Great news for Estonia: From the new year, resolving employment related disputes will become easier and more efficient

During the summer of 2017, the Estonian Parliament passed a new Labor Dispute Resolution Act (hereinafter Act), which enters into force on 01.01.2018. The goal of the Act is to create an efficient and up-to-date system to resolve labor disputes extrajudicially: to ensure quick processing of applications received by the labor dispute committee, high-quality decisions and alternative ways to resolve disputes.

As an important update, the new Act gives the labor dispute committee jurisdiction to resolve collective labor disputes regarding collective pay agreements. Disputes that involve compensation for health damages, bodily injuries or death resulting from occupational accidents or diseases are excluded from the committee’s jurisdiction, as they are both time-consuming and complicated.

The new regulation offers the Labor Dispute Committee a chance to resolve the dispute as a written procedure, which should make the proceedings more efficient and transparent. In addition, it offers the employee and employer an opportunity to settle the dispute as an agreement during a conciliation procedure. Failure to comply with the agreement can result in it being submitted to the bailiff for execution. The new Act also provides the parties with the option of resolving the dispute with a compromise.

The 10 000 € minimum limit for financial claims submitted to the labor dispute committee will no longer apply. That means that starting from 01.01.2018 you can turn to the labor dispute committee regardless the size of your claim. It’s a welcomed change, since there is no correlation between the size of the claim and the complexity of the case.

The review time for the applications will be up to 45 days. Also, petitioners will be given the opportunity to correct the application and if necessary, rectify deficiencies. Both measures should improve the quality of decisions made by the labor dispute committee.

Need professional help regarding labor dispute resolution? Contact NJORD’s lawyers Katrin Sarap, Triinu Hiob and Tavo Tiits.