Labour dispute resolution process examined

Since the early 1990s. Estonia has created a system for the resolution of individual and collective labour disputes, involving labour dispute commissions, local conciliators, a public conciliator and the courts. This article examines the institutional and legislative framework for dispute resolution and looks at the use actually made of these procedures.

In Estonia, the main institutions dealing with individual and collective labour disputes are labour dispute commissions, local conciliators and the public conciliator, as well as the courts.

  • Labour dispute commissions are extra-judicial independent individual labour dispute resolution bodies, which are established within local labour inspectorates and which seek to resolve disagreements between employees and employers in cases where the parties cannot arrive at a mutual peaceful agreement. In total, there are 15 county labour dispute commissions. The labour dispute commission consists of a chair (an employee of the local labour inspectorate) and an equal number of representatives of employees and employers.
  • The public conciliator and local conciliators have the responsibility to conciliate between parties during a labour dispute. The public conciliator is appointed for three years by the government on the basis of a joint agreement between the Ministry of Social Affairs and central federations of employers (EE0310102F) and trade unions (EE0308101F), and this institution has been in operation since the second half of 1995. The public conciliator appoints local conciliators for the resolution of a labour dispute in prior coordination with the local government authorities. Individual as well as collective labour disputes at enterprise level are resolved primarily by the local conciliators, while labour disputes between federations of employers and unions are resolved by the public conciliator.
  • Individual and collective labour disputes may also be resolved by the courts. Estonia has a three-tier court system: rural and city courts; district courts; and the state court (which functions as a supreme court).

The institutions dealing with individual and collective labour disputes in relating to conflicts of 'interest' (TN0301101S) are the labour dispute commissions and the local and public conciliators. In the case of conflicts of 'right', the main institutions are the labour dispute commissions and courts.

Legislative background

The main legal acts dealing with conflict resolution are the Individual Labour Dispute Resolution Act and Collective Labour Dispute Resolution Act. There are some other acts which are concerned with certain aspects of the resolution of labour disputes, such as the Employment Contracts Act and Public Service Act.

  • The Individual Labour Dispute Resolution Act (which entered into force in September 1996) provides the procedure and conditions for the resolution of individual labour disputes between employees and employers. If possible, a disagreement arising from the employment relationship is resolved by agreement between the employee and employer through the mediation of an employee representative or the directing body of a trade union or federation of unions. Parties have the right of recourse to a labour dispute resolution body without mediation if they find that a labour dispute cannot be resolved by agreement. There are time limits applied, during which appeals may be made to the labour dispute bodies. In general the limit is four months, but in cases of disputes over the correctness of termination of an employment contract, it is one month.
  • The Collective Labour Dispute Resolution Act (which entered into force in June 1993) regulates the procedures for the resolution of collective labour disputes and the calling and organisation of strikes and lock-outs. A collective labour dispute is defined as a disagreement between an employer or an association of employers and employees or a union of employees which arises from entry into, or performance of, collective agreements or the establishment of new working conditions (EE0309102F). The parties shall consult the public conciliator in writing if an agreement is not reached through negotiations and the threat of a disruption of work arises.

Conciliation process

The only legally regulated method for conflict resolution in Estonia is conciliation. At enterprise level, a shop steward can be involved in a mediation process, but usually conflicts are resolved in labour dispute commissions. The activity of conciliators is based on the Collective Labour Dispute Resolution Act and Collective Labour Dispute Conciliation Statute.

The duty of a conciliator is to effect conciliation between the parties. A conciliator should identify the reasons for and circumstances of a labour dispute and propose resolutions. Conciliators have the right to invite the parties to participate in conciliation proceedings, and to engage qualified persons or experts and competent officials in their work. Conciliation is effected through the mediation of a conciliator or on the basis of a proposal made by a conciliator. The parties must reply to the proposal made by a conciliator within three days. Parties are required to participate in conciliation proceedings, send their fully authorised representatives to participate in the conciliation proceedings and submit documents necessary for the substantive resolution of the matter by the date specified by the conciliator. The conciliation process is documented by a report, which should be signed by the representatives of the parties and the conciliator. A conciliation outcome contained in a signed report is binding on the parties and enters into force upon signature, unless a different date is agreed on. The report should also be prepared in those cases where no agreement is reached.

