In Estonia, there are several types of employment agreements that cater to different work arrangements. These are crucial for both employers and employees to understand. Here's a breakdown of the most common types:

Employment Contract (Tööleping)

The Employment Contracts Act governs this agreement, which is the most prevalent type, typically for indefinite periods. It establishes the rights and obligations of both parties concerning remuneration and benefits, working hours and overtime, leave, and termination procedures.

Fixed-Term Employment Contract (tähtajaline töövõtuleping)

This agreement, also outlined in the Employment Contracts Act, is for a predetermined duration tied to the nature of the work. Just reasons, such as a seasonal project, are required for using a fixed-term contract.

Temporary Employment Contract (ajutine tööleping)

Temporary employment contracts address short-term needs but cannot exceed six months within a 12-month period, as per the Employment Contracts Act.

Employment Contract for Additional Work (lepingulised lisatööd)

This agreement caters to situations where an employee takes on extra work beyond their regular duties with the same employer. It specifies the additional tasks, compensation, and working hours for this supplemental work.

Employment Contract with Home Workers (kodutööleping)

This agreement is for employees who primarily perform their duties from their residence. It outlines specific considerations for managing remote work, such as providing necessary equipment.

Contract for Services (teenuse osutamise leping)

This is distinct from an employment contract. It applies to independent contractors who provide specific services to a company but are not considered employees. They are responsible for their own taxes and social security contributions.

Estonian employment agreements must adhere to the Employment Contracts Act (ECA). This act outlines mandatory clauses that every written employment contract must contain.

Parties to the Agreement

The agreement must clearly identify both the employer and the employee. This includes full names, personal identification codes (for employees) or registration codes (for employers), and addresses for both parties.

Contract Details

The agreement should specify the date the contract is signed and the employee's start date.

Job Title and Description

A clear description of the employee's official job title and a breakdown of their work duties should be included. This can be outlined in the agreement itself or attached as a separate document.

Remuneration and Benefits

The agreement must specify the amount of wages or salary, the payment intervals, and any additional benefits offered, such as bonuses, health insurance, or vacation pay.

Working Hours and Leave

The agreement should outline the employee's regular working hours, including breaks and rest periods. Additionally, details regarding annual leave entitlement and sick leave should be specified.

Place of Work and Business Trips

The agreement should clarify the employee's primary workplace. If business trips are a possibility, the agreement can outline the terms and compensation for such travel.

Intellectual Property

The agreement can address ownership and rights related to any intellectual property created by the employee during their employment.

Termination Clauses

While not mandatory, it's advisable to include clauses outlining the grounds and procedures for termination by either party, including notice periods and severance pay (if applicable).

In Estonia, the Employment Contracts Act (ECA) recognizes the concept of a probationary period as a means of assessing the suitability of both the employee and the position.

Duration of the Probationary Period

The ECA sets a maximum duration of four months for the probationary period. However, employers and employees can mutually agree on a shorter period or even decide to skip it. But, this decision must be explicitly stated in the agreement.

Probationary Period in Fixed-Term Contracts

In the case of fixed-term employment contracts that last up to eight months, the probationary period cannot exceed half of the contract length. Regardless, it should never exceed the four-month maximum limit.

Exclusions During Probation

The probationary period does not include periods of temporary incapacity for work, such as sick leave, or holidays.

Termination During Probation

During the probationary period, both the employer and the employee reserve the right to terminate the employment contract. This requires a written notice of at least 15 calendar days. If challenged, the employer should be ready to justify in writing why the employee did not meet the objectives of the probationary period.

In Estonian employment agreements, two key aspects related to the protection of the employer's interests are confidentiality and non-competition. However, Estonian law places limitations on these clauses to ensure a balance between employer protection and employee mobility.

Confidentiality Clauses

The Estonian Employment Contracts Act (ECA) implies a duty on the employee to maintain the confidentiality of the employer's business and production secrets. This includes information not publicly known that could potentially cause economic harm to the employer if disclosed.

An employment agreement can further emphasize this obligation and specify the type of confidential information the employee must protect. However, the clause cannot unreasonably restrict the employee's ability to use their general knowledge and skills gained during employment.

Non-Compete Clauses

Non-compete clauses, restricting an employee from working for a competitor after termination, are also recognized under the ECA but with specific limitations.

• Validity: To be enforceable, a non-compete clause must be agreed upon in writing and clearly define the restricted activities, geographical area, and duration of the restriction.

• Reasonableness: The restrictions must be proportionate to the employer's legitimate interests and not excessively limit the employee's future career opportunities. Courts will likely consider factors like the seniority of the employee, the nature of the business, and the competitiveness of the market.

• Compensation: If the non-compete clause applies after the employment relationship ends, the employer is obligated to provide the employee with financial compensation for the restriction. This compensation is typically included in the employee's salary during their employment.