Estonia: Latest developments in working life Q3 2019

Disagreements among social partners about the national minimum wage for 2020, health and safety guidelines for telework and changes to the Aliens Act to give more responsibility to employers are the main topics of interest in this article. This country update reports on the latest developments in working life in Estonia in the third quarter of 2019.

National minimum wage agreement at risk

In July 2019, the Confederation of Estonian Trade Unions (EAKL) and the Estonian Employers’ Confederation (ETKL) started negotiations over the national minimum wage for 2020. The social partners used the new methodology, agreed in 2017, and made the draft agreement available for public consultation. According to the new methodology, the basis for the negotiations will be labour productivity and economic growth until 2022.

The draft agreement for 2020 was concluded on 2 September and planned to raise the minimum wage by 7%, from €540 to €578 per month. The ETKL sees the agreed 7% increase as a good offer given that the average wage has increased by 6% and economic growth is beginning to slow. ^[1]

However, the EAKL council announced they disagreed with such a low percentage increase. The council stated that there had been a lively debate on the minimum wage, that the vast majority saw the result as inadequate and that the minimum wage should be at least €600 to reach 40% of the average wage (this is a condition set in the methodology). The EAKL’s reaction has put the agreement at risk. Head of the EAKL Peep Peterson stated that the council’s decision was a risk that might result in no agreement or the government unilaterally determining the minimum wage, which has not happened in Estonia before. ^[2]

The next meeting has been scheduled for 23 October and if no agreement is reached, the parties will turn to the National Conciliator. ^[3]

Health and safety guidelines for telework

In June 2017, Estonian peak level social partners concluded a joint agreement on teleworking that aimed to set standards and be the foundation for the development of good practices. ^[4] The agreement includes 10 guiding rules related to teleworking, including that:

• teleworking is voluntary and based on a mutual agreement that can be cancelled
• all employees with similar responsibilities should have equal opportunities to undertake telework
• teleworking employees have the same rights as other employees do.

In April 2018, a similar agreement was concluded in the public sector.

For employers, the most troublesome part of telework is related to health and safety issues and, more specifically, how to ensure the health and safety of employees when they work outside of an employer’s premises (according to legislation, the employer is responsible for this regardless of the location of the employee). Concerns have also been raised that the agreements are too general for everyday use.

To address this issue, in July 2019, the Ministry of Social Affairs published guidelines and recommendations for employers and employees on how to ensure safety in the case of telework. These documents give thorough explanations and provide answers to key questions about telework such as when, where and how telework can be performed; how to ensure health and safety; and how to assess risks in the remote working environment.

• Ministry of Social Affairs: Kaugtöötaja töötervishoid ja -ohutus

Employers to have greater responsibility for foreign workers

The topic of filling gaps in the Estonian workforce with foreign workers has been under discussion for several years. In line with this, the government has made several changes to allow more foreign workers to come to Estonia including:

• extending the period for short-term working
• lowering the obligatory monthly pay level of third country nationals from 1.24 times the country’s average pay to the same as the country’s average pay, and abolishing the obligation for seasonal workers
• excluding highly qualified specialists, employees of start-ups and specialists in the ICT field from the immigration quota

However, employers are demanding more changes and mitigations. They have said that they will continue to use foreign workers regardless, but if no further changes are made then the risk of undeclared and illegal work increases. According to the Ministry of Interior, several companies using foreign workers have seemingly complied with the law to take advantage of more favourable conditions (for example, by establishing a company in another EU Member State). ^[5]

To avoid such situations, the ministry issued a draft legislation in July 2019 that will place more responsibility on employers, especially regarding the use of temporary agency workers, as of 15 December 2019. According to the changes, a reverse burden of proof regulation will be added to the Aliens Act. This regulation stipulates that the employer, user company, receiving unit and foreign worker will be obligated to prove that the foreign worker meets the legal basis for working in Estonia. Currently, the sending company or the temporary agency is responsible for such an obligation.

In principle, the employer organisations support the idea of reducing the abuse of regulations regarding foreign workers in Estonia. However, they believe that the proposed legislation is unreasonable, unclear and rushed. They also feel that it has not been properly analysed or tested, and will increase the administrative burden on employers.^[6] The employer organisations suggest that the immigration quota should be removed and a proper control mechanism developed instead, so that the foreign workforce can be used in a flexible way. ^[7]

The trade unions have not expressed their views regarding the proposed legislation. However, while they understand the need for foreign workers, they disagree with the employer organisations about the extent to which foreign workers should be used. Instead, they say more support should be provided to Estonia’s native workforce to raise worker skillsets and qualifications.