New draft legislation to change the way labour disputes are resolved

In September, the Ministry of Social Affairs introduced a draft Labour Dispute Resolution Act (the “Draft“), which, once adopted, will invalidate the Individual Labour Dispute Resolution Act (the ”Act”), currently in force.

The Draft aims to lay down a uniform and modern set of rules that would take the current socio-economic situation into account and would provide for an effective extrajudicial labour dispute resolution. Compared to the Act, the Draft provides more flexibility, creates alternative possibilities for settlement of disputes and enlarges the competences of the labour dispute committee and the chairman of a labour dispute committee. Consequently, employers and employees should benefit from faster, easier and clearer proceedings that are of a better quality than before.

The Draft is planned to come into force on July 1, 2017.

What will change once the Draft is adopted?

  • In addition to the disputes arising from an employment agreement, the labour dispute committee will have competence to settle disputes arising from other employment related matters, for example safety and health at work, as well as disputes arising from the performance of a collective agreement.
  • The period for reviewing of the application will extend from one month to 45 days.
  • The threshold of a monetary claim will be abolished. Consequently, it will be possible to file a claim higher than EUR 10 000 to the labour dispute committee.
  • Claims up until EUR 3 200 will be settled in written proceedings unless the chairman decides otherwise.
  • It will be possible to merge claims of the same type. For example when an employer files a claim against several employees, the claims may be heard together.
  • The Draft will specify that when the workplace of an employee is in a foreign country, the application shall be submitted to the labour dispute committee of the employer’s residence.
  • When agreed by both parties and on the consent of the labour dispute committee, the hearing may be held and the evidence may be presented in a language other than Estonian.
  • Provided that both parties agree, the labour dispute committee will be able to provide the option of a non-public and less bureaucratic conciliation procedure, mediated by the chairman of the labour dispute committee.
  • The Draft will provide for a possibility to improve the application and to correct omissions within 15 days by the time specified by the labour dispute committee.
  • Rules for the service of procedural documents via the system of official notices ("Ametlikud Teadaanded” in Estonian) will be set out.
  • The chairman of a labour dispute committee will have the right to approve a compromise, whereas approval of a compromise constitutes an execution document that enables the parties to contact a bailiff.
  • The labour dispute committee will have the right to collect complementary evidence and to require submission of other evidence from the parties.

Employment growth

Estonia recorded the highest increase in the second quarter of 2016 (+1.7%) among EU Member States for which data are available.