Employee with independent decision-making capacity

Agreement

An employee with independent decision-making capacity is an employee who, due to the nature of work, is free to organise their own working time. Such an employee is given greater freedom to organise their working time according to their wishes and needs. In this way, the employer can offer the employee more flexible organisation of work and better implement new ways of working.

The agreement on performing work as an employee with independent decision-making capacity must be in writing and signed. Such an agreement can only be concluded if the employee is fully and completely free to organise their working time. An employee is free to organise their working time if the employer does not measure the length of the employee's working time and does not determine it in advance, or if the employee can determine their own working time. For example, the employee can choose independently which day of the week and time of day they perform their duties. It is not purposeful or permissible to conclude an agreement on performing work as an employee with independent decision-making capacity with an employee who only has partial freedom to determine their own working time. For example, an employee has a certain degree of independence in deciding what time they start work, but is obliged to carry out their duties and be available to the employer from 10:00 to 13:00 Monday to Friday.

Depending on the nature of the specific work, an agreement on performing work as an employee with independent decision-making capacity may be possible to conclude with various employees. For example, researchers, translators, lawyers, and accountants may have considerable independence in organising their working time. However, it is important to make sure, on a case-by-case basis, that these employees are completely free to plan their own working time. This means that the employee and the employer can still agree that the employee will attend certain meetings and that the employee's duties will be subject to certain deadlines. An employee with independent decision-making capacity will continue to be subject to the direction and control of the employer, but it is important to assess their freedom to choose the time during which they perform their duties.

An employee is not an employee with independent decision-making capacity if the organisation of the employee’s working time is flexible but the nature of the work requires a large number of duties to be performed at specific times. For example, there is no independent decision-making capacity if the employee works remotely and has to be available to the employer from 9:00 to 17:00 (to attend meetings, reply to correspondence at specific times, etc.).

The agreement on performing work as an employee with independent decision-making capacity must not be damaging to the employee's health and safety. The employer must make sure that the agreement is not damaging to the employee. The employer must comply with the requirements of the Occupational Health and Safety Act, in particular to assess the risks of applying the agreement on performing work as an employee with independent decision-making capacity on the employee’s health, instruct the employee on possible work-related hazards, and send the employee for a medical examination in accordance with the procedure laid down by law.

An agreement made with an employee who is a minor on working as an employee with independent decision-making capacity is void.

Working time

The calculation of the working time of an employee with independent decision-making capacity is subject to a calculation period of one month. The agreed monthly working time of an employee with independent decision-making capacity depends on the workload and the number of calendar days agreed in the employment contract. An employee with independent decision-making capacity may work more than the agreed working time in a calendar month, but in such a case an agreement on performing overtime work must be concluded with the employer. An employee with independent decision-making capacity is subject to the general limit on time for performing work (Employment Contracts Act § 46). This means that even together with overtime work, an employee with independent decision-making capacity may not work more than an average of 48 hours per a period of seven days over the calculation period.

The following does not apply to an employee with independent decision-making capacity:

1. procedure for the compensation for night work and work done on public holiday (Employment Contracts Act § 45);
2. regulation of organisation of working time (Employment Contracts Act § 47);
3. rules for on-call time (Employment Contracts Act § 48);
4. restriction on night work (Employment Contracts Act § 50);
5. restriction on daily rest time (Employment Contracts Act § 51);
6. restriction on weekly rest time (Employment Contracts Act § 52);
7. shortening of working time preceding New Year’s Day, the anniversary of the Republic of Estonia, Victory Day and Christmas Eve by three hours (Employment Contracts Act § 53).

Amount of wages

The agreement may be concluded with an employee with independent decision-making capacity whose monthly wages are at least the average gross monthly wages in Estonia in the quarter preceding the conclusion of the agreement, based on data published by Statistics Estonia. For example, the average gross monthly wages were €1,593 in the first quarter of 2022 and €1,693 in the second quarter of 2022. The 2021 figures for the first, second, third and fourth quarters were as follows: €1,473, €1,538, €1,553 and €1,625.

If at the time the agreement is concluded, the employee's monthly wages correspond to at least the average gross monthly wages in Estonia, the parties do not have to adhere to subsequent changes in the average gross monthly wages after the agreement is concluded. For example, the gross monthly wages condition is fulfilled if the employee's wages are €1,700 and the average gross monthly wages at the time of concluding the agreement (second quarter of the year) were €1,600 in the first quarter of the year. If after the agreement has been concluded it becomes apparent over time that the average gross wages for the third quarter of the year have risen to €1,800, it will have no retroactive effect on the agreement. Where necessary, the parties must be able to prove the amount of the employee's wages at the time the agreement was concluded. For example, the parties can set out the wages that were valid at the time the agreement was concluded or attach a wage sheet to the agreement.

Termination of the agreement

The parties may terminate the agreement at any time by giving 14 calendar days’ notice. In this way, the employee can terminate the agreement if they consider such organisation of work unsuitable to them. For example, if it hampers work performance or is too straining mentally and they wish to work under the regular calculation of the working time. The employer can also terminate the agreement with 14 calendar days' notice, for example, if there is a need related to organisation of work to use the employee from now on under regular calculation of working time.

This is a termination of the agreement on performing work as an employee with independent decision-making capacity, not a termination of the employment relationship.