New collective agreement to increase wages of oil shale workers

Eesti Energia, one of Estonia’s biggest employers, and the Estonian Oil Shale Producers Trade Union Confederation have concluded a collective agreement covering the next two years. The new agreement will increase the wages of around 1,500 people whose wages are the lowest in the company and which have remained unchanged for the past three years. The agreement also regulates holidays, occupational environment and safety issues, and includes support for family values.

New collective agreement

With 7,400 employees, the state-owned energy company Eesti Energia is one of the biggest employers in Estonia. During the economic crisis, the company made some structural changes with over 100 employees being made redundant in 2009 in order to optimise and modernise work processes so that the company would be more flexible and effective.

On 25 April 2011, Eesti Energia and the Estonian Oil Shale Producers Trade Union Confederation (EPTAL) signed a collective agreement valid for two years. According to the new collective agreement, the wages of piece-workers will be increased by 5% and the wages of time-workers (people whose salary is based on time worked rather than the amount of work done) will be increased by 11%. Overall, the collective agreement will increase the wages of around 1,500 employees.

The new agreement complements the list of provisions supporting family values concluded in the previous collective agreement. The new agreement added financial support for children’s summer camps and the organisation of children’s Christmas parties in cooperation with the trade union. Both measures acknowledge the priority given by both sides to family values.

Negotiations for the new collective agreement

The negotiations for the new collective agreement started at the beginning of the year. The main issue raised was the possibility of increasing the wages of time-workers whose wage level was the lowest in the company and had remained unchanged for the past three years. The parties also negotiated over extended holidays, occupational environment and safety issues, and provisions that support family values.

The underlying aim of the new collective agreement, like others concluded by Eesti Energia, was to update current provisions to bring them in line with the principles of the new Labour Contracts Act (365Kb PDF), which had been amended in 2009. Another objective was to equalise the oil shale workers’ collective agreement with other collective agreements concluded by Eesti Energia.

Eesti Energia’s representative stated that the company’s wish was to equalise its collective agreements so that it would be easy for employees to move between jobs across different parts of the group. The representative also stressed that the collective agreement reflects the company’s values. The EPTAL representative pointed out that the new collective agreement was a challenge for the trade union as it had recently undergone a process of change to respond to the needs of its affiliates.

The new collective agreement reflects the expectations of both sides and is the result of active negotiations and comprehensive discussions in which both sides participated.

Commentary

Negotiations on many collective agreements in Estonia were halted as the recession began. However, recently increased activity in concluding collective agreements has been observed. This year Eesti Energia has renewed its collective agreements with most of its affiliates, including Narva Power Plants and Eesti Energia Oil Industry. Agreement has also been reached in Eesti Energia Technology Industry, where a collective agreement will be signed in May. Collective agreements have also been concluded in other fields such as the one for transport workers in Estonia signed in February 2011 (EE1102029I).

Liina Osila and Kirsti Nurmela, PRAXIS Centre for Policy Studies