Annotation

Booklet gives an overview of the legislation regulating working in Estonia.

- Kaia Alev

- WHICH CONTRACT SHOULD BE SIGNED FOR WORK?

- Employment contract and contract under the law of obligations

- Employment Contracts Act

- WHY IS IT BENEFICIAL FOR AN EMPLOYEE TO SIGN AN EMPLOYMENT CONTRACT?

- Employee’s rights under an employment contract

- Conditions established by law under an employment contract

- WHY IS IT BENEFICIAL FOR AN EMPLOYER TO SIGN AN EMPLOYMENT CONTRACT?

- Employer’s benefits under an employment contract

- SOCIAL GUARANTEES ARISING FROM AN EMPLOYMENT RELATIONSHIP

- Estonian Health Insurance Fund

- Working under an employment contract

- Working under a contract for services and an authorisation agreement

- Tax and Customs Board

- Estonian Unemployment Insurance Fund

- Estonian National Social Insurance Board

- For an employer

- Annex. Put your mind to it!

- Test your knowledge

Kaia Alev

Choose an employment contract

WHICH CONTRACT SHOULD BE SIGNED FOR WORK?

If the goal is to regulate the performance of a specific task (e.g. representation in court, holding a lecture), an authorisation agreement is signed.

If the achievement of a specific task for a specific date (e.g. installing a door, laying parquet) needs to be regulated, a contract for services should be chosen.

But if the goal is to regulate the process of achieving a result and manage activities, an employment contract should be signed.

Employment contract and contract under the law of obligations

In Estonia, the framework law for regulating all contractual relations is the Law of Obligations Act.

Relations under an employment contract are regulated by the Employment Contracts Act as a special law, but in addition, the provisions about the General Part of the Law of Obligations Act and an authorisation agreement are applied. An employment contract is a contract under the law of obligations, but not every contract under the law of obligations is an employment contract. Whether a contract is an employment contract or any other (e.g. contract for services, authorisation agreement, agency contract, etc.) depends on the intention of the parties and the nature of the contractual relationship.

A contract signed between the parties must indicate the actual intention of the parties – what they agreed upon as a result of negotiations. The title of a written contract, and sometimes even the content, is not always sufficient for determining the actual legal consequences of an agreement. If there is no written contract, the contractual relationship still exists.

The Employment Contracts Act stipulates that if work is done for remuneration, it is presumed to be an employment contract. However, if a person obligated to perform the work is to a significant extent independent in choosing the manner, time and place of performance of the work, the provisions concerning the employment contract are not applied to a contract.

The above means that if according to the work conditions agreed upon by parties, the employee is subordinate to the management and control of the employer, the provisions concerning employment contract are applied. However, under an employment contract, a person (employer) is obligated to prepare or change a thing or achieve any other result (work) agreed upon by providing a service and another person (contracting party) must pay remuneration for it.

Employment Contracts Act

All acts and other legal instruments adopted in the Republic of Estonia are available on the website www.riigiteataja.ee.

The Employment Contracts Act grants more extensive rights and better protection for an employee than other contracts under the law of obligations. These apply by default only in case of an employment contract and are not required by law for other contracts under the law of obligations, but are only agreed upon.

Work with an employment contract!

Employment contract

• Generally, signed for an unspecified term.

• The employee is subordinate to the management and control of the employer.

• Minimum wages have been established.

• Wages are paid monthly.

• The employer is responsible for the working environment.

• Right to holiday and holiday pay.

• Greater social guarantees.

Contract for services

• Generally, signed for a specified term.

• The contractor is free to choose the time and place of work.

• No minimum wages are established.

• Remuneration is paid upon execution of an order.

• The contractor is responsible for the work conditions.

• No holidays are prescribed.

• Health insurance is provided if social tax is paid on a service fee or fees in the amount of at least the minimum social tax requirement in a month.

WHY IS IT BENEFICIAL FOR AN EMPLOYEE TO SIGN AN EMPLOYMENT CONTRACT?

Employee’s rights under an employment contract

Agreed remuneration at least once a month.

The wages may not be lower than the minimum wage established by the Government of the Republic. From 1 January 2016, the minimum wage is 2.54 euros an hour or 430 euros a month in case of full-time work (2.78 euros an hour and 470 euros a month from 2017). The current minimum wage is indicated on the website of the State Gazette at www.riigiteataja.ee. Taxes and payments are withheld and deducted from the wages.

