Entry into employment contract

Last updated: 31.01.2024

Work may be performed under various types of contracts, such as an employment contract, a contract for services, or an authorisation agreement.
Employment contracts must be signed by hand or digitally.
An employment contract may be concluded for a specified term only with a good reason arising from the temporary, fixed-term nature of the job.

Which type of contract should one choose for work?

Work may be performed under various types of contracts, the most prevalent being employment contracts, contracts for services, and authorisation agreements. Before choosing and signing any particular contract, it is advisable to give careful consideration to which type of contract is most suitable for the legal relationship that will be established. It must reflect the real will of the parties as agreed during negotiations.

	Employment contract	Authorisation agreement	Contract of services
Legal basis	Employment Contracts Act (ECA) section 1 Subsection 1	Law of Obligations Act, sections 619–634	Law of Obligations Act, sections 635–657
Remuneration	At least the minimum wage	Right to remuneration, but unremunerated agreements also possible	Right to remuneration
Nature of job	Performance of work as a process subject to management and control by the employer	Provision of services subject to the agreement	Manufacturing or modification of an object or provision of services for the achievement of any other agreed result
Form of contract	Written (except for ECA section 4 subsection 5)	Oral or written	Oral or written
Term	Indefinite (except for ECA section 9)	Fixed (indefinite is not forbidden)	Fixed
Superior–subordinate relationship	Yes	No	No
Required personal performance	Yes	No	No
Higher remuneration for overtime, working on holidays and on night shifts	Yes	No	No
Compulsory and paid annual leave	Yes	No	No
Fixed working hours and restrictions on working time and rest time	Yes	No	No
Medical insurance	Yes	Yes/no*	Yes/no*
Organisation of medical examination	Yes	No	No
Place of settlement of disputes	Labour dispute committee or court	Court	Court
Examples	Customer service representative, teacher	Lawyer (representation of clients in court)	Renovator (e.g., renovation of the apartment's bathroom)

*In order to receive health insurance, the total social tax declared from one or several authorisation agreements and/or contracts for services in 2024 must be at least 239,25 euros (i.e. gross monthly wage of 725 euros). Health insurance cover becomes valid on the day following the term of submission of the declaration of income and social tax, unemployment insurance premiums and contributions to the mandatory funded pension (TSD). TSD is submitted by the 10th day of the month following the month the payment was made. For example: a service is provided from 1 January, first remuneration is paid on 5 February, TSD is submitted on 10 March, health insurance cover will be valid from 11 March.

Example:

Employment contract: Tarmo is a professional builder. He has worked for a construction company under an employment contract for 10 years. The employer is obliged to find new construction sites to ensure work for employees, to keep account of working and rest time, and to provide employees with work equipment, clothing and materials. Tarmo is obliged to do the work in the agreed volume, in the agreed place and at the agreed time in accordance with the instructions of the employer.

Contract for services: Tarmo wants to earn some extra money and his neighbour needs a new garage. Tarmo concludes a contract for services with his neighbour, under which he must build a garage according to the project provided by the neighbour. Tarmo will receive remuneration when the garage is completed and delivered. Tarmo has to find the necessary work equipment himself.

Authorisation agreement: A local vocational school asks Tarmo to give a two-day lecture on the use of work equipment in construction. Tarmo and the vocational school conclude an authorisation agreement for the lecture. According to the authorisation agreement, Tarmo has to give a lecture to the students, the content and structure of which is up to Tarmo.

Does starting work constitute the conclusion of a contract?

The Employment Contracts Act presupposes that all essential terms are agreed and the employment contract is concluded in writing before commencing work. According to the Employment Contracts Act, the conclusion of an employment contract in writing is not mandatory only if the duration of the employment relationship does not exceed two weeks.

Unfortunately, cases where an employee starts performing the duties assigned to them before receiving a written contract are not rare. The employer, meanwhile, only gives vague answers to the question of when the employment contract will be signed. In such a situation, the employee should send an e-mail to the employer, reciting the most important agreements and requesting the issue of a written copy of the employment contract. Upon receipt of such a request, the employer is required to inform the employee of the terms of the employment contract in writing within two weeks. Sometimes the employee may then be told of less favourable agreements or terms, which were not mentioned when they commenced work.