Resolution of labour disputes

Individual labour disputes

Since 1996, when the labour dispute commissions were established, most individual labour disputes have been resolved in these commissions. The total number of court cases is much smaller than the total number of cases in labour dispute commissions: over 1998-2001, there were on average 607 court cases a year regarding employment contracts, while the average number of cases before labour dispute commissions was 3,200 a year over 2000-2. This is as intended, as the resolution of disputes in labour dispute commissions is meant to take precedence over their resolution in the court.

According to a study conducted by J Masso of the University of Tartu, 0.58 cases were submitted to commissions per 100 employees in 2001 and workers won quite a high percentage of cases - in 82% of cases their demands were satisfied. There are no statistics available regarding whether law suits have been decided in favour of the employee or employer. However, 62% of court cases were resolved in favour of the claimant, and it is assumed that the employees made the claims in most cases.

Collective labour disputes

During the eight years since the establishment of the public conciliator, there have been more than 260 cases referred to the public conciliator. The applicants have mainly been representatives of employees and representatives of trade unions. In recent years, representatives of employers have been tending more often to refer cases to the public conciliator. Most disagreements are induced by employees' dissatisfaction with payment conditions (50% of the cases). In 30% of cases, the source of the labour dispute has been collective agreements, while labour legislation accounts for 8% of cases, working conditions for 7% and 'social guarantees' for 5%.

  • In labour disputes over wages, in most cases workers are not agreed with the amount of wages or with the established level of minimum wage. Also problematic are the conditions of payment of extra remuneration and the share of bonuses (extra remuneration) in the total wage. In their demands, the representatives of employees present the following main arguments: the work is valued too lowly; the wage is too low to secure normal living conditions; inflation is too high; and wages are greatly lower than in the current European Union Member States. Another source of dissatisfaction is high variability in wage levels in comparable jobs.
  • With regard to cases related to collective agreements, the main problems include: employers that are not interested in concluding collective agreements and delay negotiations; problems with the implementation of agreements; failure to observe pay conditions; or differing interpretation of clauses in agreements (especially in cases when the ownership of enterprises changes).

According to statistics from the public conciliator's office, 24 applications were presented to the public conciliator to resolve collective labour disputes in 2001. In total, these labour disputes covered around 18,000 people. In 18 cases, conciliation led to positive results, while in two cases the right to strike was awarded. In 2002, 17 collective labour disputes were registered, and according to estimates 31,000 employees were involved in these disputes. Positive solutions were found in 12 cases. In 2003, 12 labour disputes were registered. Most disputes over wages and collective agreements referred to the conciliator end with a positive result. According to the public conciliator's office, agreement is achieved in 80% of all cases. Only in some cases have representatives of employees been given the right to organise a strike. However, there were only rare cases of warning strikes and other protest actions in Estonia over the period 1992-2002. The first strike was held only at the end of 2003, when the Estonian Employees’ Unions’ Confederation (Eesti Teenistujate Ametiliitude Keskorganisatsioon, TALO) and the government did not reach agreement over public sector wage policy (EE0311103F and EE0312103F).

Commentary

In Estonia, various laws concerning labour relations have been adopted and amended over the transition period and various institutions dealing with labour relations have been established. The main problem in labour dispute resolution appears to be that Estonia has special legal procedures and institutions only in the case of conflicts of 'interest'. There are no special arrangements for conflicts of right, as there are in many other countries in Europe (labour courts etc). Conflicts of interest are resolved by the regular court system in Estonia. This is a time-consuming and very bureaucratic process. In future, Estonia needs special legal arrangements in this area.

The main reason for the relatively peaceful labour relations in Estonia has been the fact that employees' position is still relatively weak. Union density and collective bargaining coverage rate are both very low. Due to this fact, trade unions do not have enough financial resources and therefore cannot afford to hold strikes. Furthermore, the administrative capacity of unions to organise strikes is low. (Kaia Philips and Raul Eamets, University of Tartu)

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