Social dialogue in the candidate countries

Social dialogue and EMU in Cyprus, Czech Republic, Latvia, Lithuania and Slovakia - Workshop

Vienna, 26-28 May 2003

Speech abstract - Eike Hindov
Head of the Labour Relations Bureau, Ministry of Social Affaires, Estonia

Social dialogue and EMU in Estonia

Social Dialogue

Pursuant to the European social model, social partners have a significant role in solving employment problems. Since 1992 social dialogue in Estonia has been conducted also between employees, representative organisations of employers and representatives of the Government. Agreements have been concluded on the issues of minimum wage and the amount of minimum income exempt from tax. Also two tripartite agreements have been signed on the preparation of the social programme and its implementation for organising retraining for employees in enterprises partially in state ownership that are in the process of reorganisation.

Social partners have been involved in carrying out vocational education reform. In December 2000, Ministries of Education, Economic Affairs and Social Affairs, employers' and employees' federations and representatives of the Chamber of Commerce and Industry signed a collaboration agreement for 2001-2004, the wider objective of which was to ensure the supply of skilled labour and its suitability to labour market demands.

On January 18, 2002, the Estonian Employers' Confederation, the Estonian Confederation of Trade Unions and the Government of the Republic signed a labour market policy agreement for 2002. The objective of the agreement was to include different labour market parties in solving employment and unemployment related problems. The agreement specifies the measures to be implemented by and expenditures of all three parties for 2002 to solve the aforementioned problems. The measures implemented on the initiative of the Government are mostly financed from the state budget but, if necessary, it is possible to apply for additional financing from the Privatisation Reserve Fund of the Government of the Republic.

The tripartite cooperation advances the development of tripartite employment councils. In case of lay-offs more attention is to be paid to the preparation of social plans; and principles for functioning and financing of additional and re-training will be elaborated. The Estonian Employers' Confederation and the Estonian Confederation of Trade Unions will, pursuant to the agreement, actively participate in the preparation of the Employment Action Plan for 2003 and will initiate additional employment projects.

However, an agreement outlining the obligations of the three parties is planned to be prepared for 2003, and in the long-term the parties find it necessary that joint labour market policy targets and trends, covering several years, prescribed in agreements should be concluded following the European social model. In the future it is necessary to pay more attention to the bipartite social dialogue at the enterprise and sectoral level in order to increase the importance of collective agreements and make work organisation more flexible.

The implemented actions involving social partners are described under two main guidelines:

  • regional and local action for employment
  • modernising work organization


A decrease in the employment rate and the rapid growth of unemployment accelerated after 1997, when the Estonian economy experienced severe setbacks. Risk groups in the Estonian labour market are defined as comprising the youth in the age group 16-24, the disabled, the long-term unemployed, mothers with small children, job-seekers who have lost their qualification, people at pre-pension age and non-Estonian. Unemployment growth has been especially rapid among young people, and the number of people who have been out of work for more than one year has risen. The unemployment rate among the youth has been rising and the danger of remaining unemployed after finishing school is increasing. In 2001, the unemployment rate of the young was recorded at 22.2%, the corresponding figure in the EU being 16.7%. In order to alleviate the seriousness of the problem, an increase in the share of active and preventive employment measures is planned, the aim of which is to assist the youth in integrating into the labour market and to enhance their adaptive capacity.

What are the specific actions?

  • Planning education, especially vocational education. It would help to identify the needs of the students earlier to forestall potential risks and overcome already existing problems. The objective is to guarantee a qualified workforce and its correspondence to labour market demands.
  • In the framework of the PHARE 2001 project 'Promoting the employment of the youth', the aim of which is to enhance employment of the youth, active measures to better integrate the young in the labour market in Ida-Virumaa, Southeast Estonia and islands will be developed and implemented.
  • A study 'Adaptation of the youth in the labour market and factors influencing it' will be conducted. The objective of the study is to:
    • analyse the adaptation capability of the youth in the labour market
    • obtain an overview of the factors having impact on professional success or failure
    • identify the issues of the groups of young people with a higher risk to remain unemployed
    • find ways to reduce unemployment among the youth.

    As a result of the survey, recommendations to implement labour market policy measures will be suggested to enhance the competitiveness of the youth labour market.

  • To assist the long-term unemployed without special skills or work experience (among the long-term unemployed the percentage of young people is very high) in finding employment, a new employment measure - work practice - will be developed and piloted.

Who is responsible?

Action plans are prepared in cooperation with social partners and institutions responsible for the implementations of the programs. These institutions are the Ministry of Social Affairs, Labour Market Board, Employment offices, Ministry of Education, Ministry of Economic Affairs, local governments, social partners and non-profit organisations.

Some projects (development of vocational education system, active employment measures, etc) have already been implemented for several years; some pilot projects commenced in 2002.

Financing for the different projects comes from the following sources: the national budget, bilateral cooperation projects, funding by PHARE, and the Privatisation Reserve Fund (out-of-budget Government fund).

Eike Hindov holds a BA in Human Geography, University of Tartu. She worked as Research Fellow on Demography and Social Development in the Institute of Economics, Estonian Academy of Sciences and was Assistant to the Minister, at the Labour Ministry of the Republic of Estonia in 1991. She was a team member of the study: Estonia and Finland, The Research Institute of the Finnish Economy, Helsinki 1993. She was Head of the ILO Bureau in the Ministry of Social Affairs and National Correspondent of the ILO in 1994. Since January 2002 Eike Hindov is Head of the Labour Relations Bureau, Ministry of Social Affaires. Eike holds a National Science Prize for Social Research (1994).

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