The equipment required for the agreed work, and in-service training at the expense of the employer.

The costs of courses developing the employee’s skills and knowledge and based on the interests of the company, and the average wages during the courses, are borne by the employer.

Example. Jaana is working under an employment contract. Her wages are based on piecework. The employer has established a wage system and introduced it to the employees upon entry into the employment contract. Jaana’s monthly wages depend on the amount of piecework done. However, the employer is obligated to pay Jaana monthly wages at least in the amount of the minimum wage, which must be notified to her. In January, Jaana’s wages were 525 euros. In February, she worked less due to the training period for the preparation of a new product, and earned only 190 euros. The employer had provided Jaana with work and the equipment required and calculated her wages for February to be 470 euros, which included her average wages for the in-service training completed during working time. Jaana’s husband Robert is working under a contract for services. He agreed with the contracting party that he would prepare ten large products by 1 March according to the specifications provided. Robert was supposed to obtain the materials on his own. But as the price of raw materials underwent a sudden change, the agreed remuneration for the order was not as profitable as expected for Robert. The difference between expenses and income, that is, Robert’s wages, was 100 euros, even though Robert worked for a whole month to get the result.

Break for dining and having a rest during the working day.

An uninterrupted break of at least 30 minutes (lunch break) is prescribed for a six-hour working time and is not included in the working time. The lunch break is included in the working time if due to the characteristics of the work it is impossible to give a break. Then, the employee is given the opportunity to rest and dine during working time.

Compensation for overtime work, night work and work done on public holiday.

Overtime work is exceptional work performed at the agreement of parties outside the agreed working time and must at least be compensated by paid free time to the same extent or in amount of 1.5 times the wages.

If the working time falls at night-time (from 22:00 to 6:00), the employer pays 1.25 times the wages for the work, unless it has been agreed that the wages include remuneration for working at night-time.

If the working time falls on a public holiday, the employer pays 2 times the wages for the work.

Safe working environment and regular medical examinations

In case of other contracts under the law of obligations, the service provider or the employee is responsible for safety, whereas if linked by an employment contract, the employer must assess the risk factors in the working environment with a risk analysis, instruct the employee on safety before commencement of work, provide the employee with personal protective equipment if necessary, etc.

Example. Jaana knows that the one-hour lunch break in her 12-hour shift as agreed in her employment contract is not included in working time and she will not receive remuneration for this. Jaana usually has lunch at a café and comes back to work by the end of the break. However, in the second half of tomorrow’s shift, Jaana needs to visit an occupational health doctor for a regular examination. Her employer arranged an appointment for her by the time of the last two hours of her shift and will include it in her working time. As an employer, Robert regulates his day on his own. If the deadline for an order is app¬roaching, there is often a lot to do and he misses his breaks. Some eve¬nings, Robert is rather exhausted, but an order needs to be completed by the deadline as prescribed in the employment contract. The earlier days off have now resulted in a fast work pace and there is no time for breaks within the working day. He as a contractor is not required to undergo a medical examination. The family physician has already warned Robert about some of the health problems arising and has suggested he pay more attention to his health.

Wages are paid even when work is not provided due to reasons not dependent on the employee.

In this case, average wages must be paid to an employee who is capable of working and ready to do work.

Right to take holidays and receive holiday pay or compensation for unused holiday days upon expiry of employment contract.

Under the conditions provided for in the Employment Contracts Act, an employee has the right to annual holiday, pregnancy and maternity leave, paternity leave, adoptive pa¬rent leave, child care leave, child leave and study leave.

The length of annual holiday in a calendar year is at least 28 calendar days. An employee with partial or no work ability is entitled to at least 35 calendar days of annual holiday. The annual holiday of educational staff is up to 56 calendar days.

The right to refuse to perform work during holiday, illness, etc. An employee is not required to make up for the working time lost for these reasons later.

