Estonia: EIRO CAR on “The effect of the Information and Consultation Directive on Industrial Relations in the EU Member States five years after its transposition"

  • Observatory: EurWORK
  • Topic:
  • Participation at work,
  • Labour and social regulation,
  • Industrial relations,
  • Published on: 18 January 2011



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The Information and Consultation Directive was introduced into Estonian legislation in 2007 with the adoption of a new act. After three years, it is still difficult to assess the extent to which I&C practices have been implemented at company level due to the lack of respective data. However, the importance of I&C has been pointed out by both trade unions and employers. An important issue with I&C is the enforcement of legislation governing I&C procedures.

Question 1: Trends in the incidence of undertaking- and/or establishment-level information and consultation bodies

(a) Using official statistics where possible, please provide annual data for the years 2005-2009 (inclusive) on the number and proportion (%) of undertakings and/or establishments which have an information and consultation (I&C) body or equivalent.

There have not been many company surveys analysing the presence of I&C bodies. The European Company Survey analysed the presence of different employee representation bodies, although the available data does not distinguish between different forms of employee representation (i.e. trade union, employee trustee, works council, health and safety representatives). Furthermore, the definition of the vehicle for the I&C rights guaranteed by the Directive are not as clear-cut in Estonian legislation. Namely, the main body for I&C is employee elected representatives (i.e. employee trustees) and/or trade union representatives. However, in case there is not one present, employers are obliged to inform and consult their workers directly (EE0710029Q). Thus, the presence of employee representatives in companies alone does not reflect the extent of I&C practices implemented.

However, according to the European Company Survey 2009, most companies do consult their employees before important changes - more than 80% in case of changes in the remuneration system, organisation of the work process and working time arrangements. Prior to introducing restructuring measures, the chare of companies consulting their employees is somewhat lower – 68%.

(b) Where possible, please provide data to show trends in the uptake of I&C bodies by:

  1. size of undertakings/establishments in terms of employment levels (i.e. under 50 employees, 50-99 employees, 100-199 employees; 200-499 employees, 500 or more employees or other appropriate size bands used in national statistics)
  2. sector (broadly defined, i.e. industry/manufacturing, private services, public services).

There is no data available on the uptake of I&C bodies.

However, to give an overview of the use of consultation practices in different companies, some data from the European Company Survey 2009 can be used. In 2009, prior to changes in remuneration system, the share of small (less than 50 employees) and medium-sized (50-249 employees) companies not consulting their employees is higher compared to large (more than 250 employees) companies (18%, 17% and 9% respectively). In all other aspects (i.e. working time arrangements, work organisation process and restructuring) the share of large companies is higher (by 38 percentage points (pp), 9 pp and 6 pp respectively). In terms of broad sectors, the share of companies not consulting their employees is considerably higher in industry (an exception is consultation before restructuring measures where the share of companies not consulting their employees is equal in industry and services – 29%).

(c) Please provide information on the extent of I&C arrangements in:

  1. smaller undertakings (those with fewer than 50 employees)
  2. public administration.

As indicated in point b above, in small undertakings, not consulting employees prior to changes in remuneration system is more common compared to larger companies. In other aspects of working life, the share of small undertakings not consulting their employees is considerably lower compared to large companies (almost equal to medium-sized companies). There is no information on the take up of I&C bodies.

There is no data available on public administration in terms of I&C arrangements. At the same time, regulations of I&C are not applicable to the public sector. Thus, most probably I&C bodies are often not elected in public administration.

(d) What factors explain any increase/decrease in the incidence of I&C bodies (e.g. economic climate, legislative change, other)?

There is no information available on the trends in the incidence of I&C bodies. It might be expected that during 2005-2009 the share of companies having I&C bodies has been increased, especially after 2007 when the law regulating implementation of I&C practices in companies was put into force (EE0701039I).