As soon as an employee starts performing their duties, a contractual relationship is established between them and the employer and both parties become equally subject to the Employment Contracts Act. Thus, an employment relationship can arise even without concluding a contract, upon commencing work.

If work is nevertheless commenced without a written contract, it is advisable to set down the duties, wages, place of work, and other agreements in a format which can be reproduced in writing; for example, in an e-mail. Oral agreements are very difficult to prove later on. If work has already commenced, the working conditions are deemed to have been accepted, and if a written contract is concluded later, the employee is presumed to have accepted the terms of the contract.

When commencing work without a written contract, the employee has the right to request from the employer that an employment contract be drawn up within 14 calendar days.

A written employment contract does not have to be concluded in the case of an employment relationship lasting less than two weeks. However, it is advisable to do so even then, in order to avoid misunderstandings and disputes later on.

An employment contract and the agreement between the parties is not invalid if it has not been set down in writing, but it can make it more difficult to prove what has been agreed, which can lead to disputes over wages, job duties, and other terms. If an employee has commenced the performance of their duties, but the employment contract has not yet been made in writing, the employer cannot claim that no contract has been concluded.

In order to terminate an employment relationship for which a written contract has not been made, both parties must still follow the rules for cancellation laid down in the Employment Contracts Act. An oral employment contract, too, can only be cancelled on the basis of a declaration drawn up in a format which can be reproduced in writing, in compliance with the periods for advance notice. Thus having, for example, an oral agreement with an employee does not make it easier for the employer to cancel the employment relationship. Rather, it may lead to a labour dispute, which may result in the payment of compensation to the other party.

When establishing an employment relationship, it is therefore always advisable to discuss in detail and record in writing all of the rights and obligations related to the job, in order to avoid disputes later on.

Form of employment contract

The Employment Contracts Act provides for the written form for employment contracts, meaning that they must be signed by hand or digitally.

The written form is not mandatory in the case of employment relationships lasting no more than two weeks. Such cases generally involve work that lasts for a very short period. However, even in the case of short-term work, it is advisable to conclude the employment contract in writing in order to avoid misunderstandings and disputes later on.

Failure to comply with the requirement for the written form does not invalidate the employment contract. This means that the agreement between the parties is not invalid just because it has not been set down in writing, but it can make it difficult to prove what was agreed later on. It is always possible that a dispute will arise between the parties at a later point in time regarding the wages, job duties, and other terms. If, for example, an employee has commenced the performance of their duties, but the employment contract has not yet been made in writing, the employer cannot claim that no contract has been concluded.

Employment contracts must be drawn up in two copies, one to be retained by the employee and the other by the employer.

Employment contract sample

Entry into employment contract for a specified term

The law presumes that employment contracts are entered into for an unspecified term. If an employer wishes to enter into an employment contract with an employee for a specified term, there must be a good reason for doing so, related to the temporary, fixed-term nature of the job. Such cases constitute a special case of working conditions, due to which the employer must inform the employee in writing of the duration of the employment contract and the reasons for concluding the contract for a specified term. In the event of failure to comply with this obligation, the employment relationship will be deemed to have been established for an unspecified term. Entry into a contract of employment for a specified term requires an agreement between the parties.

A contract of employment may be entered into for a specified term in two cases:

the job is of a temporary nature (for example, a temporary increase in work volume, performance of seasonal work, or temporary agency work at a user undertaking);
substitution of an employee who is temporarily absent.

A contract of employment may be entered into for a specified term of up to 5 years. The Employment Contracts Act does not prescribe a minimum duration for contracts of employment entered into for a specified term, which means that such contracts may be concluded even for just a few days.

