Estonia: Posted workers

  • Observatory: EurWORK
  • Topic:
  • Working conditions,
  • Industrial relations,
  • Published on: 07 Deireadh Fómhair 2010



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Estonia
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Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The issue of posted workers is not well-covered in Estonia. The information on the number of posted workers is only partly available and the social partners have paid only limited attention to this. The posted workers Directive is implemented in the Estonian legislation, though the monitoring system set up is passive in identifying cases of deviation from regulations. A need for a special research on the working conditions of posted workers is evident as there is currently no information available.

QUESTIONNAIRE

1. Posted workers: basic facts

1.1 Please provide basic data on the workers posted in your country:

It is not mandatory to declare workers posted in Estonia. Migration data is only collected on aggregate level (i.e. registration of residence permits for working purposes), which does not differentiate posted workers. Therefore, the information regarding workers posted in Estonia is not available and there is no research undertaken due to the lack of data.

a) number (by gender);

No information is available.

b) distribution across sectors

No information is available.

1.2 Are there any information on the number (by gender) and distribution across sectors of workers posted to other countries by domestic companies? If yes, please provide details.

Data is collected through the distribution of the application E101 by the Social Insurance Board (Sotsiaalkindlustusamet), which confirms to host EU/EEA Member States authorities that contributions continue to be paid in the home State and, prevents from paying contributions to the host State Social Security scheme. However, it should be kept in mind that this data is limited in terms of countries covered (i.e. workers posted to third countries, e.g. to United States, are not covered). By sectoral distribution, data is available for years 2005-2007; data is collected by gender only in 2006.




Table 1. Distribution of forms E101 issued by years and sectors
Most forms have been issued in industry, followed by service and the primary sectors

Year/Sector

2005

2006

2007

Agriculture, hunting and fishing

178

269

407

Industry

5177

6859

8614

Service

563

1012

840

Source: Social Insurance Board

It should be noted that the majority of applications in the industrial sector involves construction (in 2005 83%; in 2006 76%; in 2007 72%) and an increasing part of the service sector involves real estate (in 2005-26%; in 2006-35%; in 2007-38%).

By gender, information is only available for the year 2006 when the total number of forms E101 issued was 8,140 of which 7,355 (90%) were issued for male workers and 785 (10%) for women.

1.3 Are there any information on trade union affiliation and collective bargaining coverage of workers posted to your countries, including affiliation to foreign unions and coverage by foreign collective agreements, in addition and beyond the minimum requirements set by legislation? If yes, please provide details.

There is no information on trade union affiliation and collective bargaining coverage of workers posted to Estonia as there is no information collected on this specific group of workers.

1.4 Are there any information on trade union affiliation and collective bargaining coverage of workers posted to other countries by domestic firms? If yes, please provide details.

There is no information available on trade union affiliation and collective bargaining coverage of workers posted to other countries. In general, both indicators are expected to be very low, as trade union membership remained on average at 7.6% in 2007 according to the calculations of the Ministry of Social Affairs (Sotsiaalministeerium) and collective bargaining coverage reached 25% according to latest information available from 2005 (Working Life Barometer Survey).

1.5 Please refer the main content and results of major studies on posted workers (either in-coming or out-going), both quantitative and qualitative, which have been carried out in your country.

No studies on posted workers have been conducted in Estonia.

2. Regulation on posted workers

2.1 Please provide details on the current legislative framework for posted workers in your country:

a) Reference to the law adopting the posted workers directive: number, date, and link to the text, if available, in English;

The law adopting the posted workers directive is called: the Working Conditions of Workers Posted in Estonia Act, which took effect on 1 May 2004 (adopted on 17 March 2004). The text is originally published in Riigi Teataja – the official publication of Estonia (available in Estonian at: http://www.riigiteataja.ee/ert/act.jsp?id=727124). English translation is available at: http://www.legaltext.ee/text/en/X80033.htm

b) A brief account of any amendments or integrations introduced after the initial adoption;

Amendments have not been made to the Working Conditions of Workers Posted in Estonia Act after the initial adoption in 2004.

c) A description of the current legal framework regarding posted workers, especially:

- as regards the way employment conditions are enforced, as required by art. 3.1. of the Directive (see the briefing note for the text of the article):

i. by law, regulation or administrative provision, and/or

ii. by collective agreements or arbitration awards which have been declared universally applicable;

The legal framework regarding posted workers is set by law – the Working Conditions of Workers Posted in Estonia Act. There is no universal collective agreement applicable specifically to posted workers. In terms of minimum wages, the national minimum wage agreement is applicable to all workers, including posted workers (unless they have more favourable conditions in their country of origin) (see also EE0712019I).

