EMCC European Monitoring Centre on Change

Eesti Energia

Company/Organisation:
Eesti Energia

Geographic Location

Country: Estonia
Region: Kirde-Eesti; Eesti
Location of affected unit(s): Ida-Virumaa

Company

Sector: Utilities
Electricity, gas, steam and air conditioning supply
35 - Electricity, gas, steam and air conditioning supply
Number Employed: 3512
Group: Eesti Energia

Employment Effects

Announcement Date: 03-09-2019
Planned Job Reductions min: 324
Planned Job Reductions max: 324
Type of Restructuring: Internal restructuring
Employment Effect Start: 03-09-2019
Foreseen End Date: 31-12-2019
Direct Dismissals: 324

Additional Information

Eesti Energia, a state-owned Estonian international energy company responsible for mining oil shale, producing and distributing electricity, oil and heat and electricity, and gas sales, announced that it will dismiss 324 employees by the end of 2019. Managers, specialists and skilled workers of three subsidaries of Eesti Energia will be affected: Enefit EnergiatootmineS (electricity production), Enefit Solutions (maintenance and repair of machinery and equipment), and Enefit Kaevandused (mining of oil shale). 

The reason behind the job reduction is a considerable increase in prices of carbon emission quotas, and EU carbon dioxide emissions fees-exempt Russian and Belarusian electricity flooding the market. This has resulted in a slump in Estonian electricity production. During summer, it was expected that in this situation 450-500 employees would have been dismissed. However, due to the Estonian government stressing the importance of maintaining Estonia's energy independence and a desire to protect jobs as far as possible, it was possible to reduce the number of dismissals. 

The Estonian Unemployment Insurance Fund (EUIF) is prepared to offer the support needed by the employees in the framework of their response service to collective redundancy. This includes retraining, as the region has plenty of vacancies, although with lower wage level, but most of them require specific skills. In addition, a fund of €2.5 million will be created by Eesti Energia to support the dismissed persons. Workers who are still unemployed after the end of the unemployment insurance benefit payments and who have less than five years until their retirement age, have been offered a company pension (€365 per month) paid by Eesti Energia (the average wage of the miners in the region is €1,600, the national average wage is around €1,200 and the minimum wage is €540). Some employees will be offered a mining re-training grant paid by Eesti Energia (€440 per month).