Question 2: Procedures for establishing I&C bodies

(a) What are the procedures for establishing I&C bodies in your country? For example, are I&C bodies mandatory (i.e. employers are obliged by law to establish them), or is their establishment dependent on employees/trade unions triggering statutory procedures? In the latter case, who can initiate the procedure? Is there a specified level of employee support required?

While I&C procedures are mandatory for all employers with more than 30 employees, the presence of I&C bodies is not mandatory. Election of an employee trustee may be initiated by either a trade union, majority of trade union members in the company (in case a trade union is not formed in a single company) or at least 10% of employees in the company. Election of an employee trustee takes place at the general meeting of workers in the company. At least half of the workers in the company must take part in order for the election to be valid. Also, trade union representatives in the company can act as I&C bodies (election of a trade union representative in the company can be triggered by trade union members).

At the same time, in case there is no employee representatives elected in the company, employers are still obliged to implement I&C procedures.

(b) Please supply any available data on the extent to which I&C bodies have been:

  1. requested by employees
  2. requested by trade unions
  3. initiated unilaterally by employers.

There is no such information collected in Estonia.

(c) Have the national government and/or the social partners in your country actively promoted the establishment of I&C bodies? If so, how have they done this?

The Estonian Trade Union Confederation supports strongly the implementation of I&C procedures in the company prior to important decisions affecting employees, especially upon restructuring or reorganisation of work (Action plan of the Estonian Trade Union Confederation 2008-2011). Prior to the implementation of the Employee Trustee Act, trade unions actively defended the right of trade union representatives to take part in I&C procedures.

There has been no support by employer organisations for the establishment of I&C bodies. Upon introducing the new legislation regulating I&C procedures in Estonia, the Estonian Employers' Confederation (ETTK) was not satisfied with the Employee Trustee Act imposing additional obligations on small enterprises by constituting an obligation for information and consultation on companies with at least 30 employees (instead of the 50 employees provided in the Directive). Also, they were not satisfied with the organisation of employee and trade union representatives in companies (see also EE0710029Q). Also, there has been no strong support by the government to establishment of I&C bodies, since the adoption of the new act in 2007.

(d) What explains the absence of I&C bodies in some undertakings/establishments in which I&C bodies are supposedly mandatory or the statutory right to trigger their introduction applies?

I&C bodies are not mandatory in all companies. This explains the absence of I&C bodies in large part. At the same time, the absence of the I&C procedures in companies where it is mandatory (i.e. companies with more than 30 employees) is difficult to explain due to lack of research information in this area. Possibly, the main problems are related to the enforcement of I&C regulations. According to the Employee Trustee Act, Labour Inspectorate (TI) will supervise the implementation of the I&C in companies. At the same time, the inspections of labour inspectorate have shown that in terms of supervising labour relations in companies, the priority is the supervision of implementation of Employment Contracts Act rather than Employee Trustee Act together with I&C procedures. Also, it might be expected that employees are not informed well enough about their rights in terms of information and consultation in the company and thus have not turned with these complaints to the Labour Inspectorate.

Question 3: Constitutional provisions

(a) Are the structure, rights and functioning of I&C bodies in your country determined by:

  1. statutory requirements that apply to all establishments/undertakings
  2. organisation-specific agreements/arrangements that may differ from the statutory provisions, providing the scope for organisations to vary the design of the I&C body and the processes of information provision and consultation
  3. a mixture of the two.

Structure, rights and functioning of I&C bodies in Estonia are determined by a mixture of the two aspects, although the scope for organisation-specific arrangements is vary small. On the one hand, structure and rights of I&C bodies (i.e. employee trustees or trade union representatives) are subject to statutory requirements that apply to all establishments/ undertakings. In terms of the processes of I&C, minimum requirements in terms of the content of I&C are defined in legislation, while company-level agreements can introduce a wider selection of themes for I&C. Also, the ways of I&C can be subject to agreement between employers and employees.

(b) To what extent can and do organisation-specific agreements/arrangements differ from national statutory requirements on I&C? What motivates the parties to introduce such agreements/arrangements? Please summarise any available data on the provisions of organisation-specific agreements/arrangements.

