Labour Law Reform in Re-independent Estonia
| Author | Inge-Maret Orgo |
| Pages | 99-109 |
Inge-Maret Orgo
Labour Law Reform in Re-independent Estonia
Amendment to Estonian labour laws and other regulations that governed employment relationships began already in the late 1980s before Estonia won restoration of its independence in 1991. At that time, the Estonian SSR Labour Code was in effect; it was passed by the Supreme Council of the ESSR on 5 July 1972 and was repeatedly amended thereafter. The Code, just like those of the other Soviet republics of the time, was based on labour legislation of the Soviet Union and was characterised by a strict regulation of employment relationships by the state. Employers were state-owned enterprises mainly and the relationships with their employees were prescribed in detail by the state. In many matters these details were not even prescribed by laws but by secondary legislation of general application such as regulations by the Council of Ministers, ministries or agencies. Although in those days, like today, workers were employed on the basis of employment contracts, the terms of such employment contracts were predetermined by legislation. The parties to a contract had virtually no flexibility to shape the contract conditions by negotiation because the employer had to proceed from the rules in effect and was not free to make decisions. A person was formally employed by order of the director of an enterprise and the order included the employment conditions for the employee. Thus, to a great extent, the procedure for conclusion of an employment contract was purely formal.
Estonian labour legislation did not correspond to the political and economic situation that had developed in Estonia by the end of the 1980s when the decision was made to restructure the economy through the development of free enterprise and future privatisation of state-owned enterprises. In 1989, on the initiative of the Supreme Council of the Estonian SSR, a committee was formed for revision of the valid labour legislation of the time, with the purpose of obtaining proposals for its amendment. Lecturers of labour law from the Law Faculty of the University of Tartu, specialists from relevant ministries and agencies and representatives of trade unions participated in the work of the committee. The committee made numerous proposals for improving labour legislation.
Parallel to the work of the above-mentioned committee, the Ministry of Justice asked the author of this paper to prepare a development plan for Estonian labour law. Other labour law specialists from the University of Tartu were also involved in this project. The development plan was settled in 1990, when Estonia still belonged to the Soviet Union. As the first stage of amendments to labour legislation, the plan foresaw the drafting and adoption of several bills, and after 3-4 years and only then, the drafting and enactment of a Labour Code.
Labour law reforms began with regulation of the major areas of labour law mainly through the adoption of individual laws. This was due to the fact that when the development plan was being prepared, the political status of Estonia was ambiguous and trends in the economy still uncertain. It would have been impetuous to start drafting a new Labour Code in that situation. At the same time, in several spheres the need for regulation of employment relationships had become imperative in order to prevent hindrances to the planned economic reforms. This was especially true concerning the legal aspects of an employment contract, but also with respect to the legal regulation of working hours and rest time, wages, and collective employment relationships.
According to the general principles of the labour law development plan, the decision was made to extend the scope of labour law. Soviet labour law did not extend to members of collective farms and to several other categories of employees. According to the development plan, Estonian labour law was to regulate the employment relationships of all persons who were performing work for an employer under the directions and control of the employer, regardless of the ownership relations in the enterprise or organisation. One of the general principles of the development plan was that the role of the state in the regulation of employment relationships was to be decreased and the determination of the rights and obligations of the parties to an employment contract by negotiation via collective agreements and individual employment contracts was to be increased. Elimination of regulation of employment relationships by rules and regulations of ministries and agencies was also considered an issue of particular importance. This point of view was later confirmed by the spirit of § 29 of the Constitution of the Republic of Estonia according to which a citizen has the right to choose freely his or her sphere of activity, profession and place of work, and the law may provide the conditions and procedure for exercise of the right.
According to the labour law development plan, the following laws were to be drafted and enacted: the Employment Contracts Act; Employment Act; Working Hours and Rest Time Act; Holidays Act; Salary Act; Employee Discipline Act; Employee Liability Act; Labour Safety Act; Collective Agreements Act; Individual Labour Disputes Settlement Act; and Collective Labour Disputes Settlement Act. For each of them, the development plan also listed the sphere of issues to be regulated by the particular law.
The Government approved the labour law development plan prepared by the labour law specialists at the University of Tartu. After approval, the Ministry of Justice worked out a specific schedule for drafting the labour laws, together with designating the ministries and agencies responsible for each bill. By the schedule, the bills of the above-listed laws were to be drafted in the years 1991-1992.
However, the schedule's deadlines were obviously unrealistic for such an enormous task, considering the lack of persons in Estonia who had the knowledge and ability to draft labour law. By the end of 1992, only the Employment Contracts Act, the Labour Safety Act and the Holidays Act were passed and had entered into force. Taking into account the particularly urgent need for a new Employment Contracts Act, it was still a considerable achievement.
After Estonia had restored its independence and several new labour laws had been adopted, amendments were made to the labour law development plan. At the request of the Ministry of Justice, the authors of the development plan analysed the general situation concerning the regulation of employment relationships in Estonia, made corrections to the development plan according to the needs of an independent country and determined the priorities for the passage of necessary laws and other legislation. The responsibility for labour law reforms was imposed on the Ministry of Social Affairs.
Parallel to the reassessment of the labour law development plan, the preparation and discussion of several draft bills for the regulation of employment relationships were in progress. In 1993, the Riigikogu, the parliament of Estonia, passed the Working Hours and Rest Time Act, the Employee Discipline Act, the Collective Agreements Act, the Employees Representation Act and the Collective Labour Disputes Settlement Act. In the following year, the Salary Act and the Public Holidays Act were passed. On 1 September 1996, the Individual Labour Disputes Settlement Act which was passed by the Riigikogu on 20 December 1995, entered into force.
Lagging behind the schedule of the development plan, the Employee Liability Act has not been passed to date, although it is much needed in Estonia. On the initiative of trade unions, the drafting of a Trade Unions Act which is to determine the legal status of trade unions is under way.
In spite of the above-mentioned delay in the adoption of an important law foreseen in the development plan, preparations have started for drafting a uniform Labour Code for Estonia. According to the plan, the first part of the draft Code should be ready in the autumn of 1996.
The most important and voluminous of the labour laws is the Employment Contracts Act (ECA) which was passed by the Estonian Supreme Council on 15 April 1992 and entered into force on 1 July of the same year. The law consists of 144 sections. It provides the general principles for an employment contract, the concept of and the parties to an employment contract, the scope of the Act, and the procedures for conclusion, amendment, termination and annulment of an employment contract. The ECA also sets out the main obligations of the parties and provide for several other issues connected to an employment contract.
The ECA defines an employment contract as an agreement between an employee and an employer according to which the employee undertakes to perform work for the employer under the directions and control of the latter, and the employer undertakes to pay the employee remuneration for the work performed and to guarantee the employee the working conditions prescribed by the...
To continue reading
Request your trial