- whether the law requires the application to posted workers of:

i. the whole system of labour law or only minimum terms expressly identified with reference to the list in art. 3.1 (see the briefing note for the text of the article).

According to the Working Conditions of Workers Posted in Estonia Act, only minimum terms expressly identified in the directive are applied to posted workers. In case the defined working conditions are more favourable in the person's country of origin, then the latter are applied (except the occupational health and safety conditions which are applied in all cases based on the Estonian respective legislation). It has been said by the authors of the law applied to posted workers, that not applying the whole system of labour law that is applicable to Estonian workers is important as this could hinder the foreign company's freedom of provision of services.

ii. the whole content of collective agreements or arbitration awards which have been declared universally applicable or only minimum terms expressly identified with reference to the list in art. 3.1 (see the briefing note for the text of the article).

The content of collective agreements declared universally applicable is applied to posted workers as well, unless they have more favourable conditions in their country of origin.

- when the employment conditions are set by collective agreements or arbitration awards, please specify which is the legal instrument which make them universally applicable:

i. according to the law. Please specify the law reference number and year and whether it includes certain requirements for universal application. In this latter case, please specify such requirements.

ii. according to a ministerial decree. Please specify which minister or political authority can issue the decree and whether certain requirements are needed. In this latter case, please specify such requirements.

iii. according to rules on mandatory representation which make collective agreements (in practice) universally applicable.

The only working conditions applicable to posted workers, which is set by universally applicable collective agreement in Estonia, is the minimum wage level. According to the Collective Agreements Act, declaring collective agreements universally applicable is agreed by the bargaining parties. In case this is agreed, the Minister of Social Affairs will publish the announcement officially in Ametlikud Teadaanded. Only wage and working and rest time conditions can be universally applicable. There are no specific requirements of representation on any other conditions applicable to universally extendable collective agreements. For more information on problems with extending collective agreements, see EE0905039I.

- when the employment conditions are set by collective agreements, please specify which collective agreements are relevant:

i. intersectoral or sectoral. Please provide examples.

ii. national or territorial. Please provide examples.

In terms of posted workers, only the national level minimum wage agreement is relevant (see also EE0712019I). This is not applied in case the minimum wage conditions in the person's country of origin are more favourable.

d) Whether the legal framework sets a maximum period for considering a worker a “posted worker” rather than a “resident worker”. If yes, please specify this maximum period.

According to the Working Conditions of Workers Posted in Estonia Act, the definition of posted worker is a person who usually works in a foreign country on the basis of an employment contract, and whose employer has posted her/him to work in Estonia for a certain period, in the framework of the provision of services. Although it is required that the period should be fixed, the maximum time period is not specified.

e) whether there are special rules for certain sectors (for instance, construction). If yes, please specify the sectors and briefly illustrate such special rules.

No special rules for certain sectors have been implemented.

2.2 Monitoring of implementation of regulation

a) whether a monitoring system for collected data and information on the number and employment conditions of posted workers was set up. If yes, please provide details on such system (bodies involved, structure, methods of collection and dissemination of information, etc.) and its effectiveness;

As there is no data collected on the workers posted to Estonia, there is no monitoring system set up. As for workers posted to other countries, information on the number of such workers is collected by the Social Insurance Board – every employer, who wishes to post their workers to EEA countries, will have to apply for the form E101 per every employee. This data does not cover the working conditions of those posted to other countries.

According to the Working Conditions of Workers Posted in Estonia Act, the state supervision over compliance with the requirements of this act, including the employment conditions, is exercised by the Labour Inspectorate (Tööinspektsioon). However, according to the Labour Inspectorate, supervision over employment conditions of workers posted in Estonia is complaint-based, which means that a posted worker should file a complaint if one feels its rights have been violated. So far no complaints have been made.