Example. The employer stipulated in the employment contract informed Jaana of the holiday schedule for the current calendar year at the beginning of February. As Jaana has a child under 3 years of age, the employer considered her request to use up the six-day child leave with the annual holiday in July. For the time there was no work, the employer paid Jaana her average wages. When Jaana fell ill, her time away from work due to incapacity for work from the fourth until the eighth day was compensated by the employer and from the ninth day onward by the Health Insurance Fund. Robert, however, can take a holiday when there is a seasonal break in the orders. At times, this is an indeterminate period of time, which is why he cannot make any long-term plans. Robert’s holidays are not compensated as his contracts for services do not contain an agreement on when he is exempt from having to execute the orders. The contracting parties are not interested in signing such an agreement. At the time when there are no orders, when Robert is ill or on holiday, he will have no income. The paid paternal leave adopted in 2013 did not apply to Robert because of the contract of services.

Paid free time for finding new employment.

In case of extraordinary cancellation of the employment contract, the employer is obligated to grant the employee within the period of advance notice time off to a reasonable extent to find new employment. This time is compensated by paying the employee his/her average wages.

Similarly, the employer is obliged to grant time off for the employee to a reasonable extent and for the average wages of the employee when the employee needs to be away from work due to an unforeseen reason not arising from the employee, or when it does, then unintentionally and not due to gross negligence (e.g. child falls ill in nursery school and needs to be taken home; water accident at home).

Conditions established by law under an employment contract

Contract presumably signed for an unspecified term.

Guarantees both for the employee and the employer that the cooperation will continue. However, a contract can be signed for a specified term when justified by the temporary characteristics of the work – mainly due to temporary increase in the work load or in case of seasonal work, but also in order to substitute an employee who is temporarily away.

Default probation period for assessing an employee’s skills and capacities.

Unless agreed otherwise, a four-month probationary period is applied upon the commencement of work, or in case of a specified-term contract signed for up to eight months, a probationary period of not more than half of the validity of the contract is applied.

Working and rest time limits to guarantee regular rest and preservation of health.

As the employee is subordinate to the management and control of the employer, the law establishes limits on the length of the employee’s working day and obliges the employee to rest every day and every week.

Generally, 11 hours of consecutive rest time must be left in between working days and each seven-day period must include 48 hours of consecutive weekly rest time (36 hours if calculating summarised working time).

Limits on work for minors

To sign an employment contract with a minor, the consent of his/her legal representative (parent) is needed. According to the law, full-time work is shortened for an employee under 18 years of age and the daily rest time is prolonged according to the age.

Example. During summer vacation, Jaana’s oldest son, 16-year old Martin, is working under an employment contract as a customer attendant in an ice cream shop near their home. As Martin graduated from basic school in the spring and is no longer subject to the obligation to attend school, he is allowed to work the whole vacation through. Last summer, he had not graduated yet and so he only worked for half of the vacation and rested the rest of the time. When Martin was 13, he worked during his summer holiday under a contract for services as an ice cream seller at the beach. He worked hard on the hot and even rai¬ny summer days as he made money on each ice cream he sold. The ice cream box was heavy, the days long and exhausting and often, he did not get the remuneration he had hoped for.

Validity of employment contract in case of transfer of enterprise.

If an enterprise changes owners, but continues the same or similar economic activities, employment contracts are transferred to the transferee of an enterprise unamended. A transferor and transferee of an enterprise are prohibited from cancelling an employment contract due to the transfer of the enterprise and the conditions of the employment contract are only amended by agreement.

Grounds for cancelling the employment contract, and terms for advance notice upon expiry of contract.

The terms for advance notice that are expected to be followed when cancelling the employment contract depend on the reasons for the cancellation and the length of the employee’s employment relationship with the employer.

An employer must give advance notice of the 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 and more years of employment – no less than 90 calendar days.

Only the employee has the right to ordinary, that is, unfounded cancellation of the employment contract. The employee is expected to give advance notice of at least 30 calendar days to the employer.

The employee may cancel the employment contract extraordinarily effective on the same day for good reason arising from the employee or employer. However, if possible, it is reasonable to give advance notice, considering the employer’s need to make reorganisations in the work.

During the probationary period, both parties are obligated to give notice of the cancellation of the employment contract at least 15 calendar days in advance.

Additional compensation in case of extraordinary cancellation of employment contract.

