Trade unions call on the government to resume tripartite substantive negotiations at national level. We call for public support for the development of collective industrial relations and collective bargaining in both the public and private sectors. Our proposal is to withdraw the draft amendments to the Employment Contracts Act from the procedure of the State Assembly, write Kalle Liivamägi and Sander Vaikma.

Social dialogue at national level is under threat in Estonia. The government, which took office in March 2025, appears to have taken the view that the tripartite talks between the state, employers and trade unions, which were restored at national level in 2019, are an obstacle to Estonia's economic development.

Amendments to the Employment Contracts Act

A striking example of the government's change of attitude is its dismissive attitude towards the draft amendments to the Employment Contracts Act, where the government did not take into account the proposals of the social partners. Although the Estonian Trade Union Confederation (EAKL) participated in the preparation of the draft law, the final version, which had been substantially amended, was only revealed to the press. The original aim of the amendments was to make labour relations more flexible, but also to ensure security of employment.

It was agreed between the social partners that flexible working time can only be applied to certain target groups (students, pensioners, etc.), subject to an agreement with the worker.

The November 2024 draft also reflected the view of the social partners that flexible working arrangements can be applied to other workers if such a possibility is agreed in a collective agreement. The government excluded the possibility to conclude flexible working time agreements through collective agreements in the latest draft without informing the social partners.

In this way, the government wants to make flexible working hours applicable to both public and private sector workers, without being interested in developing and promoting collective bargaining. This is in a situation where Estonia has one of the lowest rates of collective agreements in the European Union. The EU minimum wage directive, on the other hand, supports the creation of a basis for collective agreements.

Following the successful resumption of social partners' meetings with the government and the prime minister on key issues a few times a year, Prime Minister Kristen Michal recently said that there was no need for such meetings and that tripartite talks could only continue at the level of the minister of economy and industry.

However, Erkki Keldo, the minister responsible for the economy and industrial relations, believes that collective agreements are a relic of the 19th and 20th centuries that play no significant role in modern society. At a meeting with the EAKL board, Mr Keldo stressed that he did not support collective agreements in the public sector.

It cannot be ruled out that the government intends to give or has already given instructions to the boards of state-owned enterprises to avoid entering into any commitments under collective agreements. Some Estonian state-owned enterprises have been trying to evade collective agreements for years.

Given the economic setbacks, growing economic uncertainty and uncertainty, high inflation in Estonia and some of the highest prices in Europe, such a decision reduces the ability of trade unions to resist unwanted change.

Trade unions call on government to restore tripartite substantive negotiations at national level

Trade unions seek public support for the development of collective industrial relations and collective agreements in both the public and private sectors. Our proposal is to withdraw the draft amendments to the Employment Contracts Act from the procedure of the State Assembly and to start in-depth tripartite negotiations on it.

The Trade Union of State and Local Government Employees (ROTAL) and the Estonian Energy Employees Trade Union Confederation (EEAÜL) have also informed the General Secretary of the European Public Service Union (EPSU), Jan Willem Goudriaan, about the situation in Estonia, who shares the Estonian trade unions' concerns about the lack of transparency in labour relations and contracting and deplores the course taken by Prime Minister Michal's government to swim against the tide of EU labour policy and harm the interests of Estonian workers.

If the current course of action continues, the EPSU leader does not rule out filing complaints with the European Commission, which would lead to Estonian labour policy being taken to the EU level.

Both ROTAL and EEAÜL call on the government to change its mind, to withdraw the bills that do not have the approval of the social partners from the State Assembly and to sit down again at the table in order to find progress in labour relations through tripartite negotiations, which would benefit the Estonian state, employers and employees and ensure the development of the Estonian economy.

Why do we need collective agreements?

A collective agreement, whether it is concluded in an institution, a company or an activity/sector, sets out the terms and conditions of employment and the working relationship agreed between employees and employer(s). It is therefore, by its very nature, an employment contract that applies to all employees. It could be argued that employment relations are governed by the Employment Contracts Act and individual employment contracts.

At the same time, we must not forget the three important facts that the law only sets minimum working conditions and guarantees for workers, that the law leaves many issues to the parties to agree and that, in general, the worker is inevitably the weaker party in the employment relationship, which can be mitigated by collective bargaining. It is also easier for the employer to agree working conditions for all employees in a single negotiation.

Employers have, especially recently, begun to ask how they benefit from collective agreements.

The answer is simple but elementary: firstly, a collective agreement can set out all the terms and conditions of employment and working relationships in a company or sector. No less important is the fact that a collective agreement guarantees industrial peace. It is worth stressing that industrial peace is not limited to the trade union's obligation not to call a strike, but also includes constructive relations between the organisation representing the workers and the employer.

It would be a simplification to reduce the employer's interest in the collective agreement to material benefits only. It is always worth bearing in mind that there is also an intangible value to the employment relationship. And a constructive working relationship that takes account of the interests and needs of the partner is the greatest win-win for all and the pledge of a company's success. However, even a bad peace is better than a good war.