There is no data available on the extent of organisation-specific arrangements. At the same time, as the scope for organisation-specific arrangements is rather small, it might be expected that there are not many practices going far beyond legislative requirements.

(c) Are the terms of organisation-specific agreements/arrangements enforceable? What procedures – e.g. complaint to external administrative or judicial authorities (please specify which) – are available for this purpose?

In terms of the content of I&C procedures, a complaint may be filed to the Labour Inspectorate. However, according to the quarterly reports of the Labour Inspectorate, inspections have mainly been related to the implementation of the Employment Contracts Act or remuneration rather than I&C procedures.

Question 4: The main subjects for I&C

(a) What types of information are regularly provided by senior management to I&C bodies? Please give examples.

Results of the Working Life Barometer 2005 are indicated in figure 1 below. Employees are mostly informed of issues related to work organisation (i.e. employees are informed before or after the decision is made on changing work organisation, but with no possibility to express an opinion). The top three topics for information include changes in remuneration principles (56% of employees are informed), changes in working arrangements (49%) and conditions of occupational health and safety (44%) (figure 1). Employees are the least informed of issues related to strategies or general management of the company.

(b) What issues are typically the subject of consultation between management and employee representatives? Please give examples.

According to the Working Life Barometer 2005, employees are less often consulted (i.e. employees have the possibility to express their opinion, no matter whether it is considered upon making a decision or not) compared to providing information. The top three topics consulted with employees include vacation schedules (60%), changes in working time (38%) and changes in working arrangements (35%). The share of employees who have been consulted related to issues of general management remains around 10% (see figure 1).

Figure 1. Information and consultation at the workplace, 2005, %

Figure 1. Information and consultation at the workplace, 2005, %

Source: Saar Poll, 2005 (Working Life Barometer data)

(c) What issues are typically raised by employee representatives themselves? Please give examples.

There is no information on the issues typically raised by employee representatives themselves.

(d) Since the onset of the recession, to what extent have I&C bodies been a vehicle for dialogue and consultation over management decisions concerning restructuring and recession-related developments? Please provide a general overview with evidence and examples.

It is difficult to assess the extent of the role of I&C bodies in the recession due to the lack of respective information. However, in terms of cases of wage freeze or reduction of working hours in the recession, reports for EIRO seem to indicate that in case employees have been consulted, they have been forced to agree in terms of a choice between reduction of workplaces or reduction of wages/working hours (see also EE0902039I, EE0902059I, EE0903029Q).

Question 5: The nature and extent of the I&C process

(a) How often do I&C bodies typically meet with management? Is it common practice for special meetings of the I&C body to be called to consider urgent or important matters? If so, on what issues?

There is no information on the frequency of meetings between I&C bodies and the management.

(b) How does consultation take place? For example, is information on proposed changes provided by management so that employee representatives can prepare a considered view? Do managers provide a reasoned response to employee representatives’ opinions? Examples of good and poor practice would be helpful.

There is no information on how the consultation procedure takes place in practice. Although, the process of consultation is relatively well described by legislation with almost no possibility for company-specific arrangements (see also EE0710029Q).

(c) Is information usually provided on a confidential basis to the I&C body before management decisions are taken and announced? Are there examples of I&C not taking place due to confidentiality considerations?

There is no information of such practices.

(d) Please outline what guarantees and protections employee representatives usually have, e.g. time off work, training, material and financial resources, facilities, protection against dismissal/ discrimination, access to workers.

According to legislation, employee representatives (both employee elected and those representing trade union members) have the right for time off work. The length of time off varies between 4 hours and 40 hours per week depending on the number of employees represented or number of trade union members represented. Employee representatives also have the right for respective training, maintaining their pay level for performing the tasks of employee representatives, use employer's facilities, protection against dismissal (i.e. upon redundancies, employee representatives have the preferential right to maintain their job), protection against discrimination and access to information related to working conditions.