For the substitution of an employee who is temporarily absent, an employment contract may be entered into for a specified term of the period of the substitution. For example, for the substitution of an employee who is taking parental leave, an employment contract may be concluded for until the employee returns from parental leave. The term of an employment contract may be determined by a specific date or the occurrence of a specific event (return of the substituted employee).

Extension and consecutive conclusion of employment contracts entered into for a specified term

The law sets restrictions on the consecutive conclusion and extension of employment contracts entered into for a specified term.

When entering into an employment contract for a specified term, it is important to remember that it will be deemed to have been entered into for an unspecified term in any of the following cases:

An employment contract has been entered into for a specified term on more than two consecutive occasions for the performance of similar work. Entry into employment contracts for a specified term is deemed consecutive if the time between the expiry of one employment contract and entry into the next employment contract does not exceed two months. Similar work means work that is identical to work performed under a previous contract and work where the duties are similar to previous ones.
An employment contract entered into for a specified term has been extended more than once in 5 years.

In the case of an employment relationship involving temporary agency work, the restriction on the consecutive conclusion or extension of an employment contract entered into for a specified term applies to each user undertaking separately, i.e. the restriction must be complied with if the temporary agency work is performed at the same user undertaking on the basis of consecutive contracts entered into for a specified term.

When doing temporary work while registered as unemployed (so-called workbit), the exception from the restriction on consecutive entry into and extension of employment contract for specified term applies. This exception allows the employer to unlimitedly enter into employment contracts for a specified term for the performance of similar work with a duration of up to eight calendar days during a six-month period without the employment contract being deemed to have been established for an unspecified term. The calculation of the six-month period starts from the date of conclusion of the first employment contract for a specified term of up to 8 calendar days.

The condition that the unemployed person can work a maximum of eight days a month, and the contract concluded for temporary work cannot be longer than eight days still applies. Thus, it is possible to conclude for example, one employment contract with a duration of up to eight days, or if one so wishes even eight one-day employment contracts in one month with a person doing temporary work.

An employment contract for a specified term concluded for temporary work while registered as unemployed shall be deemed to have been established for an unspecified term, if:

the employer, when concluding an employment contract for a specified term, exceeds the allowed number of days in one month (for example, if the parties conclude an employment contract for a specified term with a duration of nine days or more);
after the six-month period has passed the same employer concludes within the next six months a new employment contract for a specified term with the same employee.

It is important to keep in mind that for concluding an employment contract for a specified term there must still be a good reason arising from the temporary, fixed-term nature of the work (in particular, a temporary increase in work volume, performance of seasonal work or substitution of an employee who is temporarily absent).

You can find information about temporary work while registered as unemployed on the website of the Unemployment Insurance Fund.

Notification of employee of working conditions

Mandatory information (subsection 5 (1) of the Employment Contracts Act)	Special cases (section 6 of the Employment Contracts Act)
the name, personal identification code or registry code, place of residence or seat of the employer and the employee
the date of entry into the employment contract and commencement of work by the employee	entry into employment contract for a specified term
a description of the duties	the contents of the restraint of trade clause or the obligation of confidentiality
the official title if this brings about a legal consequence	the place of performance of teleworking
wages and payday	temporary agency work
taxes and payments payable and withheld by the employer, including a reference to the authorities receiving the taxes and payments and protection accompanied by the payment thereof
training provided by the employer and other benefits if agreed upon	application of summarised working time
working time	compensation for expenses
place of performance of work	working conditions if the employee works abroad for a longer period of time
duration of annual holiday and a reference to other holiday compensated by the employer
a reference to the form reproducible in writing upon termination of the employment contract, the obligation to give reasons and the terms of advance notice
a reference to the rules of work organisation established by the employer
a reference to a collective agreement if applicable with regard to the employee
a reference to the procedure for performing and compensating overtime work
duration of the probationary period

An employment contract is deemed to have been entered into if the employee and the employer have reached an agreement on all relevant terms and conditions. The relevant conditions determine the specific employment relationship by mutual agreement between the employee and the employer.

