Agreement reached on minimum wage increase in healthcare sector

On 25 January 2007, an agreement was reached to raise minimum wages in the health and social work sector by 25%. The negotiations had been protracted and almost culminated in a strike, which was averted through the mediation of the Public Conciliator. Discussions are continuing in relation to other conditions of the collective agreement.

Negotiation process

A new pay agreement for the Estonian health and social work sector in 2007 was due to be signed in September 2006. Employees demanded the following minimum hourly wages: EEK 110 (€7.03, as at 22 February 2007) for doctors, EEK 60 (€3.83) for nurses and EEK 32 (€2.05) for caregivers. Compared with pay rates in 2006, this wage increase would represent a 32%, 35% and 28% rise respectively. Staff also requested that the national health budget should be incremented (EE0608019I).

However, in September 2006, the government announced that few resources were available to finance the increase in healthcare spending. As a result, the Estonian Hospitals’ Association (Eesti Haiglate Liit, EHL) declared that the wages of healthcare professionals would not be raised in 2007.

Nevertheless - after the Estonian Medical Association (Eesti Arstide Liit, EAL) turned to the Public Conciliator (Riiklik Lepitaja) and threatened EHL with strike action - a 12% minimum pay increase was offered on 22 December 2006. The employees rejected EHL’s offer and continued planning the strike. The aim was to hold a three-day strike in outpatient departments in the capital city of Tallinn from 17 to 21 January 2007. From 22 January, the strike would be extended to the entire country.

On 5 January 2007, EHL made a further offer that still failed to satisfy employees. The association proposed a 20% pay increase on condition that the Estonian Health Insurance Fund (Eesti Haigekassa) would increase funding for hospitals. The Health Insurance Fund is the organisation which, among other things, allocates finances from social tax to hospitals and other health service providers.

Finally, on 17 January 2007, the parties agreed to increase the minimum wages in healthcare by 25% on average in 2007 and by another 20% in 2008. The strike was cancelled as a result.

Wage increases in healthcare

According to the new agreement, the minimum hourly wages of healthcare professionals in 2007 will increase to EEK 99 (€6.33) for doctors, EEK 52.50 (€3.36) for nurses and EEK 29 (€1.85) for caregivers, which represents 75% of the level that the employee representatives had demanded initially. Compared with the sectoral minimum wages in 2006, the pay rise stands at 24%, 26% and 21% respectively.

According to the Ministry of Social Affairs (Sotsiaalministeerium), the average hourly wages in the health and social work sector in 2006 were as follows: EEK 82 (€5.24) for doctors, EEK 43 (€2.75) for nurses and EEK 24 (€1.53) for caregivers. However, these statistics include the salaries of dentists, which increases the average wage level considerably.

The national minimum wage level in 2007 is EEK 21.50 (€1.37) per hour (EE0701029I).

Negotiations continue

Although there is consensus regarding the increase in minimum wages for 2007, the collective agreement has not yet been finalised, since the conditions for implementation of the minimum wages in 2008 are not settled. Also, several other demands remain under discussion.

For instance, as noted above, healthcare professionals had demanded a substantial improvement in funding of the sector. They proposed increasing the national budget for healthcare from 5.3% of gross domestic product (GDP) to 6.3%, and highlighted the lack of funding available for improving the quality of health services and the well-being of patients. The current proportion of spending in Estonia is the lowest in the European Union. Although the official reason for planning the strike was to secure an increase in wages, the employees claimed that the real motive for the proposed protest action is the continuing low level of funding in the health and social welfare sector. They pointed out that the average life expectancy in Estonia is also among the lowest in the EU.

The migration of healthcare workers is another cause for concern. The employees proposed increasing the pay levels of young doctors to prevent them from leaving Estonia. Moreover, they suggested greater financing for general practitioners. Thus, many important issues still have to be resolved before the collective agreement is concluded.

Kirsti Nurmela and Marre Karu, PRAXIS Centre for Policy Studies