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Employment Contract in Estonia

Updated on Thursday 07th August 2014

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Employment contract in Estonia
 
After opening a company in Estonia, an entrepreneur will go through the personnel selection phase for his company. Employing workers in Estonia must be done with the assurance of law compliance.
 
An employment contract in Estonia represents an agreement made between an Estonian employee and an employer. Such contract states that the employee performs a specific type of work for the employer, under specific conditions, such as being in subordination to the management and under the supervision of the employer. Also, it is stated that the employer must remunerate the employee for his work, and he is compelled to provide the working conditions set in the agreement, usually governed by a collective agreement, law or administrative legislation.
 
The employment contract in Estonia must be made in duplicate original copies, one for the employer, and another one for the employee. It can either be  a fixed term or unspecified term contract, depending on the type of work reqested by the employer
 
What are the specific requirements mentioned in the Estonian employment contract?
 
Each Estonian employment contract must list  specific information in order to be valid, such as the identities of the parties, name, registration number, and residence, the entry date of the contract and the starting date of work for the employee. In addition, the validity period of the contract must be also specified in case the contract if a fix-term agreement. The job description, qualification requirements and professional title are also among the items that are to be mentioned in such agreement.
 
In addition, information such as the place or region where work will be performed, wage conditions, working time, length of annual holiday or additional holiday, basis of offering additional holiday, as well as terms for termination of the contract will be set in the Estonian employment contract. Furthermore, a reference is also required  if the contract applies to the collective agreement.
 
Estonia offers the possibility of probationary period that cannot be longer than 4 months, when the employer can test whether or not the employee is fit for the specified work. In the probation period, the employee has all the rights provided by law. In case of the termination of the employment contract during the probationary period, the other party will be notified 15 days prior to termination.
 
Termination of an employment contract in Estonia
 
There are several reasons for the termination of an employment contract in Estonia. The most common one is by mutual agreement, when parties agree at any time to end the contract. Another reason is the expiry of term, applied for a fixed-term type of agreement. 
 
Both the employee and employer can terminate the employment contract, but the employee has a simpler procedure: he must submit a written termination application to the employer one month before the desired date, unlike the employer that must also state the reason for the contract termination, that must be a valid one. However, the employer is not obligated to notify the employee in advance if a bankruptcy declaration exists. 
 
There are special cases in which third parties may request the termination of the employment contract in Estonia, such as a parent or a guardian, if a minor is involved in the process and the work may lead to injury, can affect the moral developments or jeopardizes his or her education. 
 
In addition, there are circumstances independent of the parties, such as a criminal punishment on an employee, death or illegal entry into an employment contract. Contact our company formation specialists in Estonia to have access to specific information regarding the employment contract.

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