Social partners discuss new Employment Contracts Act

During August 2003, representatives of central trade union and employers' organisations in Estonia held negotiations over the draft of a new Employment Contracts Act. They reached consensus on a number of issues but their views still differ on some points. Parliament is likely to debate the draft Act in the autumn

In April 1992, the Estonian parliament (Riigikogu) ratified the [Employment Contracts Act](http://www.legaltext.ee/en/andmebaas/tekst.asp?loc=text&dok=X1056K7&keel=en&pg=1&ptyyp=RT&tyyp=X&query=employment contracts). It came into effect in July 1992 and, with several amendments, is still in force today. A draft of a new version of the Act has been under discussion for some time, aimed at making employment relationships more flexible and leaving more room for agreements between employees and employers. According to the secretary of the Confederation of Estonian Trade Unions (Eesti Ametiühingute Keskliit, EAKL) (EE0308101F), Harri Taliga, the failure so far to adopt the new Employment Contracts Act is one of the main shortcomings in Estonia's application of the 'acquis communautaire' (ie the body of EU law that countries must adopt before joining the Union) in the employment and social area. The adoption of a reformed Employment Contracts Act is also stipulated by the Law of Obligations Act, which came into force in 1 July 2002.

Employers’ organisations and trade unions submitted several conflicting proposals for amendment of the draft of the new Employment Contracts Act. The main areas where the social partners had differing views were: fixed-term employment contracts; the balance between employees’ and employers’ obligations; employees' 'material responsibility' and compensation for damage caused; and termination of employment contracts and the related compensation.

In June 2003, the Ministry of Social Affairs made a proposal aimed at helping the social partners find compromises on the main points of disagreement concerning the new Act. In August, the central organisations – EAKL and the Estonian Employers' Confederation (Eesti Tööandjate Keskliit, ETTK) - opened negotiations which have since led to compromises on many issues. According to a lawyer at ETTK, Renno Mägi, the main points of agreement relate to: the regulation of fixed-term contracts; disciplinary procedures; constraints on employees’ actions; and business secrecy. However, the social partners still have differing opinions on issues such as the conditions of reinstatement of dismissed employees and severance payment. Both partners consider it necessary that the new Act should not come into force for six months after its adoption and promulgation. There is also seen to be a need for a state-financed training programme of at least 20 hours on the new legislation for labour inspectors, members of conciliation councils, judges and representatives of employers and employees.

Negotiations over the new Employment Contracts Act were to continue between EAKL and ETTK in September. In the same month, the government will consider the draft of the Act, and the extent to which it will take into account the joint views of the social partners will then become apparent. The draft should then be finalised and submitted to parliament for debate, probably during the autumn.