Upon lay-off, the employer pays the employee compensation to the extent of one month’s average wages of the employee. The employer pays compensation in the same extent to an employee who cancels his/her employment contract when the employer temporarily (for up to three months) reduces his/her wages because there is no work to provide to the employee due to unforeseen economic circumstances beyond its control.

An employee who is raising a child under three years of age or the employees’ representative have the preferential right of keeping their job. From the list of employees to be laid off, the employer must first exclude parents of small children, employees’ trustees and working environment representatives. When cancelling the employment contract of the employees’ representative, the employer must first ask the opinion of the employees and give them feedback if their opinion was not taken into account.

It is prohibited to lay off an employee who is pregnant or a woman who has the right to pregnancy and maternity leave or a person who is using the child care leave or adoptive parent leave. In such cases, the employee may only be laid off in case of the bankruptcy or liquidation of the company.

Specifications for set-off.

Without the consent of the employee, the employer may withhold from the employee’s wages only the wages for unearned annual holiday and any advance payment made to the employee that the employee must return to the employer. The consent for set-off must be obtained separately for each case in a format that can be reproduced in writing; by e-mail, for example.

Example. Before Jaana took pregnancy and maternity leave with her youngest child, her employer notified her of the need to reorganise the work and lay off some of the employees due to the deteriorating economic situation. At that, Jaana notified her employer of her early pregnancy, so it was not possible to lay her off. After interrupting the child care leave two years later, Jaana was provided with the work agreed upon earlier as the employer’s economic situation had improved. If there had been less work than before, the employer should have laid off another employee who was doing the same work. The employer must guarantee the agreed work for Jaana as her youngest child is not yet 3 years of age. In his contracts for services, Robert has deadlines agreed with the contracting parties, which are not affected by the fact that Robert is the father of a child under three. If a contracting party no longer needs to work with Robert, he/she can cancel the contract regardless of Robert’s family duties.

WHY IS IT BENEFICIAL FOR AN EMPLOYER TO SIGN AN EMPLOYMENT CONTRACT?

Employer’s benefits under an employment contract

An employee must perform his/her obligations before the employer loyally (incl. maintain a business secret and observe the agreement on the restraint of trade). An employee is obligated to maintain (incl. without an agreement) a business secret the content of which has been communicated to him/her by the employer. An employer can agree with the employee upon the application of the restraint of trade clause for up to one year even after the expiry of the employment contract.

An employee must perform the work agreed upon and fulfil the obligations arising from the characteristics of the work, and do the work in the agreed volume, in the agreed place and at the agreed time.

During the working time agreed upon, the employee is subordinate to the management and control of the employer. The working conditions must be agreed upon with the employee in sufficient detail or at least notified to him/her.

An employee must perform his/her work duties outside the agreed place of work on a business trip for up to 30 days or longer if so agreed.

A pregnant woman and an employee raising a child under three years of age or a disabled child may be sent on a business trip only with his/her consent. An employee who is a minor may be sent on a business trip only with the prior consent of the minor and his/her legal representative.

In case of an employee’s business trip, the employer pays tax-free daily allowance to the employee. The employer can also pay tax-free compensation (to the extent of the allowed limit) for the employee’s personal car used for performing work duties if so agreed.

Example. Jaana is working according to a working time schedule prepared by the employer based on the work organisation needs. The employer has described an employee’s work duties in Jaana’s job description and the working time organisation and other intracompany rules in the work organisation rules. Therefore, both Jaana and her employer know the obligations and liabilities of both parties. The employer has agreed with Jaana on the application of the restraint of trade clause, i.e. Jaana is not allowed to work for a competitor. Jaana has also been notified of the content of a business secret and must maintain its confidentiality. Robert makes his own rules and if he fails to deliver an order on time, the contracting party can demand the agreed compensation from him. The contracting party is unable to monitor his working time. Also, Robert has no duty to maintain business secrets and may have contracts with competing companies.

An employee must comply with the employer’s lawful instructions related to the agreed work duties in a timely and precise manner.

An employee must participate in a course for the improvement of vocational knowledge and skills, which is organised by or where he/she is directed to by the employer based on the interests of the company.

An employee must refrain from any damaging actions that hinder other employees from fulfilling their obligations.