To make the monitoring of working conditions more effective across countries as well, the Estonian Labour Inspectorate has established a cooperation agreement with the labour inspectorate of Norway for mutual cooperation and information sharing, but according to the Estonian Labour Inspectorate, there has not been any direct need to share information yet.

Thus, it may be concluded that even though a monitoring system has been formally established regarding the working conditions of posted workers and some measures have been taken (e.g. the cooperation agreement), there have been no results of these activities yet. At the same time, there is also no information to assess whether or to what extent the working conditions of posted workers have been violated in Estonia. Therefore, there is not enough information to assess the effectiveness of the monitoring system set up in Estonia.

b) whether measures were introduced to make the information on the terms and conditions of employment generally available to foreign service providers and to the posted workers concerned.

According to the Working Conditions of Workers Posted in Estonia Act, the Labour Inspectorate is responsible for making information available and answering reasoned requests for information concerning acts, other legislation and extended collective agreements that apply to posted workers. The Labour Inspectorate should also answer reasoned requests for information concerning sole proprietors and legal persons that serve as employment intermediates, and also concerning instances in which they have violated legislation or undertaken illegal international activities. In terms of information sharing, the Labour Inspectorate has the responsibility to cooperate with the respective institutions of the EU/EEA Member States. Thus, the Labour Inspectorate does not take initiative to make the information on the terms and conditions of employment generally available. But in case the interested parties turn to the Labour Inspectorate, the required information must be made available. In addition, some information is disseminated through the English language web page of the Labour Inspectorate (see: http://www.ti.ee/index.php?page=541&).

c) whether the law envisages the implementation of special labour inspections devoted to verify the number and employment conditions of posted workers. If yes, please provide details on how these are organised and on their effectiveness and outcomes.

Upon drafting the Working Conditions of Workers Posted in Estonia Act, the Labour Inspectorate was to create an additional position for work involving posted workers. However, currently there is still no special position especially devoted to verify the employment conditions of posted workers.

2.3 Please specify if particular rules have been devised to deal with specific situations of posted workers:

a) the current rules for the posting of temporary agency workers in your country, especially whether the law requires the application to temporary agency workers of:

In terms of posted temporary agency workers, the same working conditions as applicable to all posted workers apply (see also 2.1 (c) above). There are currently no special regulations regarding temporary agency work in Estonia - this is a legally unregulated area and this means that agencies primarily follow the general employment laws, such as the Employment Contracts Act and when involving posted workers- the Working Conditions of Workers Posted in Estonia Act. In the new Employment Contracts Act the definition of temporary agency worker is provided, but no further regulations will be introduced (for more information on problems with temporary agency work in Estonia, see EE0807019Q).

b) the current rules for employment conditions in public procurement

In Estonia, there are no specific terms and conditions of employment explicitly required to be awarded public procurement contracts. The Government Procurement Agreement has established general rules for employment conditions by stating that the supplier has to treat all persons, who are living or are located in Estonia or in some other European Union state, EEA contract state or from a state that has joined the WTO government procurement agreement, equally and non-discriminatively and monitors that all restrictions and criteria set out for persons are proportional, relevant and accountable with regard to the purpose of the government procurement agreement.

This also applies to collective agreements – there is no requirement to sign a collective agreement to be awarded public procurement contracts. In Estonia this is probably partly explained by the low collective agreement coverage - just 25% according to 2005 data (according to the Working Life Barometer 2005). Moreover, most of the collective agreements concluded are at enterprise level – only two sectoral collective agreements have been concluded (in health care and transportation). The Public Procurement Act does not include specific clauses on posted workers.

3. Positions and actions of the social partners and government on posted workers

3.1 Please indicate the positions and main initiatives that the social partners and the government have taken with reference to posted workers, either in-coming or out-going, and especially indicate:

a) the presence of a debate on the relevance and consequences for national labour law and industrial relations institutions of recourse to posted workers. If such debate is present, please refer its main contents and whether it refers to specific sectors.

