Labor Law in Estonia

To be successful in business development, employment issues should cause as few problems as possible to the owners of the Estonian company. LKS Consult OÜ provides services in such areas as the conclusion of employment contracts and executive contracts; the development of a pay system; the protection of personal data of employees; non-competition agreements and non-disclosure obligations; discrimination issues and the corporate reporting system; flexible working conditions; changes in contracts, internal regulations or job descriptions; employees working through employment agencies; reorganization and transfer of employees; collective and individual dismissals.

Our company provides its clients with legal assistance in resolving all possible disputes arising from the above-mentioned employment relations.

Settlement of labour disputes

Conducting out-of-court labour law negotiations and representing the interests of the owners of the Estonian Company in proceedings before the Labour Inspectorate or the Court.

Recovery of damages caused by an employee

Legal support for the determination of liability and the recovery of damages caused to the employer by the actions or omissions of the employee.

Employment of foreign workers

Assistance in the processing of foreigners for short-term work. Foreigners are granted work visas.

Drafting of contracts of employment and other documents

Preparation and analysis of employment contracts, job descriptions, non-disclosure or liability contracts and other agreements between the employee and the employer.

Employment contract

An employment contract is an agreement between an employee and an employer whereby an employee undertakes to perform work for an employer, subject to his direction and supervision, and the employer undertakes to pay the worker for work and to provide him with working conditions stipulated by the agreement of the parties, collective agreement, law or administrative act. In 2021, the minimum hourly wage was 3.48 euros (gross) and the minimum full-time wage was 584 euros per month (gross).

The contract of employment is concluded in two copies in writing; one copy of the contract of employment remains with the employee and the other is taken over by the employer. Depending on the need, an employment contract is concluded for a fixed or indeterminate period. For example, a fixed-term employment contract is concluded for seasonal work or to replace another worker.

In a situation where it is difficult to distinguish an employment contract from another service contract, the Employment Contract Act comes to the aid. According to the Employment Contracts Act, a contract under which a person performs work for another person for remuneration is considered an employment contract until proven otherwise. This means that in the event of a dispute, the employer will have to prove that it is a different contract of obligation and not an employment contract. For example, an employment contract would be a contract called “Contract of Employment” if the content of the contract corresponds to the characteristics of the employment relationship.

Data provided in the employment contract

The employment contract must contain the following particulars and conditions:

  • Name/name, personal or registration code, place of residence or location of employer and employee
  • Time of conclusion of the employment contract and entry of the employee
  • Description of work assignments
  • The title of the post, if accompanied by a legal effect
  • The remuneration to be paid for work (remuneration for work), as agreed by the parties, including remuneration paid on the basis of economic activity and transactions, the method of calculation and the manner of payment of remuneration for work, and the time when remuneration for work becomes enforceable (date of payment of wages), as well as taxes and payments paid and withheld by the employer
  • Other benefits, if agreed by the parties
  • Time during which the employee performs the specified work (working time)
  • Place of work
  • The leave period
  • Reference to notice of termination of employment or notice of termination of employment
  • Rules for the organization of work established by the employer

A probationary period of up to four months is applied when an employee enters employment. A probationary period is the time during which an employer can assess an employee’s suitability, as well as the opportunity for an employee to assess the suitability of work and working conditions. During the probationary period, the employee has all the rights provided by the laws. The employment contract may be terminated during a probationary period with a warning period of at least 15 calendar days. The employer must explain which objectives of the probationary period the employee did not fulfil.

Termination of employment contract

There are several options for terminating an employment contract:

  • Termination of employment by agreement of the parties may, by mutual agreement, at any time terminate a fixed-term or indefinite employment contract
  • Termination of the contract
  • The death of the employee
  • The death of the employer if he was a natural entrepreneur (IFE) and if the contract was concluded, taking into account the identity of the employer significantly
  • Border termination

LKS Consult OÜ offers its quality support on any matter related to labour law and labour disputes between employee and employer.



Managing Associate

+372 5492 3720