they did not know whether they were covered by a collective agreement or not. The survey also indicated that about 6% of companies had concluded a collective agreement. In 2015, the same survey showed that 18.6% of employees were covered by an agreement, while 27.6% did not know whether they were covered or not. In 2015, according to the 2015 Estonian Work Life Survey, 3.9% of companies had concluded an agreement. The differences in statistics (see the table above) may be explained by the fact that during the economic crisis many companies did not renew their collective agreements. In addition, an amendment to the Collective Agreements Act in 2012 allowed the unilateral ending of collective agreements.
National data on collective bargaining coverage
| Level | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | Source(s) |
| Sectoral | 42,500* | 42,500* | 42,500* | 42,500* | 42,500* | n.a. | n.a. | n.a. | Põldis and Proos (2013), database of collective agreements |
| National | 560,500** | 564,600** | 567,900** | 581,000** | 583,600** | 591,400 | 594,000 | 598,300 | National-level minimum wage agreement, Statistics Estonia data for salaried employees |
Notes: * Sectoral collective agreements regulating passenger transport (covering 14,000 employees), freight transport (covering 3,500 employees) and healthcare workers (covering 25,000 employees). Some of the agreements have formally expired. However, according to the law, the employers and employees concerned are required to comply with the conditions of the agreement until it is terminated by one of the parties or until they reach a new agreement (hence a collective agreement with a specified term turns into an agreement with an unspecified term). ** The statutory minimum wage applies to all employees with an employment contract.
The dominant level of collective bargaining for setting pay, regulating working time or any other issues in Estonia is enterprise level. However, working time is generally not regulated by collective agreement. There are only a few sectoral and national-level collective agreements.
Levels of collective bargaining, 2022
| National level (intersectoral) | Sectoral level | Company level | ||||
| Wages | Working time | Wages | Working time | Wages | Working time | |
| Principal or dominant level | x | |||||
| Important but not dominant level | ||||||
| Existing level | x | x | x | x | ||
Articulation
National-level collective agreements (setting the minimum wage) apply to all employees, sector-level agreements (only a few in Estonia) apply to all employees working in these sectors, and company-level agreements apply to all employees of the company. Thus, the company may be covered by a sectoral level agreement but can also have its own collective agreement.
There is no specific pattern in relation to bargaining at sectoral and workplace levels. National minimum wage negotiations usually start in the summer in order to conclude the agreement for the following year.
There are no specific coordination mechanisms.
According to the Collective Agreements Act, pay, working time or holiday conditions may be the subject of extended contracts, and such contracts may be concluded by an association or federation of employers and workers’ unions or federations, or employers’ and workers’ confederations (i.e. multi-employer agreements). In practice, extended contracts are rare in Estonia. Currently, there are extended sectoral collective agreements in two sectors (transport and healthcare), but only one is a private sector collective agreement. Several problems have emerged regarding the issues of extending collective agreements, including the lack of employer and employee associations, representativeness criteria and control mechanisms. In January 2018, the national-level social partners concluded a good practice agreement on the extension of collective agreements, which sets out representativeness criteria for the social partners (see the ‘Representativeness’ section). In November 2021, changes in the Collective Agreements Act entered into force, establishing criteria for extending collective agreements. Extensions of collective agreement conditions related to working time, rest or wages may be agreed on by:
a federation of trade unions or an industry trade union whose members account for at least 15% of the employees in that industry or which has at least 500 members
an association or federation of employers whose members employ at least 40% of the corresponding industry’s employees covered by the extended condition of the collective agreement (including companies that are not members but wish to implement the agreement in their companies)
Prior to the change in the law, there were a total of three sectoral (extended) collective agreements in two sectors: one in healthcare and two in transport (one covering freight transport, the other covering passenger transport). Due to the established criteria, after the change to the law the freight transport agreement was no longer valid, as the members of the sectoral employer organisation (the Union of Estonian Automobile Enterprises) employ around 5% of the subsectoral workforce. Therefore, the Estonian Transport and Road Workers Trade Union had to establish company-level collective agreements.
It is not possible to derogate from collective agreements. However, the Employment Contracts Act provides for derogation from some of the working time conditions set by the law on the basis of the Working Time Directive (Directive 2003/88/EC).
On 1 May 2012, the Estonian parliament passed amendments to the Collective Agreements Act, establishing the right of a party to a collective agreement to unilaterally terminate it once it has expired. Previously, the agreement would automatically remain in place until a new agreement was signed.
According to the Collective Agreements Act, the parties are required to comply with the terms and conditions of a collective agreement during the term of the agreement and to refrain from calling a strike or a lockout with the aim of amending the terms and conditions provided for in the collective agreement (peace obligation).
According to the Collective Labour Dispute Resolution Act, parties have the right to carry out industrial action only in cases where the peace obligation is not in force and where conciliation procedures have been conducted but no conciliation has been achieved.