As a general rule, the important conditions to be agreed in the employment contract are wages, working time, duties to be performed, place of work, etc. The law prescribes the conditions which the employer must notify the employee of in writing before starting work. The employer must inform the employee of the conditions in the employment contract or an accompanying document. In doing so, it is important to make a clear distinction between the terms agreed between the parties and the information communicated to the employee.

For example, the agreed condition is that the wages and the information communicated to the employee is informing the employee about the existing collective agreement. The terms agreed by the parties can only be changed by agreement. The employer must provide the employee in writing with at least the following information:

the name of the employer and the employee;
registry or personal identification code; place of residence or seat;
the date of entry into the employment contract and commencement of work by the employee;
a description of the duties;
wages and the time of payment of wages (payday);
taxes and payments payable and withheld by the employer, including a reference to the authorities receiving the taxes and payments and protection accompanied by the payment thereof;
working time;
place of performance of work;
the duration of annual holiday and a reference to other holiday compensated by the employer;
training provided by the employer
the form reproducible in writing upon termination of the employment contract, the obligation to give reasons and the terms of advance notice ;
work organisation rules;
a valid collective agreement;
the procedure for performing and compensating overtime work;
duration of the probationary period.

The data must be worded in a way that allows the employee to understand them unambiguously. The employer must not formulate the data in a manner that is too complicated and/or vague.

In certain cases, it may also be appropriate to include definitions or further explanations in the employment contract in order to ensure a common understanding of working conditions and to avoid subsequent disputes.

If the information is not clear, the employee must ask the employer for further explanations. Normally, the employer provides the employee with information before starting work. If the employer has not done so, the employee can request the employer to provide data at any time. The employer must provide the data no later than two weeks after receiving the request.

Notification of employee of working conditions in special cases

The Employment Contracts Act also obliges the employer to inform the employee in writing of the conditions which each employment contract presumably does not contain.

These agreements are:

entry into employment contract for a specified term;
the contents of the restraint of trade clause or the obligation of confidentiality;
teleworking;
temporary agency work;
application of summarised working time;
compensation for expenses, and
working conditions if the employee works abroad for a longer period of time.

If the employer has not provided the employee with the above information in writing, it is presumed that no relevant agreements have been concluded, no obligation has been imposed or that the law applies (for example, if the parties have not agreed to apply or shorten the probationary period, the probationary period is 4 months, as prescribed by law). For example, if an employer claims that an employment relationship for a specified term has been concluded between the parties, they must have a written agreement setting out the duration of the employment contract entered into for a specified term and the reason for concluding it.

Preservation of employment documents

Employment contract – 10 years from the expiry of the employment contract
Employment contracts entered into before 01/07/2009 – 50 years from the expiry of the employment contract
Risk assessment – 55 years
Data on the investigation of accidents at work and occupational diseases – 55 years

Pursuant to subsection 5 (5) of the Employment Contracts Act, the employer shall keep a written document of the employment contract during its validity and for ten years as of the termination of the employment contract. This ensures that there is a document needed to resolve any disputes arising from the agreement.

Pursuant to section 133 of the Employment Contracts Act, as of July 2009, the employment record book held by the employer must be given to the employee upon expiry of the employment contract or submitted to the department of the Social Insurance Board of the place of residence or seat for registration of the data, provided the employee has not taken it out one year after expiry of the employment relationship (section 134 of the Employment Contracts Act). New employment record books are no longer issued.

The Employment Contracts Act does not provide for more preservation terms, but it should be noted that employment contracts entered into before 01/07/2009 must be retained for 50 years from the expiry of the employment contract on the basis of the previously valid Employment Contracts Act (subsection 131 (2) of the Employment Contracts Act). This is linked, if necessary, to the provision of the document required to prove years of pensionable service.

If it is not possible to prove the years of pensionable service for the period before 1999 with an employment record book or other written document of the employment contract for the reason that they have not been preserved, the employer of that time must be obtained for a certifying document. In the absence of a former employer, it is possible to contact the National Archives (www.ra.ee), where the documents of companies that have closed down are stored.

