Article

Employment Contracts Act 97, 100, 103

Description

An employer must give an employee advance notice of extraordinary cancellation which depends on the time 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.

These requirements also cover collective redundancies (within 30 days, dismissals of at least 5 employees in companies with up to 19 staff, of at least 10 in firms with 20-99 staff, of at least 10% in companies with 100-299 staff or of at least 30 in larger companies), but the period shall not be shorter than 30 calendar days from the point in time when the employer has informed the Estonian Unemployment Insurance Fund about the collective redundancy. 

An employer may cancel an employment contract without adhering to the term for advance notice if, considering all circumstances and mutual interests, it cannot be reasonably demanded that the performance of the contract be continued until the expiry of the agreed term or term for advance notice (including bankruptcy).

If an employer wishes to terminate the employment contract with immediate effect, he/she may choose to remunerate the advance notice period in money. The amount that the employer or employee has the right to receive is based on the average working day wage of the employee and the number of days that advance notice of cancellation of the employment contract was given less.

Commentary

According to the Employment Contract Survey, 62-75% of employees made redundant estimated that they were noticed according to their rights (Masso et al, 2013).

Additional metadata

Cost covered by

Employer

Involved actors other than national government

Public employment service

Involvement (others)

None

Thresholds

Affected employees: 5
Company size: 19
Additional information: No, applicable in all circumstances

Sources

• Employment Contracts Act
• In Estonian: Töölepingu seadus
• In English: Employment Contracts Act
• Masso M, Järve J, Nurmela K, Anspal S, Räis , M L, Uudeküll K, Osila L (2013), Töölepingu seaduse uuring. (title in English: Employment Contract Act Survey) Tallinn: Poliitikauuringute Keskus Praxis.
• DG Employment, Social Affairs and Equal Opportunities/Héra (2011), Selected companies’ legal obligations regarding restructuring.
• Ius Laboris (2011), Individual Dismissals Across Europe, Brussels.