European Trade Union Institute, ETUI.

Accueil > Reforms Watch > Estonia > Industrial relations in Estonia: background summary

Industrial relations in Estonia: background summary

  • The Estonian industrial relations system was created at the beginning of the 1990s. Industrial relations are regulated by the Trade Unions Act (Ametiühingute seadus), the Employees’ Trustee Act (Töötajate usaldusisiku seadus), the Collective Agreements Act (Kollektiivlepingu seadus) and the Collective Labour Dispute Resolution Act (Kollektiivse töötüli lahendamise seadus).
  • Over the years, only a few amendments have been made to the legislation. For example, since 2007, Estonia has had a dual channel of employee representation, meaning that employees can be represented by a trade union and/or employee trustee. As of 1 May 2012, a party to a collective agreement has the right to unilaterally terminate the agreement once it has expired; previously, the agreement would automatically remain in place until a new agreement was signed.
  • In 2013 and 2014, the government and social partners discussed new legislation on collective bargaining and collective dispute resolution. However, no agreements were reached and the topic has not been brought up again.
  • There are no official representativeness criteria for social partners. According to the Trade Unions Act, a trade union may be founded by at least five employees and a federation of trade unions may be founded by at least five trade unions. There are no criteria for employers’ associations. Collective agreements can be extended to cover wages, working time and rest time conditions in the case of multi-employer agreements, i.e. if the agreement is concluded between an association or federation of employers and an association or federation of employees, or between a confederation of employers and a confederation of employees.
  • The main trade union confederations are the Estonian Trade Union Confederation (Eesti Ametiühingute Keskliit, EAKL) recognised as a national-level social partner, and the Estonian Employees’ Unions’ Confederation (Teenistujate Ametiliitude Keskorganisatsioon, TALO). EAKL is the biggest trade union in Estonia, uniting 18 trade unions and representing around 21,200 employees altogether. TALO represents mostly cultural workers and civil servants, uniting seven trade unions and representing around 3,000 employees altogether.
  • Trade union membership levels have been rather low and continuously decreasing over the years. In 2015, 7% of employees were members of trade unions (Estonian Work Life Survey 2015). The share was higher among employees in the non-governmental, non-profit sector (17%) and in the public sector (12%), while lower in private sector organisations (5%). Everyone has the right to join a trade union, except members of the Defence Forces.
  • The main employers’ organisation is the Estonian Employers’ Confederation (Eesti Tööandjate Keskliit, ETKL) recognised as a national-level social partner and representing around 25% of Estonian companies directly and through member associations.
  • The collective bargaining system has always been decentralised in Estonia, as it mostly takes place at company level. Sectoral-level collective bargaining takes place in two sectors, healthcare and transport. At the sectoral level, only the issues related to wages, working time and rest time are agreed on. TALO and the Ministry of Culture have concluded wage agreements, which are binding for public sector cultural workers, but include also a clause that it is recommended for the private sector as well. At the national level, EAKL and ETKL negotiate on the national minimum wage, with any changes then brought into effect by governmental decree.
  • Collective bargaining coverage has also decreased. According to the 2009 Estonian Work Life Survey, 33% of employees were covered by a collective agreement, while 5% said they did not know whether they were covered or not. The survey also indicated that about 6% of companies had concluded a collective agreement. In 2015, the same survey showed that 19% of employees were covered by such an agreement, while 28% did not know whether they were covered or not. In 2015, 4% of companies had concluded a collective agreement.
  • In addition to trade unions, employees can also be represented by an employee trustee. Trade union representatives are elected from among the trade union members, while employee trustees are elected by the employees at a general meeting in the company. Both may be present in a given company at the same time; however, the trade union has the priority right to take part in collective bargaining and collective dispute resolution. Employee trustees mainly operate in the area of information and consultation procedures. If no trade union exists in the company, the trustee has the right to conclude agreements or represent employees in collective dispute resolution.
  • According to the Estonian Work Life Survey, there was an employee trustee in 13% of companies in 2009 and in 18% of companies in 2015. A trade union was existent in around 6% of companies in both years.
  • Employees are also represented by a working environment representative, who is a representative in occupational health and safety (OSH) issues (monitoring the implementation of OSH measures, participating in the investigation of an occupational accident or disease, informing employees, etc). In a company with 10 or more employees, the employees elect one working environment representative from among themselves; where there are less employees the employer is required to consult with the employees. In companies with 50 or more employees, the employer has the obligation to set up a working environment council, consisting of an equal number of representatives of the employer and the employees (altogether at least four members). The council regularly analyses working conditions, participates in the preparation of the company’s OSH development plan, analyses occupational accidents etc. The rights and obligations of the working environment representative and council are stipulated in the Occupational Health and Safety Act (Töötervishoiu ja tööohutuse seadus).
  • The Community-scale Involvement of Employees Act (Töötajate üleühenduselise kaasamise seadus) provides for the legal bases for the establishment of a European Works Council or a procedure for informing and consulting at the level of Community-scale undertakings or Community-scale groups of undertakings. However, information about the purpose and functioning of European Works Councils is not readily available in Estonia.

The system of tripartite concertation is not specifically regulated in Estonia. Social partners take part in the consultation phase of drafting legislation and they are also members of the supervisory boards of the Estonian Health Insurance Fund (EHIF), the Estonian Unemployment Insurance Fund (EUIF), and the Estonian Qualification Authority (EQA).  Social partners are active in making proposals and promoting their ideas, whether in formal consultations or through their own initiatives. However, they have quite often expressed dissatisfaction with the government’s level of engagement with them or with the extent to which their proposals are taken into account. This dissatisfaction was especially visible during the economic crisis. There have also been cases where a tripartite agreement was reached but later changed unilaterally by the state (for example regarding unemployment benefit rules, unemployment insurance premiums, etc.).