The employer has no obligation to preserve previously prepared personnel files on the basis of section 136 of the Employment Contracts Act as of 01/07/2009, but their continued preparation is not prohibited.

As always, the provisions of the Personal Data Protection Act must be complied with when processing personal data in employment relationships.

The results of the risk assessment shall be in writing and preserved for 55 years. Data on the investigation of accidents at work and occupational diseases shall be preserved for 55 years.

Specifications for the employment relationships of crew members

The employment relationships of crew members are regulated by the Seafarers’ Employment Act, which provides for specifications related to the employment of persons working on ships entered in the Estonian ship registry or the register of bareboat chartered ships (ships registered in Estonia). However, if some issues are not covered in the Seafarers’ Employment Act, other laws shall apply (e.g. the Employment Contracts Act, the Collective Agreements Act, etc.).

A crew member is a person employed to perform duties on board a ship in order to maintain or service the ship and/or passengers. Crew members shall enter into a seafarer’s employment contract. Crew members shall be entered in the crew list. The crew list is a basic document that provides the national authorities with information on the number and composition of the crew when entering and leaving the port.

Conclusion of a seafarer’s employment contract and its mandatory data

A seafarer’s employment contract is an employment contract on the basis of which a natural person (crew member) works for another person (operator), subject to the management and control of the operator. The operator shall remunerate the crew member for the work.

The provisions of the Employment Contracts Act concerning entry into employment contracts are applied to the entry into seafarer’s employment contract.

Persons applying to become a crew member have the right to examine the terms and conditions of the contract in the course of pre-contractual negotiations as well as to seek advice on such terms and conditions.

In order to enter into a seafarer’s employment contract, the operator may require persons applying to become a crew member to provide documents and information in which the operator has a legitimate interest, above all:

their discharge book or certificate of record of service on ships, and if necessary, other identity document;
their certificate of competency or professional certificate in proof of the required qualification;
a certificate in proof of their education;
their health certificate;
their alien’s residence or work permit.

In addition to that provided for in section 5 of the Employment Contracts Act, a written document of a seafarer’s employment contract shall include at least the following information:

the place of birth of the crew member;
the place where the crew member shall commence work;
the ship or ships where work shall be commenced and the ship’s registration number;
a reference to the health and social security guarantees offered by the operator, including to the benefits in connection with work-related illnesses or injuries or death caused by an occupational accident;
a reference to the organisation of repatriation of the crew member;
a reference to the conditions of and the procedure for the cancellation of the seafarer’s employment contract, including to the terms of advance notice of cancellation of the seafarer’s employment contract.

In addition to above, a written document of an employment contract of a crew member employed on a fishing vessel shall include information concerning the upcoming fishing voyage if it can be specified at the time of the entry into the seafarer’s employment contract.

A written document of an employment contract of a crew member employed on a fishing vessel need not include information about the time and place of commencement of work if such information cannot be specified beforehand.

In addition to that provided for in section 5 and subsection 6 (2) of the Employment Contracts Act, a written document of a seafarer’s employment contract entered into for a specified term shall include the information provided for in sections 9 and 10 of the Seafarers’ Employment Act.

A written document of a seafarer’s fixed-term employment contract entered into for one voyage shall also set out the port of destination and the time of arrival at the port after the passing of which the seafarer’s employment contract shall expire.

A written document of an employment contract of a crew member employed on a fishing vessel need not include information about the port of destination and the time of arrival in port if such information cannot be specified beforehand.

A seafarer’s fixed term employment contract may be entered into for up to five years if it is justified by good reasons arising from the temporary fixed-term characteristics of the work, especially a specified voyage or specified voyages, a temporary increase in the work volume, or a navigation period.

With the consent of the operator, the master of a ship may enter into a seafarer’s fixed term employment contract for up to four months if it is necessary for ensuring the safe navigation of ships.

The place where the crew member shall commence work

Crew members shall work on board the ship specified in the seafarer’s employment contract unless agreed otherwise.

