Labour relations in Estonia

The relationship between employer and employee is mainly regulated by the Employment Contracts Act (in Estonian, it is called Töölepinguseadus). Work relations are also regulated with the Law of Obligations Act (Võlaõigusseadus), the Individual Labour Dispute Resolution Act (Individuaalse töövaidluse lahendamise seadus), and the Occupational Health and Safety Act (Töötervishoiu ja tööohutuse seadus).

All laws can be found on Riigi Teataja website (both in Estonian and in English).

The supervision of employers is done by the Labour Inspectorate. See more from their website.

To find employees, employers list job advertisements on their own website, use job-seeking sites (for example CV Keskus and CV), search on LinkedIn or even use some apps such as MeetFrank. For more experienced and senior positions, headhunters are often used.

Even though Estonian labour laws are quite liberal, the principle of protection is applied towards the employee who is considered the weaker party. This means that as a rule, agreements which include disadvantageous clauses towards employees, compared to what is set forth in legislation, are likely considered void.

Some general useful information about employment can be found on the web page of the Ministry of Social Affairs.

An Employment Agreement must be concluded in written form. Among other things, the employment contract must specify the employee’s working hours, salary, the method for calculation of the salary and procedures for paying the salary.

It is presumed that a full-time employee works 40 hours during a 7-days period, 8 hours per day. Certain flexible options exist for applying summarised working time calculation within a specified period of up to 4 months. Overtime is normally permitted upon an agreement between the parties, however, certain limits must be observed.

An employee is entitled to annual paid leave in the amount of at least 28 calendar days (in exceptional cases 35 calendar days).

The employer’s obligation is to calculate and withhold all payroll taxes monthly. The social security payment in Estonia is solely the responsibility of an employer.

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