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COVID-19

Viimati uuendatud: 09.04.2020


The Labour Inspectorate of the Republic of Estonia is calling on all employers to follow the advice of the Health Board in connection with the prevention of the spread of COVID-19. Disinfectants should be used at the place of work and those arriving from high-risk areas should stay at home and carefully observe their health condition for two weeks. Both parties must consent to any changes in the terms and conditions of employment.

Questions and answers in this article:

Is it permitted to use section 37 of the Employment Contracts Act, i.e. reduction of wages for up to three months due to economic circumstances which are out of the employer’s control? If so, when? 

The spread of the coronavirus is one of the unforeseeable circumstances which allows the employer to unilaterally reduce the employee’s workload and their remuneration for three months based on section 37 of the Employment Contracts Act if payment of the agreed wages is unreasonably burdening for the employer. The wages may be reduced no further than the minimum wages established by the Government of the Republic of Estonia (584 euros per month or 3.48 euros per hour). 

Reduction of wages based on section 37 is, however, only permitted in certain situations:

  • If an employer, due to unforeseen economic circumstances beyond its control, fails to provide an employee with work to the agreed extent (this does not include seasonal changes in the workload).
  • If payment of the agreed wages would be unreasonably burdensome for the employer. For example, wages may not be reduced if the employer is unable to provide work in the agreed extent but has enough finances for payment of the wages and there is no actual need for changing the employee’s wages. 

How is section 37 of the Employment Contracts Act, i.e. reduction of wages for up to three months due to economic circumstances which are out of the employer’s control, applied and can the employer cancel the employment relationship? 

For the reduction of wages, the employer must first check if they can offer other work to the employee. If there is no other work to offer of if the employee rejects the other work, the employer must notify the employees’ representative or, if there is no employees’ representative, the employees directly of the planned reduction of wages at least 14 calendar days in advance. The employees will thus have an opportunity to have their say. They must present their opinions to the employer within seven calendar days after receiving the notice. 

If the employees do not consent to the reduction of wages, they may cancel the employment contract by notifying the employer thereof five working days in advance. Upon termination of the employment contract, the employee will receive the so-called final settlement, i.e. the wages earned and compensation for unused annual holiday which has not expired, as well as compensation in the extent of their one month’s average wages. 

Reduction of the wages of foreigners whose minimum wage may not be lower than the average gross wage in Estonia

There are some foreigners employed at our company. Their minimum wages are regulated by the Aliens Act pursuant to which they must receive wages which are at least equal to the average gross monthly wage in Estonia based on the latest information published by Statistics Estonia. Is it permitted to reduce the wages of foreign employees pursuant to subsection 37 (1) of the Employment Contracts Act and pay the minimum wage established by the Government of the Republic?

Section 37 of the Employment Contracts Act, i.e. reduction of wages, cannot be applied to foreign employees who are subject to the wage requirement arising from the Aliens Act, as this would create a conflict with the Aliens Act. The Police and Boarder Guard Board have clearly stated regarding this issue that there are currently no special orders applicable to the employment of foreigners. Thus, the Aliens Act must still be followed and the person must receive the wage prescribed by the wage requirement.

However, if changing the work load has been agreed with the foreigner, the person must receive the hourly wage based on the wage requirement depending on their work load. Further information about the payment of wages to foreigners can be obtained from the migration consultants of the Police and Border Guard Board, whose contact details can be found here: https://www.politsei.ee/en/migration-consultants.

Will permanent lay-offs be considered?

If it becomes clear that the situation is not improving and the employer is unable to provide work or pay the remuneration even at a reduced rate, lay-offs may be considered. A lay-off is the extraordinary cancellation of an employment contract by the employer due to economic reasons. Lay-offs become necessary if it is impossible to maintain the employment relationship under the agreed terms and conditions due to reduced volume of work or reorganisation of work or no work being available for another reason. Lay-offs also occur in the case of cessation of the employer’s operations, the employer being declared bankrupt, or completion of the employer’s bankruptcy proceedings without declaring bankruptcy due to scaling back of the employer’s operations. In order to lay off the employee, the employer must submit a cancellation application to the employee in a format which can be reproduced in writing and explain why the employment contract is terminated. 

In the event of a lay-off, the employer must observe the terms of advance notice specified in subsection 97 (2) of the Employment Contracts Act. The required term of advance notice depends on the length of the employee’s employment with the employer. The employer must give the employee advance notice of extraordinary cancellation if the employee’s employment relationship with the employer has lasted:

  • less than one year of employment – no less than 15 calendar days,
  • one to five years of employment – no less than 30 calendar days,
  • five to ten years of employment – no less than 60 calendar days,
  • ten or more years of employment – no less than 90 calendar days. 