The operator may relocate a person in the ship’s management to another ship, where the person shall be ensured the same working conditions as agreed upon in the seafarer’s employment contract, if the relocation is necessary considering the organisation of work and unless agreed otherwise in the seafarer’s employment contract.

Collective agreement

A collective agreement is a voluntary agreement between employees and an employer that can determine working conditions. Entering into a collective agreement is a good way for employees to stand together for better working conditions. This is also a good way for an employer to determine the working conditions of many employees at once. The conclusion, validity, expiry and content of a collective agreement are regulated by the Collective Agreement Act.

Why enter into a collective agreement?

Employees can collectively demand better working conditions by collective agreement.

The advantages of a collective agreement over an employment contract for an employee are mainly in the participation of employees' representatives in concluding an agreement. A collective agreement is concluded by a trade union or an employees’ representative who has better legal knowledge than a regular employee and greater protection in the employment relationship (for example, in the event of cancellation of the employment contract), so that the employees’ representative can confidently make claims against the employer.

At the same time, the employee has no fear that working conditions could deteriorate as a result of the collective agreement. Conditions worse than those prescribed by the law cannot be agreed in a collective agreement, unless the possibility of such an agreement is provided by law.

If a single employee is subject to several collective agreements which regulate the same matter differently, the agreement which is most favourable to that condition shall apply to them.

The main reasons for concluding a collective agreement for an employer are the following:

the working conditions of many employees can be determined at once;
the collective agreement allows for exceptions to the law in certain cases;
a valid collective agreement determines the obligation to refrain from striking (parties refrain from any strikes and lock-outs).

Determining the working conditions of many employees at once enables the employer, in particular, to save time and money and to ensure equal treatment of employees. In this way, the annual wage negotiations with each individual employee can be replaced by collective negotiations, in which the wages of all employees are determined at the same time. In addition, the collective agreement may provide for arrangements for the use of the employer's assets (e.g. use of the sauna), recognition of anniversaries (employee's birthday, marriage, etc.) or other similar arrangements which would otherwise require employees to seek a separate opinion and appropriate arrangements. The existence of such agreements in a collective agreement ensures equal treatment of employees and greater satisfaction of all parties, as they are aware of the rules and the history of obtaining them.

Another important reason for concluding a collective agreement is the fact that in certain cases the law allows derogations from the requirements of law by a collective agreement. For example, a collective agreement can extend the calculation period of working time for health, welfare, agricultural and tourism workers by a collective agreement to up to 12 months and make exceptions to the night work restriction.

The third and in some cases the most important reason for concluding a collective agreement is the accompanying obligation to refrain from striking. This means that the employer is forbidden to organise a lockout and employees to strike in order to influence the terms agreed in the collective agreement. Therefore, a collective agreement guarantees the continuity of work for the employer during its validity.

In addition to the above, the conclusion of a collective agreement will certainly benefit the unity of employees and increase employee satisfaction. The conclusion of a meaningful collective agreement, which benefits both parties, reduces the number of disputes that may arise between the employer and the employee, thus improving the general working atmosphere. All this, in turn, increases productivity and enables both sides of the employment relationship to do more of their core business, i.e. work.

Registration of collective agreements

The employees’ representative must digitally submit the collective agreement, its amendments or termination agreement to the Ministry of Social Affairs for registration in the relevant database within 15 working days after the conclusion, amendment or termination of the collective agreement.

Conclusion of a collective agreement

The collective agreement is concluded as a result of collective bargaining.

A collective agreement can only be concluded and amended in writing. All annexes to the collective agreement must also be submitted in writing.

The right to conduct collective bargaining in the company belongs to the trade union or, in its absence, to the employees’ representative. Collective agreements can also be concluded between trade unions and federations of employers or central federations. A party to a collective agreement cannot be a third party, such as the Public Conciliator or an expert involved in the negotiations.

In order to start collective bargaining, the interested party must notify the other party of its wish to start collective bargaining and submit its draft collective agreement. Substantive negotiations must begin within seven days of receipt of the notification.

