European Restructuring Monitor (ERM)
Eurofound's ERM database on restructuring-related legal regulations provides information on regulations in the Member States of the European Union and Norway which are explicitly or implicitly linked to anticipating and managing change.
Employment contracts act: 97, 100, 139; Unemployment insurance act: 14.1, 14.2
In cases of termination of the employment contract due to redundancy, the employer must pay compensation in the amount of one month's average wage of the employee calculated on the basis of the previous six months' wage.
In case the cancellation of an fixed-term contract due to redundancy, the employer must pay compensation to the extent that corresponds to the wage that the employee would have been entitled to until the expiry of the contract term. No compensation shall be paid if the employment contract is cancelled due to force majeure.
If an employee cancels their employment contract extraordinarily for the reason that the employer is in fundamental breach of the contract, the employer must pay the employee compensation to the extent of three months’ average wages of the employee. This compensation is not subject to the provisions of Chapter 7 of the Law of Obligations Act. The court or labour dispute committee may change the amount of compensation considering the circumstances of the cancellation of the employment contract. The amount of compensation may not be reduced by benefits and allowances paid to the person by the state.
If an employer gives advance notice of cancellation later than provided by law or a collective agreement, the employee has the right to receive compensation to the extent to which he or she would have been entitled to upon adhering to the term for advance notice.??If the employer wishes to terminate the employment contract with immediate effect, the employer may choose to remunerate the advance notice period in money. This will be calculated based on the average working day salary of the employee for every working day that advance notice of cancellation of the employment contract was given less.
Those employed with the same employer from 5 to 10 years are entitled to an additional one month's salary from the unemployment insurance fund (Töötukassa). For persons who have been working for the same employer 10 or more years, two months' salary is added by the fund.
These provisions apply to individual as well as collective dismissal cases.
According to the employment contract act survey (Masso et al, 2013), 82%-92% of those who were made redundant estimated that compensation were paid according to their rights. These benefits are relatively high and provide a good income for those who have lost their jobs through redundancy. For example, the average gross salary reached €1,316 in 2019 and €1,379 in 2020, while the average redundancy benefit reached €2,030 in 2019 and 2020. To access data on redundancy compensation, visit Statistics Estonia.
Eurofound (2015), Estonia: Severance pay/redundancy compensation, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/severance-payredundancy-compensation/estonia
This Eurofound research paper explores key trends in restructuring in recent years, highlighting the companies that announced the largest job losses and job gains in the EU. It builds on an analysis of company announcements recorded in Eurofound’s European Restructuring Monitor (ERM), alongside a new classification of restructuring events involving changes in company location.
:quality(80))
Employers increasingly use tools such as email, SMS and messaging apps like WhatsApp or Signal to communicate with employees. While these technologies offer both efficiency and convenience, their use in communicating sensitive information, particularly for notifying employees of dismissal, raises legal concerns. This article explores the legal framework on dismissals across the EU, with a special focus on the use of digital means for communicating employment dismissals. Drawing on examples from various Member States, it examines the legal validity of digital dismissals.
:quality(80))
In 2023, thousands of workers in big tech lost their jobs. Meta, Amazon, Google, Apple, Microsoft and Salesforce had been considered to offer good and secure jobs up to this point. Giants of the information and communication technology (ICT) sector, these companies are among the highest paying, with Eurostat data from 2022 indicating that workers in ICT had the second-highest median gross hourly earnings (surpassed only by earnings in the financial sector).[1] These layoffs were a shock, especially as the biggest companies had hired extensively during the COVID-19 pandemic. What happened in the two years after this redundancy wave – was that the end of the cuts or did the companies start expanding again?
:quality(80))
In 2024, the automotive sector in the EU came to the fore in public and policy discussions. The focus was on the slowdown in electric vehicle (EV) sales, rising global competition, belated investments in new technologies, and the potential closure of production lines in Europe. A number of European car manufacturers and suppliers announced their intention to make large-scale redundancies and change long-standing collective agreements on job security and wages, while workers raised concerns amid demonstrations and industrial action.
:quality(80))