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Concluding the Contract of Employment

Viimati uuendatud: 16.02.2017


The employer and employee conclude a contract of employment if they have come to an agreement in all important conditions. The employment contract does not have any mandatory conditions; the significant clauses shall be determined by the employer and employee, considering the specific employment relationship. Contract of employment is only valid if it has been unilaterally drawn up by the employer and signed by the employee.

According to legislation, the employer must notify about the working conditions in the employment contract or some accompanying document prior to beginning work. It is important to distinguish conditions that the parties have agreed on and information shared with the new employee. For instance, parties agree on the remuneration and the new employee is informed about the existing collective agreement. Conditions that the parties agree on can only be changed on mutual agreement.

The employer must, at the minimum, include clearly and unambiguously the following data in the contract of employment:

  • Name of the employer and employee;
  • Registry or personal identification codes;
  • Place of residence or activity;
  • When the contract was concluded and when shall the employee start working;
  • Description of job tasks;
  • Remuneration payment time or salary day;
  • Working time;
  • Working place;
  • Vacation duration;
  • Notification deadlines for terminating the employment contract;
  • Work organization rules;
  • Valid collective agreement.

In addition, the employer is obliged to inform the employee of any special conditions, e.g. non-application of the trial period, aggregated working time, term of the employment relationship and reasons for applying it.

If necessary, the contract may also contain notions or specific explanations so that working conditions would be understood the same way. The employee has a right to ask for supplementary explanations if something remains unclear.

The contract must not contain direct references to laws, except reference to the contract termination notification deadline (if not explained in detail). The remaining aspects are regulated in the contract according to the abovementioned or as agreed. If the contract does not state otherwise, the vacation length, trial period duration, full-time work etc. are defined by the Employment Contracts Act. However, this does not free the employer from the obligation to formulate the conditions in writing.

If parties conclude the employment contract, it is important to know that agreements unfavourable to the employee are invalid, except those permitted by legislation.

Unfavourable agreements are, for instance, remuneration under the set minimum, too wide workplace identification (e.g. Estonia or Europe, even though the work presupposes sitting constantly in a specific office), annual vacation shorter than 28 days, longer notification times, etc. The overtime obligation cannot be agreed on in the contract of employment as it always requires a separate agreement. It can also not be agreed that remuneration includes overtime pay or pay for working on a national holiday.

The employer can also list, if the parties agree, all benefits (company car, company phone, etc.) and additional benefits like health days, additional vacation, etc., into the employment contract or some accompanying document.

The employment contract is signed in two copies, one for the employee and the other for the employer.

If the employee starts working without concluding a written agreement, a contractual relationship is still formed with the employer and the Employment Contracts Acts applies for both parties.

Prior to signing the contract, all important aspects must be discussed, like work tasks, remuneration, place of working, and check that the contract contains all of them as well.

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