In order to conduct the negotiations, the parties shall appoint their representatives and inform the other party thereof. If negotiations take place during working hours, the representatives shall be released from their main job by agreement of the parties and shall be paid average wages for that time.

The negotiating parties have the right to involve experts in the negotiations. The costs of involving experts shall be borne by the party that invited them.

Of course, the representatives, experts and other persons involved in the negotiations have an obligation to maintain the confidentiality of production, business or professional secrets. Breach of the obligation to maintain secrets is punishable.

Extension of the collective agreement

A collective agreement applies to such employers and employees who belong to organisations which have entered into a collective agreement, unless otherwise prescribed by the collective agreement.

A collective agreement may be extended by agreement of the parties regarding working and rest time conditions. The scope of extension must be determined in the collective agreement.

An extended condition of a collective agreement will also apply to those employers and employees who are not parties to the collective agreement or persons whose interests are represented by the parties under the collective agreement and who are engaged in the industry agreed upon in the collective agreement or in a trade agreed upon in the range of such an industry.

Extension of a condition of a collective agreement may be agreed upon by:

a federation of trade unions or an industry trade union whose members account for 15 per cent of the employees in that industry or who have at least 500 members; and
an association or federation of employers whose members employ at least 40 per cent of the corresponding industry’s employees covered by the extended condition of the collective agreement.

The number of employees is estimated based on the average number of employees in the corresponding industry according to information from the Tax and Customs Board over the course of three months preceding the entry into the agreement on extension of the condition of a collective agreement, and based on evidence produced by the parties who made the agreement on extension of the condition of a collective agreement.

Estimation of the number of employees also takes into account employers not in any association or federation of employers who express to the association or federation their desire to enter into the agreement on extension of the condition of a collective agreement.

An extended condition of a collective agreement takes effect after the passing of three months from the publication in the official publication Ametlikud Teadaanded, unless the agreement sets out a later date.

Information and consultation upon extension of condition of collective agreement

Before extending a condition of a collective agreement, the parties to bargaining must provide information about their intention to extend to employers and associations and federations of employees in respect of whom the extension of the condition of the agreement is sought, and consult with them according to the procedure provided for in § 4³ of Collective Agreements Act.

The obligation to inform and consult includes at least:

the condition to be extended;
the scope of application of the condition to be extended;
the estimated time of entry into effect of the condition to be extended.

The parties to bargaining are to notify the public through a national media channel no later than 30 days before the bargaining concerning the extension of the condition of a collective agreement begins, announcing:

the information referred to in subsection 2 of this section;
the due date for notifying of desire to participate in the consultation process;
contact details of the parties to bargaining.

The employer and the association or federation of employees in respect of whom a condition of a collective agreement is intended to be extended must give notice of their desire to consult with the parties to bargaining within ten days after the announcement of the information referred to in subsection 3 of this section, unless the notice sets out a longer term.

During bargaining, the employer and the association or federation of employees participating in consultation have the right to present opinions and proposals as to the extension and be given due explanations from the parties to bargaining. The parties to bargaining must justify disregard for opinions and proposals.

After bargaining concerning the extension of a condition of a collective agreement has ended the parties to bargaining are to notify the public through a national media channel, publishing the agreement reached on the website of the association or federation of employees and the association or federation of employers who participated in the bargaining.

Checking of extended condition of collective agreement

An extended condition of a collective agreement must be presented to the minister in charge of the policy sector along with documents proving the compliance of the parties to the collective agreement with the conditions provided for in § 4² (1) and (3) and performance of the obligations provided for in § 4³ of this Act.

The minister in charge of the policy sector will check the compliance of the extended condition of the collective agreement with the requirements of this Act. For advisory purposes, representatives of confederation of employers and confederation of employees will be involved in the checking process.

Entry into force, validity and expiry of the collective agreement

The collective agreement enters into force on the day of its signing, unless otherwise provided in the collective agreement. For example, an agreement may stipulate that what is agreed in it becomes effective retrospectively (for example, an agreement entered into on 3 March stipulates that employees' wages increase retroactively from 1 January) or later (for example, an agreement entered into on 3 March stipulates that employees' wages increase from 1 August).

