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Contractual Penalties

Viimati uuendatud: 23.02.2017


In employment relationships, the employer is not entitled to freely apply penalties. The Employment Contracts Act provides only the four cases listed below to add the contractual penalty agreement to the employment contract:

  • Infringing the obligation to keep commercial and manufacturing secrets (ECA § 22);
  • Infringing the restriction of a competition agreement (ECA § 26);
  • Refusal to start working;
  • Leaving work with the aim of ending the occupational relationship as misconduct by the employee (ECA § 77).

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