This includes actions that damage the life, health or property of the employee or other persons; also, actions that damage the employer’s reputation or cause distrust by customers or partners towards the employer. During working time, an employee must behave and act reasonably, taking into account the interests of others.

An employee must work with other employees for the purpose of performance of duties.

Teamwork in work processes is very important and often unavoidable and must be taken into account by the employee.

An employee must immediately notify the employer of an impediment to work or of the threat thereof and, if possible, eliminate such an impediment or threat without a special instruction.

The employee must also act towards making sure that the work organisation is efficient and safe.

At the request of the employer, the employee must notify the employer of all significant circumstances relating to the employment relationship with regard to which the employer has a legitimate interest.

In obtaining such information, the employer must act in good faith and contemplate whether there is a real need for requesting such information.

An employee must notify the employer at the earliest opportunity of his/her temporary incapacity for work and, where possible, the presumed duration thereof.

For work organisation purposes, it is essential that the employer be informed of an impediment at the earliest opportunity. So the employer can plan the personnel resources, an employee must inform the employer of his/her absence and present a document indicating the reason (e.g. certificate of incapacity for work).

An employee must fulfil his/her obligations personally.

If upon executing an order or mandate, a result (product or service) complying with any specific criteria is important; a specific employee is subordinate to the employer during the working time established in the employment contract. The law provides the parties with an option to agree upon the use of a third person.

Example. Jaana is a good employee whose skills are appreciated by the employer. This is why it is important for the employer that Jaana would perform the agreed work. The employer knows that her contribution will yield high-quality work results. Robert’s customers are interested in receiving the agreed production on time and in the correct quantity and quality. The contracting party does not know who does it and where and how.

The employee assumes proprietary liability for the damages caused to the

employer.

Damage caused wrongfully must be compensated, but the employee who is responsible for defective work must also assume liability. In case of defective products, the employer has the right to reduce the wages.

Do not forget!

A contract for services is not an employment contract!

With a contract for services, the law does not prescribe:

• an employment relationship for an unspecified term;

• a minimum wage;

• limits on working and rest time;

• right to holiday and holiday pay;

• work equipment and in-service training;

• right to compensation for working on a public holiday, for overtime work and night work;

• employer’s obligation to ensure a safe working environment and personal protective equipment.

SOCIAL GUARANTEES ARISING FROM AN EMPLOYMENT RELATIONSHIP

Estonian Health Insurance Fund

The validity of health insurance can be checked in the State Portal www.eesti.ee or the information line of the Health Insurance Fund (+372) 669 6630.

Working under an employment contract

The right to health insurance is granted to an employee working under an employment contract with a term of more than one month or an employment contract with an unspecified term.

The data received from the employers for insuring the employees and suspending or terminating the insurance are forwarded by the Tax and Customs Board from the employment register to the Health Insurance Fund.

An employee’s health insurance is granted after a 14-day waiting period since the date of commencement of work as entered in the register. If the date of commencement of work as entered in the register falls in the period of valid health insurance, the health insurance will continue on the new grounds without an interruption. Commencement of work must be registered by the employer in the employment register by the moment of commencement of work at the latest.

The health insurance of persons insured as employees expires two months after the date of cessation of work as entered in the employment register. If an employer has not formalised health insurance for a person and as a result, a person cannot get the required health service or compensation, the employer is required to compensate the damages.

Working under a contract for services and an authorisation agreement

On 1 January 2016, in the Health Insurance Act, the provisions were amended that regulate the insurance cover conditions of persons receiving remuneration or service fees on the basis of a contract under the law of obligations and of members of the management or controlling bodies of legal persons.

A new health insurance cover system applies to them, according to which the commencement and suspension of insurance cover is related to the submission of the declaration of income and social tax, unemployment insurance premiums and contributions to mandatory funded pension to the Tax and Customs Board, and in order to receive the insurance cover, social tax must be declared for the person for at least a month based on the monthly rate established for the budget year with the state budget. Insurance cover is granted if the minimum social tax has been declared when working under one or several contracts under the law of obligations or being a member of the management or controlling bodies of one or several legal persons.

Insurance cover is granted after the submission of the declaration and suspended if the minimum social tax requirement has not been fulfilled by the time of submission of the next declaration. In case of this insurance type, the 14-day waiting period or a 2-month warranty period that applies to employees working under an employment contract are not applied anymore. The insurance cover is not suspended for the time in which a person has the right to benefits for temporary incapacity for work (e.g. sickness benefit, maternity benefit, etc.).

