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.
‘Individual employment relations’ refers to the relationship between the individual worker and their employer. This relationship is shaped by legal regulation and by the outcomes of social partner negotiations over terms and conditions. This section looks at the start and termination of the employment relationship and entitlements and obligations in Estonia.
European Industrial Relations Dictionary: Employment relationship
Requirements regarding an employment contract
The Employment Contracts Act stipulates that as a rule an employer must not enter into an employment contract with a minor under 15 years of age or a minor subject to the obligation to attend school, or allow such a minor to work. However, in exceptional circumstances, an employer may enter into an employment contract with a minor of 13–16 years of age subject to the obligation to attend school and allow them to work if their duties are simple and do not require any major physical or mental effort (light work). Minors of 7–12 years of age are allowed to do light work in the field of culture, art, sports and advertising.
An employment contract must be entered into in writing. An employment contract is also deemed entered into if an employee commences work that, under the circumstances, can be expected to be done only for remuneration. An employment contract is presumed to be concluded for an unspecified term. It may be concluded for a specified term of up to five years if it is justified by good reasons, or of up to the period of substitution in the case of the substitution of an employee who is temporarily absent, or in the case of temporary agency work.
Since 2014, all forms of employment (paid or voluntary work) have had to be registered by the employer in the employment register under the Tax and Customs Board when the employee starts working.
Dismissal and termination procedures
Dismissal and termination procedures are described in the Employment Contracts Act. According to the act, parties to the contract may terminate an employment contract at any time by agreement. However, the employee must notify the employer at least 30 days in advance, while the employer must notify the employee at least 15–90 days in advance (depending on the length of the employment relationship).
Contracts can also be terminated extraordinarily under certain circumstances. An employee can do this if they are unable to perform their duties or if the employer has committed a fundamental breach of their obligation to the employee. The employer can terminate the contract for good reasons arising from a worker’s long-term inability to perform their duties or for economic reasons such as a decrease in work volume, the reorganisation of work or bankruptcy.
In the event of collective dismissal, the employer must inform and consult with the employee representative, or with the employees if they do not have a representative, and notify the EUIF.
Collective dismissal means the cancellation, within 30 calendar days due to lay-offs, of the employment contracts of no fewer than:
5 employees in an enterprise where the average number of employees* is up to 19
10 employees in an enterprise where the average number of employees* is 20–99
10% of the employees in an enterprise where the average number of employees* is 100–299
30 employees in an enterprise where the average number of employees* is at least 300
Note: * The average number of employees is based on the six-month period prior to the day on which employees are informed of the collective dismissal.
Publication: Eurofound (2013), Social partners’ involvement in unemployment benefit regimes in Europe (see information on Estonia).
Parental, maternity and paternity leave
This section looks at the terms and conditions of parental, maternity and paternity leave. In 2018, the parental leave and benefit system was reformed. The changes, which took effect gradually from March 2018 to April 2022, aim to achieve a more flexible system, promote working and encourage fathers’ participation in childcare. With these changes, it is possible for both parents to receive the benefit simultaneously, to receive it over a longer period (3 years instead of 1.5 years) and to receive higher income from employment while on parental leave. In addition, 30 days of paternity leave, reserved only for fathers, were introduced in July 2020. The take-up of parental leave by fathers increased steadily from 6% in 2014 to 16% at the end of 2020, with a more rapid increase from 8% to 16% taking place between 2018 and 2020.
Statutory leave arrangements
| Maternity leave | |
| Maximum duration | A woman has the right to 140 calendar days of maternity leave. The leave may be taken 30–70 days before the estimated date of birth (from the 30th to the 36th week of pregnancy), as determined by a doctor or midwife. If a woman starts her maternity leave less than 30 days before the estimated date of birth, leave is shortened by the relevant period. |
| Reimbursement | 100% of average income per calendar day (maternity benefit). |
| Who pays? | Estonian Health Insurance Fund |
| Legal basis | Employment Contracts Act, Article 59; Health Insurance Act, Article 54. |
| Parental leave | |
| Maximum duration | A mother or father has the right to parental leave until his or her child reaches the age of three years. Parental leave may be used by one person at a time. Since April 2022, parents have been allowed to be on leave simultaneously for up to two months. |
| Reimbursement | The benefit is granted for 435 days from the date on which the right to receive the benefit arises. If the mother of the child does not have the right to receive maternity benefit, parental benefit is granted until the day the child reaches 18 months of age. The amount of benefit per calendar month is equivalent to 100% of the average income per calendar month calculated on the basis of the social tax paid during the 12 months preceding the pregnancy (9 months are deducted from the date of birth and the preceding 12 months are taken as the basis for the calculation). |
| Who pays? | State budget, social insurance tax. |
| Legal basis | Employment Contracts Act, Article 62; Family Benefits Act, Chapter 3. |
| Paternity leave | |
| Maximum duration | 30 calendar days, as of July 2020. This can be taken at once or in parts. It is added to the period of parental leave. |
| Reimbursement | Paternity leave is remunerated on the basis of the father’s average wages; the conditions are as parental leave benefit. |
| Who pays? | State budget, social insurance tax. |
| Legal basis | Employment Contracts Act, Article 60; Family Benefits Act, Article 33. |
Sick leave
If an employee is ill, they have the right to receive sickness benefit from the fourth day of illness. The first five days are paid by the employer (fourth to eighth day of sickness), and the following days by the Estonian Health Insurance Fund. The amount of the benefit is 70% of the person’s average wage. The benefit is paid for a maximum of 182 consecutive calendar days. Since 2017, employers have been able (but not obliged) to compensate employees for the second and third day of sickness leave without having to pay the social tax, to a maximum amount of 100% of the person’s average wage.
The Employment Contracts Act (Article 88) states that an employer may, in extraordinary circumstances, cancel an employment contract if the employee has been unable to perform their duties for a long time (four months) due to their state of health. Before cancelling the employment contract, the employer must offer other work to the employee where possible, adapting the workplace or working conditions or providing training if necessary.
Retirement age
As a rule, according to the State Pension Insurance Act (Article 7), the minimum formal retirement age is 65. At present, however, it is lower and will vary from person to person, depending on when they were born, up until 2026. By 2016, the retirement age for women had gradually increased from 60 to 63. Hence, as of 2016, the retirement age for both men and women was 63. It will continue to gradually increase to 65 by 2026. In 2018, pension reform was finalised. With these changes, as of 2027, the retirement age will be tied to life expectancy. It is expected that by 2060 the retirement age will be 68 years and 10 months. A person has the right to receive their old-age pension one to five years before retirement age (depending on the pension qualifying period) and at any time after reaching retirement age.
