New labour law enacted despite strike initiative
In June 2009, Estonian trade unions held a strike involving about 1,800 people to protest against the new Employment Contracts Act, which took effect on 1 July 2009. The trade unions were opposing the last-minute changes that were introduced to the act just before it took effect, which they claim will reduce the balance between employment security and labour market flexibility. For the unions, this balance was the essential purpose of the new act.
Following lengthy debates over the content and implementation of the new Employment Contracts Act – which began as far back as 2003 (EE0309101N, EE0405103F, EE0902029I) – the social partners reached a tripartite agreement on the implementation of Estonia’s new labour law in April 2008 (EE0802019I, EE0901019I). However, due to rapidly increasing unemployment levels, concerns arose that some of the new act’s provisions would impose too heavy a burden for the budget of the Unemployment Insurance Fund (Töötukassa). As the social partners could not reach agreement on measures to reduce this burden, the government decided to postpone several provisions of the new act that would have increased the expenses of the Unemployment Insurance Fund significantly.
Postponed measures generate conflict
For instance, it has been decided to maintain the unemployment insurance benefit at the current level until 2013 – that is, at 50% of the previous average remuneration during the first 100 days of unemployment and at 40% after that, instead of the planned increase to 70% and 50% respectively. Moreover, persons who terminated their employment relationship voluntarily or by agreement will not be eligible for the unemployment insurance benefit until 2013. In addition, some parental leave provisions have been changed to reduce public sector expenses.
On 3 June 2009, trade unions held a picket to protest against these changes in front of the parliament building, with the support of about 450 participants. In their opinion, the amendments reduce the balance between employment security and labour market flexibility; for the unions, this balance was the essential purpose of the new act. The trade unions demanded the implementation of the tripartite agreement or the postponement of the new act’s implementation and the initiation of tripartite negotiations over its further enforcement. As no agreement was reached, the trade unions decided to go on strike.
Strike fails to avert changes
The strike was held on 16 June 2009, involving some 1,800 participants. Among those taking part were the following: the Estonian Transport and Road Workers’ Trade Union (Eesti Transpordi-ja Teetöötajate Ametiühing, ETTA), with about 700 members from 10 companies participating; the Estonian Industry Workers’ Trade Union (Eesti Tööstustöötajate Ametiühingute Föderatsioon, EAF), involving over 600 participants in two factories; along with 300 energy workers from the Estonian Power Plant and 100 metal workers from another company. Numerous strike meetings were also held at workplaces to support the demands of the Estonian Trade Union Confederation (Eesti Ametiühingute Keskliit, EAKL).
Strike action took place in several regions of the country, mainly resulting in disruptions in public transport. In the capital city, Tallinn, the postal service was also closed temporarily, while road maintenance ceased in many cities across Estonia. In some companies, strike participation was lower than expected due to the threats made by employers in the event of participation. As strike action against government policy is not regulated in Estonia, participation in the strike was declared illegal by many employers.
Despite the protest and strike initiatives, however, the last minute changes were still implemented to the Employment Contracts Act, which finally took effect on 1 July 2009.
Views on strike
The opinions on the strike action varied significantly. According to the Chair of EAKL, Harri Taliga, the initiative was largely successful as many employers reacted to the strike, which shows that the trade unions were regarded as a considerable force. Mr Taliga also highlighted that the workers went on strike to protect their rights and not because of their wage levels, as is usually the case.
Nonetheless, the strike also generated considerable dissatisfaction. For instance, several influential journalists deemed the strike a failure as it did not lead to any outcomes, in their opinion. The Estonia Employers’ Confederation (Eesti Tööandjate Keskliit, ETK) favoured the implementation of the new law and did not agree with the trade unions’ demand to postpone its implementation, arguing that this would lead to a substantial rise in unemployment and a wave of bankruptcies. In addition, ETK considered the strike illegal due to the lack of regulations on this matter. Furthermore, owing to the current economic recession and labour market difficulties, the employers believed that the strike could harm relations between the social partners.
Kirsti Nurmela and Liina Osila, PRAXIS Centre for Policy Studies