The employer must keep in mind that if the period of advance given to the employee is shorter than laid down by the law or if the requirement to give advance notice is not observed, the employer must pay compensation to the employee. In this case, the employer must pay to the employee their average remuneration per working day for the calendar-based working days which remain within the period of advance notice and by which the period of advance notice given to the employee was shorter than required. 

In the event of termination of the employment contract due to a lay-off, the employer must pay the so-called redundancy payment to the employee in addition to the final settlement in the amount of the employee’s average remuneration for one month.

Can a lay-off be retracted to apply for compensation from the Unemployment Insurance Fund?

My employer submitted a notice for cancellation of my employment contract by laying off in March. Now, the employer said that they are retracting the cancellation notice because they can apply for a wage subsidy from the Unemployment Insurance Fund. I had counted on being laid off and have already found a new job. Can the employer simply withdraw the cancellation notice like that?

A notice for cancellation of an employment contract is an expression of will with a legal consequence – termination of the employment contract. Pursuant to subsection 69 (1) of the General Part of the Civil Code Act, an expression of will enters into force upon receipt This means that if the employee has received the cancellation notice submitted by the employer, it has become valid and the employment relationship will end based on the notice. Therefore, the employer can only retract a cancellation notice submitted to the employee with the employee’s consent and if the employee does not consent, the employment relationship will end by laying off as specified in the notice.

There is only one exception. An expression of will is not deemed submitted if the recipient of the expression of will receives an expression of will which withdraws the initial expression of will before or together with receiving the initial expression of will. This is, however, only possible in a situation in which the notice for cancellation of an employment contract is sent by e-mail or mail, i.e. the expression of will is communicated to a person who is not immediately present which provides an opportunity to react quickly and notify the recipient before arrival of the cancellation notice that the notice has been withdrawn. In most cases, however, there is not enough time for doing this and the notice for cancellation of the employment contract will become valid at the moment when it is received by the employee.

The employee’s consent, incl. signature is not required for a notice for cancellation of the employment contract to become valid. Receipt of the notice is sufficient and, in the event of a dispute, the employer must be able to prove that they have delivered the cancellation notice to the employee.

Can the employer declare a temporary lay-off / holiday without pay / an emergency situation / etc. to make the employees stay at home without pay?

If the employee has returned from a high-risk area, the employer and the employee must agree on how the employee will continue to work. The best option would be allowing the employee to work from home, i.e. agree on teleworking. If this is not possible, however, the parties must reach an agreement. 

The Employment Contracts Act does not regulate temporary lay-offs, but the employer and the employee may agree that the employee will stay at home for two weeks, for example. If the employee is not working because the employer does not provide work to the employee, the employer must pay to the employee average wages based on section 35 of the Employment Contracts Act. 

The parties must agree on holiday without pay. If an agreement is reached, the employee may use holiday without pay. If the employee does not agree to take a holiday without pay but the employer does not permit the employee to work, section 35 of the Employment Contracts Act will be applied. 

The employer and the employee can also amend the terms and conditions of the employment contract by an agreement between the parties. For example, the parties may agree that when the employee is at home and is not working, they will be receiving lower wages than agreed with the employment contract. The employer cannot do this unilaterally, though – the employee’s consent is also needed.

Can the employer change the holiday schedule and make special arrangements for paying the holiday pay? 

Under subsection 69 (4) of the Employment Contracts Act, holiday schedules may be changed by agreement between the employer and the employee. Therefore, if the employer and the employee reach an agreement on changing the holiday schedule, the holiday schedule can be changed in accordance with the agreement. 

Thus, if the employer wishes to shift the holidays of the employees to an earlier date so that they could take their annual leave right away, the consent of the employee is required, that is, the employee has the right to refuse. Considering the current situation, it would be wise for the employer and the employee to discuss all possible options in the employment relationship and find the best possible solution for both parties. 

The employer cannot lay down special rules for the payment of holiday pay and it must comply with section 70 of the Employment Contracts Act. The holiday pay is calculated on the basis of the average salary of the employee, that is, the salary they have earned in the last six months. If the employer pays the employee less holiday pay than prescribed by law, the employee has a claim against the employer for the payment of the holiday pay, which can also be referred to the labour dispute authority (i.e. the court or the labour dispute committee). The period for claiming holiday pay is four months from the time when the person became or should have become aware of the violation of their right (section 31 of the Employment Contracts Act).

My annual leave is in the summer. Will the amount of the wage subsidy be taken into account in the calculation of the holiday pay?