The employer is required to declare the social tax by the 10th date following the payment of income and social tax, unemployment insurance premiums and contributions to mandatory funded pension. If the documents necessary for the insurance cover to commence are not submitted on time and the person applying for insurance cover would have had the right to health insurance benefits if such documents had been submitted on time, the person who violated the obligation must compensate the loss incurred due to the failure to receive the health insurance benefits.

More information Website of the Estonian Health Insurance Fund www.haigekassa.ee

Information line (+372) 669 6630 (Mon–Fri 8:30–16:30)

E-mail info@haigekassa.ee

Tax and Customs Board

All physical and legal persons offering work are obligated to register their employees in the employment register. All work by physical persons must be registered if it creates a tax liability in Estonia, and regardless of the form and duration of the contract. As an exception, information must be entered in the employment register about persons who do voluntary work in a company and for a sole proprietor.

A person’s work must be registered by the moment of commencement of work by the person at the latest. This means that the person can be registered on the same day as well, but he/she must be registered by the time of commencement of work.

The taxes (social tax, income tax) and payments (unemployment insurance premium, contribution to mandatory funded pension) paid on and withheld from the payments made to a physical person working under an employment contract or any other contract under the law of obligations by a legal person or a sole proprietor who is an employer must be declared and paid by the person who made the payment. An exception to this is the case where the recipient of the payment is a sole proprietor entered in the commercial register as an entrepreneur.

A physical person who is an employer (who is not a sole proprietor) must withhold, declare and pay taxes and payments on the payments made to another physical person only in relations under an employment contract. If a physical person has made a payment on the basis of a contract under the law of obligations, income tax must be paid on it by the recipient of the payment together with the submission of the income tax return. At the same time, a physical person is obligated to pay social tax and payments (unemployment insurance premium, contribution to mandatory funded pension) on the remuneration or service fee paid under any other contract under the law of obligations.

More information about registering employment and calculating the taxes related to the payment of remuneration is available on the tax authority’s website at www.emta.ee.

The person making the payment declares the taxes and payments with¬held and calculated from the payments to the Tax and Customs Board on form TSD by the 10th date of the month follo¬wing the payment. Also, by this date, the taxes and payments are transferred to the bank account of the Tax and Customs Board.

An employee can check whether his/her employment has been registered and whether the payments made to him/her are declared and taxes paid. A person can check his/her registration, the payments and the declaration thereof in the e-Tax/e-Customs column of the Tax and Customs Board by entering as a private client and choosing “Data from employers”.

If it appears that the remuneration paid has not been declared or has only partially been declared, the tax authority must be informed.

Any cases of undeclared income can be notified to the tax authority:

• 24/7 on the information line 800 4444, which is free of charge for the caller;

• hinting by e-mail: vihje@emta.ee.

When giving a hint, it is recommended to define the circumstances of an incident as precisely as possible. The more detailed the hint, the faster the tax authority can respond and put an end to the illegal activity. It is also recommended to add contact data so the tax authority can specify any circumstances if necessary.

The hints received are analysed and tax proceedings organised if necessary. Should it appear during the tax proceedings that the employer has not submitted the re¬quired data to the tax authority, has submitted false data or breached the obligation to withhold, the employer may be penalised with a fine of up to 13,000 euros.

Additional information

Website of the Tax and Customs Board: www.emta.ee

Information line 181120

Estonian Unemployment Insurance Fund

An employee working under an employment contract has the right to receive insurance benefits in case of a lay-off if the employment relationship has lasted for at least five years and the employment contract has been cancelled due to a lay-off or on the grounds stipulated in subsection 37(5) of the Employment Contracts Act (cancellation of employment contract upon reduction of wages).

In case of the insolvency of the employer, an employee who has been working under an employment contract has the right to receive benefits from the Estonian Unemployment Insurance Fund, which guarantees the employee the remuneration and holiday pay not received due to the insolvency of the employer, as well as other benefits not received upon cancellation of the employment contract, but which are prescribed by the Employment Contracts Act. The declaration of the employer’s bankruptcy and the termination of the proceeding of a bankruptcy petition due to abatement are deemed to be the employer’s insolvency.

