Home / National Industrial Relations / Countries / Estonia / Collective Bargaining

Collective Bargaining

Around a third of employees are covered by collective bargaining in Estonia and by far the most important level for collective bargaining is the company or organisation, with unions negotiating with individual employers. However, the minimum wage is set after negotiations between the union confederations and the employers at national level.

The framework

Legislation provides for collective agreements at three levels – national, industry and company/organisation. In practice the most important level is company or organisational level bargaining, although there have also been a number of important national agreements.

 

 

The 2009 Statistics Estonia survey shows that 32.7% of employees in organisations employing five or more are covered by collective agreements. For the majority of employees in Estonia, working conditions, and in particular pay, are fixed in direct discussions between the employer and the individual worker. Collective agreements are required to be registered in a national database, although not all are, as some companies are reluctant to provide the information. As of July 2014, there were 770 agreements on the database of the social ministry which were stated to be current, of which 43 had been signed in 20131 .

The key level of collective bargaining is at the level of the company or organisation, both in the private sector – in as far as bargaining takes place at all – and in the public sector. For example, the terms and conditions of employees in local government are set through negotiation between each individual municipality and the unions. Where an employer signs a collective agreement, it applies to all employees, irrespective as to whether or not they are union members.

 

The number of industry level agreements and their coverage has fallen in recent years, and in 2014 only two such agreements remain current – covering transport and health care. By law, industry level agreements can easily be extended to other employers in the industry. All that is necessary is the agreement of the two parties. In practice this has only happened rarely and transport and health care are the only industries where agreements have ever been extended to non-signatory employers in this way. The government is currently considering changes to the system of extending agreements as part of a wider reform of industrial relations. It is likely that in future greater attention will be paid to the representativeness of the unions and employers who signed the agreement.2

At national level there are a number of tripartite bodies bringing together the unions, employers and government. The most important is the Social and Economic Council. Tripartite negotiations have been important in developing Estonia’s system of industrial relations but agreements have also been concluded on labour market policy and the minimum wage. There have also been discussions between unions and the government at national level on the pay of civil servants and joint statements between union and employers at national level on social security reform and the principles of social partnership.

Who negotiates and when?

At industry level negotiations take place between the unions and employers’ associations, although as stated these are rare, and have essentially been limited to the transport industry and health care.

At company level negotiations take place between the union in the organisation and the employer. The law also allows elected employee representatives to undertake collective bargaining, where there is no union present and where there are no union members at the workplace (see section on workplace representation).

Agreements normally last for one or two years.

The number of industry level agreements and their coverage has fallen in recent years, and in 20124 only two such agreements were reached remain current – covering transport and health care. By law, industry level agreements can easily be extended to other employers in the industry. All that is necessary is the agreement of the two parties. In practice this has only happened rarely and transport and health care are the only industries where agreements have ever been extended to non-signatory employers in this way. Despite this, there is pressure from the employers to change the system and make it more difficult to extend agreements.The government is currently considering changes to the system of extending agreements as part of a wider reform of industrial relations. It is likely that in future greater attention will be paid to the representati

L. Fulton (2015) Worker representation in Europe. Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at http://www.worker-participation.eu/National-Industrial-Relations.