Pursuant to subsection 191 (5) of Regulation no. 130 of the Government of the Republic ‘Employment programme 2017–2020’, the wage subsidy is interpreted as a wage paid by the employer which is paid to the employee by the Unemployment Insurance Fund in the name of the employer and at the expense of the Unemployment Insurance Fund. Holiday pay is calculated based on the wage of the last six months before the holiday. Thus, as the wage subsidy is deemed the employee’s wage, it will be taken into account in the calculation of the holiday pay. 

My annual leave is in the summer. Will the reduced wage paid pursuant to subsection 37 (1) of the Employment Contracts Act be taken into account in the calculation of the holiday pay?

Holiday pay is calculated based on the wage of the last six months before the holiday. Thus, as the reduced wage is the employee’s wage, it will be taken into account in the calculation of the holiday pay.

May I refuse to go to work?

An employee’s obligation in an employment relationship is to work under the terms and conditions agreed. An employee who is returning from a high-risk area must, however, take into consideration the advice of the Health Board of the Republic of Estonia and stay at home for two weeks. This does not automatically mean that the employee is not required to go to work. The employee must notify the employer of the situation and agree with the employer on how they can carry on performing their duties. 

In addition to the possibilities discussed above (teleworking, holiday without pay, applying sections 35 and 37 of the Employment Contracts Act) it is possible to agree on the employee using their annual holiday. Once the holiday schedule has been drawn up, the dates of the annual holiday can only be changed by mutual agreement. If the employee does not wish to use their annual holiday, another solution must be found.

What does the employer have to do if the employee is unable to come to work due to mobility restrictions?

In this situation, it should be assumed that the work of the employee is prevented for reasons not attributable to them. This means that the employee has not created the situation due to which they cannot come to work. Thus, in the present case, section 38 of the Employment Contracts Act applies, in accordance with which the employer must pay average wages for a reasonable period of time if the employee is unable to perform the work for reasons not attributable to the employee. It is up to the parties to assess what is the reasonable time in this case, but it is certainly not justified to pay for the full time when the employee is not working. 

In this case, the parties must find mutually satisfactory solutions. For example, they can enter into an agreement for the employee to go on annual holiday or unpaid leave (or, for example, to give the employee tasks that could be done by teleworking). The parties to the employment relationship must adequately assess what is happening in the country, while also taking into account each other’s interests and thereby finding reasonable solutions. 

If my employer has reduced the wages to a minimum rate and my workload is very small, am I allowed to take on another position somewhere else? 

Pursuant to the Employment Contracts Act currently in force, it is not forbidden for an employee to work for several employers. Therefore, an employee is allowed to work for more than one employer at the same time. It is important to remember that the employee must be able to perform all the employment contracts they take on. Therefore, the employee must take into account that by working, for example, for two separate employers, they must be able to carry out the occupational duties for both of them.

If my employer is applying for the wage subsidy from the Unemployment Insurance Fund, can I temporarily work elsewhere in the same period?

Based on the current Employment Contracts Act, employees are permitted to work for several employers. Thus, it is possible for an employee to work for a different employer while their employer is applying for the wage subsidy. It is, however, important to keep in mind that the employee must be able to fulfil all contracts which they have entered into. This means that the employee must take into consideration that if they work for two employers, for example, they must perform their duties for both employers pursuant to the employment contracts. 

How to phrase the notice to employees about the payment of the average wage pursuant to section 35 of the Employment Contracts Act to apply for the wage subsidy?

Upon applying for the wage subsidy from the Unemployment Insurance Fund, the employer must submit proof that the employees have been notified about no work being provided to them and about the preservation of the average wage. It is not specified in the Employment Contracts Act that the employer must submit a notice to the employees about the application of section 35 of the Employment Contracts Act. Thus, a written notice (e.g. a decision or order by e-mail) which specifies that the employee will be receiving the average wage based on section 35 of the Employment Contracts Act in a certain period is sufficient.

My employer is forcing me to file a sick leave certificate, but I am not sick. Do I have to comply?

Pursuant to the information on the website of the Health Insurance Fund, a sick leave or a care leave certificate can be opened by a person who is sick or is taking care of a sick child or family member (continually in force for all illnesses). A person can also file a sick leave certificate if they have been in contact with a person carrying the coronavirus but have not yet displayed any symptoms themselves. Therefore, if an employee is healthy, they do not have the right to file a sick leave certificate, even if an employer is forcing them to do so.

If there are no real grounds for an employee to take a sick leave, they will lose their sickness benefits as well as their wages. Furthermore, the employer may later treat their absence as an absenteeism because the employee had no reason to refuse to perform their occupational duties.