Additional information

Website of the Estonian Unemployment Insurance Fund www.tootukassa.ee

Information line 15 50121

Estonian National Social Insurance Board

For an employee

The employer pays social tax for an employee working under an employment contract. The tax paid will be a basis for the employee’s parental benefit and in the future, for the amount of pension. The social tax paid, the accumulation period collected and the annual coefficients can be checked in the portal www.eesti.ee in the tab “Services / For a citizen / Family / Viewing the e-notice of the State Pension Insurance Registry”.

For an employer

The state compensates an employer for an employee working under an employment contract for the following:

• the holiday pay of an employee with a partial or total incapacity for work for a part of holiday which exceeds the 28 calendar days of the annual holiday;

• the holiday pay of an employee receiving pension for incapacity of work or national pension for incapacity of work for a part of holiday that exceeds the 28 calendar days of the annual holiday;

• paternity leave compensation (for up to 10 days);

• child care leave compensation (for up to 6 days);

• disabled child care leave benefit.

Additional information

Website of the Social Insurance Board www.sotsiaalkindlustusamet.ee

Information line 16 106 (Mon–Fri 9:00–17:00)

Calling from abroad +372 612 1360

Annex. Put your mind to it!

The terms listed below can be found in the word search grid. Each term reads in a straight line horizontally, vertically, or diagonally. From unused letters reveals the answer.

AGREEMENT, APPLICANT, BENEFIT, BUSINESS, CONTRACT, DEADLINE, EMPLOYEE, HEALTH CHECK, INSTRUMENT, LOCATION, MENTOR, PENALTY, PROPERTY, SAFETY, TEAMWORK, TRAINING, WORK PLACE

Test your knowledge

Test your knowledge by answering the following questions with YES or NO.

1. Is an employment contract a contract under the law of obligations?

2. Is an employment contract presumed to be signed for an unspecified term?

3. If an employment contract has not been signed in writing, but the employee is performing his/her work duties, is an employment contract deemed to be signed?

4. Does an employee have the right to refuse to perform work during holidays?

5. Is execution of an order an obligation taken on under a contract for services?

6. Is the contracting party wrong in thinking he/she has the right to guide the executor of the order who is working under a contract for services, and to organise his/her working time and to supervise him/her?

7. Is an employee working under an employment contract entitled to wages at least once a month?

8. Is the probationary period applied even when not agreed upon in the employ-ment contract?

9. Is the employer obligated to give advance notice to the employee of the extra-ordinary cancellation of the employment contract?

10. In case of the cancellation of an employment contract due to a lay-off, is the employee entitled to paid time off for finding new employment?

11. When linked by an employment contract, is the employer responsible for ensuring a safe working environment?

12. Is it prohibited to lay off an employee who is preg¬nant unless the company is going bankrupt or being liquidated?

13. Is an employee obli¬gated to notify the employer at the request of the employer of all significant circumstances relating to the employment relationship with regard to which the employer has a legitimate interest?

Correct answers

A riddle: an employment contract can only be amended by agreement between parties. Those who are more knowledgeable know that it is section 12 of the Employment Contracts Act.

Knowledge test: all questions must be answered with a YES. If you answered NO even once, please read the information booklet again!

Table of Contents

Kaia Alev Choose an employment contract

WHICH CONTRACT SHOULD BE SIGNED FOR WORK?

Employment contract and contract under the law of obligations

Employment Contracts Act

WHY IS IT BENEFICIAL FOR AN EMPLOYEE TO SIGN AN EMPLOYMENT CONTRACT?

Employee’s rights under an employment contract

Conditions established by law under an employment contract

WHY IS IT BENEFICIAL FOR AN EMPLOYER TO SIGN AN EMPLOYMENT CONTRACT?

Employer’s benefits under an employment contract

SOCIAL GUARANTEES ARISING FROM AN EMPLOYMENT RELATIONSHIP

Estonian Health Insurance Fund

Working under an employment contract

Working under a contract for services and an authorisation agreement

Tax and Customs Board

Estonian Unemployment Insurance Fund

Estonian National Social Insurance Board For an employee

For an employer

Annex. Put your mind to it!

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