(e) Can employee representatives seek external advice on how to handle difficult topics for consultation (e.g. from trade unions, external consultants)? In the case of the latter, who pays?

Inclusion of external experts is allowed upon consultations. However, it has not been specified who will pay for the inclusion of experts. Thus, this is subject to company-level arrangements. At the same time, there is no information available on the extent of using external experts for consultations.

Question 6: Practical outcomes of consultation

(a) What evidence is there, if any, of the consultation process resulting in the modification of management decisions and/or the process or timetable for their implementation? Please give an overview of the impact of consultation with examples.

There is no information available on the results of the consultation process.

(b) How many complaints per year concerning the operation of I&C procedures (e.g. employers not consulting in circumstances where consultation is obligatory) have been lodged with administrative or judicial authorities since 2005? Who were the claimants and what were the key issues? What proportion of these applications were upheld? What sanctions were imposed?

There is no information available on the number of complaints concerning I&C procedures.

Question 7: Relationship between I&C bodies and other forms of employee voice

(a) Can, and if so do, trade unions play a part in the establishment of I&C bodies and in their operation? Do external trade union officers often sit on I&C bodies? How common is it for I&C bodies to include both union and non-union employee representatives?

Trade union representatives are included to the I&C process in case there is one present in the company. However, there is no information on the extent of practices where both union and non-union employee representatives for an I&C body.

(b) Is there any overlap between the remit of I&C bodies and trade union-based collective bargaining? If so, how are such issues resolved?

Trade unions have the right to conclude collective agreements in companies. Only in case there does not exist a trade union, non-trade union representatives may conclude collective agreements.

(c) Is the consultation required by the collective redundancies/transfer of undertakings Directives carried out via I&C bodies, trade unions or other employee representatives?

Yes, consultation required by the collective redundancies and transfer of undertakings Directives are carried out via I&C bodies (trade union or non-trade union employee representatives or directly to employees) (Employment Contracts Act, Employee Trustee Act).

(d) Is the use of direct forms of employee involvement by management through such things as team briefings seen as complementary to or in competition with the I&C body?

According to the design of Estonian legislation on I&C, direct form of employee involvement is complementary to the I&C body. In case there is no I&C body elected in the company, employer is obliged to inform and/or consult with employees directly.

Question 8: Views of the social partners

(a) What are the attitudes of the main employer and trade union organisations in your country towards (i) the value or necessity of I&C bodies and (ii) the operation of I&C bodies in practice, especially in a recession?

The Estonian Trade Union Confederation clearly supports implementation of I&C practices in companies (for instance in their action plan for 2008-2011). Employers have also discussed the importance of I&C in seminars shortly after the introduction of the new act. In general, a seminar held in January on restructuring measures and practices with the participation of social partners also stressed the importance of I&C upon restructuring, especially in the recession. At the same time it was concluded that I&C practices should be used more often for successful restructuring practices. The best practices analysed indicated that implementation of I&C was common for all cases (conclusions have been drawn in Nurmela, Võrk, forthcoming).

(b) Have the social partners, jointly or separately, conducted any review of the operation of the national regulatory framework governing I&C? What is their assessment of its effectiveness? Is there any pressure from the social partners for reform?

No such reviews have been published by the social partners.

Commentary by national correspondents

Estonia was one of the countries where the implementation of the Directive resulted in adoption of new law – Employee Trustee Act. However, it is difficult to provide any reliable estimate on the extent to which I&C bodies have been established due to the lack of respective surveys. Still, it seems that successful implementation of I&C, especially in the situation of restructuring, has rather been an exception than a common practice. Still, the importance of I&C upon restructuring has been stressed (Nurmela, Võrk, forthcoming). While the trade unions have been the most active on the issue, the government or employers have not introduced any new initiatives since the adoption of the law in 2007.

References:

Kirsti Nurmela, PRAXIS Center for Policy Studies

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