Estonia’s new employment contract law did not bring about spate of layoffs – study

27 February 2013

The new Employment Contracts Act that stepped into force in Estonia in 2009 did not have a significant impact on employers’ redundancy behavior, it appears from a survey commissioned by the Social Affairs Ministry.

The majority of layoffs took place during the economic crisis before the new law became effective, spokespeople for the Social Affairs Ministry said.

“More flexible labor legislation makes it possible to preserve, create and restore jobs. This in turn has contributed to the fast fall in unemployment,” Social Affairs Minister Taavi Rõivas said.

The survey showed that people are satisfied rather than not with redundancy package measures which include a statutory notice period and entitlement to redundancy pay, unemployment insurance benefit and unemployment allowance.

Around 80 percent of employers and employees find that they need to know more about labor laws, the survey showed. It also turned out that one out of five employees would do nothing if a problem emerged in his employment relationship or would quit the job without trying to solve the problem.

The social affairs minister emphasized that the rights of employees and employers must be protected. If people are not well enough informed they either won’t dare or know how to seek solutions when problems crop up at work. “The study confirms that more attention needs to be paid to informing the public. We will definitely continue information work together with the Labor Inspectorate. For example, a revised edition of the handbook on the Employment Contracts Act will be published soon which will be of help to employees and employers alike,” Rõivas said.

The minister also pointed out that it is possible to consult with lawyers of the Labor Inspectorate over employment relationship-related problems.

The Social Affairs Ministry ordered two analyses of the implementation of the Employment Contracts Act. The Praxis think tank, center for applied research CENTAR and research company Turu-uuringute AS carried out the study of the law and the University of Tartu examined labor disputes that occurred during that period. The studies were co-financed by the European Social Fund.

Source: Estonia's new employment contract law did not bring about spate of layoffs - study, PM