The collective agreement is valid for one year, unless otherwise agreed. The validity of a collective agreement therefore depends on the agreement contained therein.

Collective agreement expires upon:

the end of the validity term (unless it has become indefinite for the reasons set out below);
cancellation of the collective agreement;
termination of a collective agreement or concluding a new collective agreement.

Upon expiry of the collective agreement (i.e. the end of the term), the collective agreement is deemed to have become indefinite if neither party to the collective agreement notifies the other party in writing at least three months before the expiry of the term that it does not wish to extend the agreement. If the agreement becomes indefinite, the parties are obliged to comply with all the terms and conditions of the collective agreement until the conclusion of a new collective agreement or its termination due to cancellation. An agreement for an unspecified term can be cancelled by either party by giving at least six months’ advance notice to the other party.

Introducing the collective agreement

The employer has an obligation to introduce the collective agreement to all employees when a new collective agreement concerning employees has been entered into. In addition, the collective agreement must be introduced to each new employee when they take up employment. At other times, the employer is obliged to introduce the collective agreement if the employee so wishes.

To whom does the collective agreement apply?

The validity of a collective agreement for a particular employee depends on the will of the parties to the collective agreement. The law gives the parties the right to determine the group of employees to whom the collective agreement applies. In the case of different groups of employees (for example, taxi drivers and office workers in a taxi company) or the geographical distribution of employees (the employer has two stores, one in Narva and the other in Pärnu), concluding several collective agreements in one company is justified. In this case, the parties can agree on which agreement applies to whom.

If the group of employees in question is not specified in the collective agreement, the collective agreement shall apply to all employees of that employer. This is the case regardless of whether the contract is concluded by an employees’ representative or a trade union.

What can be determined by a collective agreement?

A collective agreement can be used to agree on almost all work-related matters. It is only necessary to proceed from the general principle of contract law that a contract cannot impose obligations on persons who are not parties to the contract (for example, a contract between an employer and a trade union cannot impose obligations on a non-union worker).

Otherwise, there are essentially no boundaries. It is possible to agree on wages, holidays, procedures for lay-off, vocational and in-service training opportunities, etc. It may also be agreed on matters relating to the collective agreement itself, such as the automatic renewal of the collective agreement to be concluded, the conditions for amending it or the organisation of compliance monitoring.

It only needs to be noted that the conditions to be entered into would not be worse for the employee than those prescribed by law. Such agreements do not apply in a collective agreement.

Collective agreements of general application

The collective agreement for healthcare professionals concluded in the field of healthcare has been concluded between the Estonian Hospitals’ Association, the Estonian Ambulance Association and the Estonian General Practitioners' Association and the Estonian Medical Association and the Estonian Healthcare Professionals’ Association, which, according to the collective agreements’ database, includes 25,000 employees.

This collective agreement extends to all institutions and enterprises that provide healthcare services on the basis of an activity licence issued by the Health Board and whose activities are financed by a healthcare financing agreement concluded with the Health Insurance Fund or from the state budget, and to employees working in the abovementioned institutions and enterprises.

Collective agreement

In the transport sector the General Agreement on the Carriage of Passengers regulates the employment, professional and social relations of persons engaged in the bus transport of passengers belonging to the Association of Car Companies and members of the Estonian Transport and Road Workers' Trade Union.

The terms and conditions of working and rest time and remuneration provided for in the General Agreement on the Carriage of Passengers extend and are mandatory for all employers and employees engaged in the carriage of passengers by coach and bus for hire or reward, regardless of the type of agreement.

Collective agreement

The minimum wage agreement approved by the Government of the Republic applies across the sector. In 2024, the minimum hourly wage is 4.86 euros (gross) and the minimum monthly wage for full-time employment is 820 euros (gross). From 1 January 2024, the minimum salary of a teacher in the case of full-time employment is 1803 euros per month.