Estonia: latest working life developments Q2 2018

The ending of Estonia’s longest ever strike, the re-establishment of tripartite social dialogue, and changes in legislation to tackle the gender pay gap are the topics of interest in this article. This country update reports on the latest developments in working life in Estonia in the second quarter of 2018.

Estonia’s longest ever strike ends

During the second quarter of 2018, the longest strike in Estonia since the beginning of the 1990s ended after months of negotiations. The dispute began in October 2017, when workers at meat production company HKScan Estonia AS demanded a pay rise, created a trade union and turned to the National Conciliator. When their demands were not met, the workers continued to demonstrate and launched an official strike at the beginning of February 2018.

HKScan Estonia AS claimed that it needed time to reorganise its remuneration system, while the workers believed their employer was being uncooperative. The strike lasted for three months and ended on 16 April 2018 with the requested pay rise. However, further discussions are on the cards as the workers are demanding that HKScan Estonia AS recognises and accepts their trade union as a partner on paper, so that the future negotiations can proceed more smoothly.

Tripartite social dialogue resumes after 16 years

In May 2018, the Estonian government and social partners re-established tripartite social dialogue by meeting to discuss topics related to labour and social policy. The last time such a meeting took place was more than a decade ago in 2002. The Estonian Trade Union Confederation (EAKL), the Estonian Employers’ Confederation (ETTK), the Prime Minister, the Minister of Health and Labour, and the Minister of the Interior participated in the event. The purpose of the meeting was to discuss topics of particular importance to each side, such as the development of workplace democracy and issues related to social tax and a foreign workforce. It was agreed that these meetings should take place several times a year, with the next meeting scheduled for September 2018.

Government plans to reduce the gender pay gap

Estonia has the highest gender pay gap among the EU Member States, standing at 25.3% in 2016. In order to reduce this gap, a number of changes have been proposed to the Gender Equality Act. These changes were sent to the government for approval in April 2018 and are expected to enter into force on 1 July 2020. They include the following:

  • All employers will be obliged to collect gender-based data so that it will be possible to assess gender differences in the remuneration system.
  • The Labour Inspectorate will be authorised to monitor the remuneration and benefits paid by employers to men and women for equal work.
  • A digital tool called the ‘Pay Gap Speedometer’ will be created for use in the public sector. This tool will allow the Labour Inspectorate to conduct an initial inspection based on data that organisations have already provided through the employment register (on occupations, gender, etc.). If the Inspectorate discovers potential discrimination cases, it will be allowed to ask the organisations involved to conduct an equal pay audit and develop an action plan to address the gender pay gap.

Initially, the Labour Inspectorate's supervision and the Pay Gap Speedometer were going to be introduced in the private sector as well. However, employers claimed that this would cause an undue administrative burden and so their use will only be obligatory within the public sector. Private sector companies will be allowed to use the digital tool, but no supervision based on the results will be carried out.

Commentary

Foreseen developments in the second half of 2018 include approval of a pension reform that aims to provide a more sustainable and flexible pensions system in the future. The second phase of the parental leave reform is also expected to take place, aimed at improving the flexibility of the system and increasing the participation of fathers in family life. Finally, national-level social partners have commenced negotiations over the 2019 national minimum wage and an agreement is anticipated in September 2018.

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