No such debate between social partners could be observed.

b) any positions expressed or actions taken in view of the recent rulings by the European Court of Justice (cases Laval un Partneri - C-341/05, Rüffert - C-346/06, Commission v Luxembourg – C-319-06).

In the case of Laval un Partneri - C-341/05, the Estonian Trade Union Confederation (Eesti Ametiühingute Keskliit, EAKL) urged the Estonian government to support the trade union on this matter. They addressed a written request to the Prime Minister, Mr Andrus Ansip. EAKL declared that when operating in a foreign country, the local legislation and practices should be followed – in case of posted workers, the wage conditions of the destination country should be applied. According to EAKL, the point of the posted workers' Directive is to protect posted workers from unequal treatment and exclude social dumping in the destination countries of posted workers. In their declaration, EAKL supported the Swedish trade unions and found that the actions undertaken were justified as according to the Directive on posted workers, working conditions that are more favourable to the worker should be applied – in this case the Swedish wage conditions. As in Sweden, the Directive is applied with collective agreements, the collective actions were also necessary to urge the Latvian company to conclude the collective agreement, which would exclude social dumping and unequal treatments compared to local companies.

The reaction of the government on this matter is unknown as according to the State Chancellery (Riigikantselei), the government statements on the national transposition of the EU labour and social regulations are imposed with a five-year restriction on access. EAKL did not get any response to their request about the standpoints of the government.

3.2. The main campaigns or initiatives undertaken by the social partners specifically aimed at posted workers or firms posting workers. If such campaigns or initiatives are present, please indicate their main features and whether they refer to specific sectors. Please cover, in particular:

a) Trade union initiatives with regard to:

Public campaigns

In the so-called Vaxholm case (Laval un Partneri- C-341/05), trade unions declared their positions in the media to gain attention and encourage the government to support the Swedish trade unions. Still, the final position of the government on this matter has not been made public. There have been no other public campaigns on the matter of posted workers.

Specific initiatives to recruit posted workers as trade union members

There is no information on such initiatives.

Cross border activities and cooperation with foreign trade unions

For the Vaxholm case, there was a strong cooperation with foreign trade unions in order to support Swedish trade unions. Nevertheless, there are cooperation activities with other trade unions and in other situations as well, which also include monitoring working conditions in order to prevent social dumping (also in the case of the activities of international companies – see also EE0904049Q).

Political lobbying

In the Vaxholm case, trade unions tried to encourage the government to support Swedish trade unions, but there is no information on the actual result. No other cases of political lobbying could be observed.

b) Employers initiatives with regard to:

Public campaigns

There is no information on such initiatives – employer organisations have not turned their attention to posted workers issues. For example, upon drafting the Working Conditions of Workers Posted in Estonia Act, the Estonian Employers' Confederation (Eesti Tööandjate Keskliit, ETK) approved the draft act without comments, while the trade unions had quite a few comments to improve the draft.

c) Any kinds of joint action undertaken by the social partners with regard to the issue of posted workers

No joint action could be observed.

4. Collective disputes and case law on posted workers

4.1 Please indicate whether collective disputes involving posted workers are frequent or increasing in recent times.

There is no information on collective disputes involving posted workers.

4.2. Please provide information on any major collective disputes which concerned the utilisation of posted workers in your country.

Not available.

4.3 Please provide information of existing case law in your country involving posted workers.

There is no existing case law regarding posted workers - it is not a widespread practice in Estonia.

Commentary

In Estonia, the issues related to posted workers have not been very prominent in the social partners’ agenda. The issue has received more attention during the drafting of the legislation adapting the posted workers Directive to the national legislation and during the Vaxholm case. The main problem is that there is no information collected on the number or working conditions of workers posted to Estonia. There is some information on the number of workers posted to other countries by domestic companies, but still the information on their working conditions is lacking. Thus, there is no information to assess to what extent the posted workers Directive has been implemented in practice. To have more information on the conditions of posted workers in Estonia, a thorough research is needed. In addition, more active measures from the Labour Inspectorate could help to indentify cases where rights of posted workers have not been respected.

Liina Osila, Kirsti Nurmela, PRAXIS Center for Policy Studies

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