More information on filing a sick leave certificate is available at https://www.haigekassa.ee/en/uudised/work-sick-leave-can-be-filed-online-temporary-measure-monday

Can the wages of healthcare professionals whose wages are fixed with a collective agreement be reduced pursuant to section 37 of the Employment Contracts Act to the minimum rate established by the Government of the Republic?

Pursuant to subsection 37 (1) of the Employment Contracts Act, an employer may, for up to three months over a period of 12 months, reduce the wages to a reasonable extent, but not below the minimum wage established by the Government of the Republic, if payment of the agreed wages would be unreasonably burdensome to the employer or if an employer, due to unforeseen economic circumstances beyond their control, fails to provide an employee with work to the agreed extent. 

Even though, in this case, the wages of employees are fixed in a collective agreement, an employer has the right to reduce the wages to a minimum rate as established by the Government of the Republic (584 euros per month, or 3.48 euros per hour) pursuant to section 37 (1) of the Employment Contracts Act. Whereas the circumstances described in subsection 37 (1) of the Employment Contracts Act are and must be extraordinary, e.g. they must meet certain conditions (economic circumstances beyond the control of the employer), it is also allowed to reduce the wages of employees whose wages are fixed under a collective agreement to a minimum rate established by the Government of the Republic. We will hereby bring your attention to the fact that pursuant to subsection 37 (3) of the Employment Contracts Act, an employee has the right to refuse to perform work in proportion to reduction of the wages.

If I get infected with COVID-19 at work, is it an accident at work or do I have to go on sick leave? 

An occupational accident is damage to the health of an employee or death of an employee which occurred in the performance of a duty assigned by an employer or in other work performed with the employer’s permission, during a break included in the working time, or during other activity in the interests of the employer. Damage to the health or death which occurred in the cases listed but which is not in a causal relation to the work of the employee or the working environment is not deemed to be occupational accident (subsection 22 (1) of the Occupational Health and Safety Act). Occupational accidents are considered to be so-called sudden health damage due, for example, falls, but also due to poisoning caused by the inhalation of chemical vapors. 

A disease, such as coronavirus, may be a work-related disease. Diseases related to work are divided into two – work-related diseases and occupational diseases. An occupational disease is a disease caused by a working environment hazard or the type of work mentioned in the list of occupational diseases. A work-caused disease is a disease caused by a risk factor in the working environment that is not considered an occupational disease. 

Coronavirus may be an occupational disease within the meaning of subsection 3 (7) of Regulation No. 66 of 9 May 2005 of the Minister of Social Affairs, ‘List of Occupational Diseases’, in accordance with which occupational infectious diseases and occupational parasitic diseases are other infectious and parasitic diseases caused by biological hazards of the working environment. Coronavirus would be classified under other occupational infectious diseases. 

If you suspect that your illness may be due to work, i.e. you got sick while performing your duties at work, tell your doctor. A family doctor or other doctor who suspects that the employee may have an occupational disease will refer the person to the occupational health doctor for diagnosis of the occupational disease. The occupational health doctor ascertains the employee’s state of health and collects data on the employee’s working conditions and the nature of the work. The decision as to whether the disease is due to work or not is made by the occupational health doctor.

An employee was sent on a business trip, but is unable to return after performing their occupational duties. Is the additional time spent abroad considered a business trip and is the employer obligated to keep paying the daily allowance? 

If an employee is sent on a business trip, the employer is obligated to pay the employee a daily allowance at least in the sum of an established minimum rate (22.37 euros) for the entire time the employee spends abroad. This obligation is in force under the current circumstances as well: if an employee is sent abroad to a location that is not their usual workplace, the employer is obligated to pay the daily allowance. This obligation remains in force even if the employee is not performing their occupational duties because the employer is unable to assign any (e.g. an employee is on a standby).

If an employee and an employer agree that the employee will use their vacation days while abroad (e.g. they agree to change the annual holiday schedule or agree on the employee taking unpaid leave) or the employee will telework abroad, then the employer is not obligated to pay the daily allowance.

Do I have to work from home after a business trip?

From 17 March, there will be a temporary restriction on border crossing for foreign nationals who do not hold an Estonian residence permit or right of residence. Estonian citizens and residents, among them holders of an alien’s passport, can enter Estonia but need to self-isolate. That means staying for 14 consecutive days at the address indicated on the health form filled out at the border crossing. Going to work during that time is strictly forbidden!

The advice of the Health Board: https://www.terviseamet.ee/en/covid19

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