Labour Law Newsletter – New Opportunities and Changes in Employment Relations: More Flexible Working Hours, Greater Role for Medical Practitioners in Occupational Health, Hiring Foreign Workers

The long-awaited amendments to the Employment Contracts Act have arrived to make working hours and on-call time more flexible. The amendments coming into effect on 24 December 2022 provide flexibility for employees who schedule their own working hours, for the on-call hours of ICT employees and for consecutive fixed-term employment contracts with people registered as unemployed. These changes will not meet the expectations of all employers or address all commonly used working arrangements, but they are a start.

The amendments to the Occupational Health and Safety Act entering into force on 1 January 2023 extend the role of medical practitioners in occupational health and clarify the duties and responsibilities of the employer and employees in a remote work situation.

Technology companies should be interested in the exception introduced in the Aliens Act starting from 2023, which allows them to hire foreign workers in a simplified manner.

This newsletter covers these imminent changes and discusses hiring people from Ukraine.

In light of the changes coming into effect in the new year, it is time for employers to review and update employment contracts as well as service contracts with natural persons. We would like to remind you that the Employment Contracts Act amendments of 1 August 2022 introduced new mandatory clauses in employment contracts. You can read about these new clauses here: https://www.cobalt.legal/en/news-cases/additional_mandatory_conditions_of_the_employment_contract.

This newsletter was compiled by COBALT partner Karina Paatsi and senior associates Heili Haabu and Johanna-Britt Mikk.

Employees with independent decision-making capacity

The Employment Contracts Act in its current wording requires employees to work during the employer’s normal working hours, unless agreed otherwise. The employee’s working hours must be specified in the employment contract. However, in an increasing number of jobs, fixed hours are no longer relevant due to the nature of the job, and employees increasingly want the freedom to adjust their working hours to their needs and preferences. The new provisions on working hours, which will enter into force on 24 December 2022, are therefore highly welcome and (re)introduce the concept of an employee with independent decision-making capacity. This is an employee who, based on the nature of the work, is free to schedule their working hours, and with whom the employer can agree on different working and rest time arrangements. Read more: here

More flexible on-call time for ICT employees

As on-call time is potential working time, the employer must allow daily and weekly rest periods when scheduling and implementing on-call time. This means that a full-time employee who works 8 hours a day (plus a half-hour break during the working day) can be subjected, by agreement, to 4.5 hours of on-call time a day. There is a practical need to put ICT employees on call for longer periods than currently allowed, so as to ensure service continuity and rapid emergency response times. Therefore, an exception is now granted for employees specifically engaged in ICT services, which allows the parties to deviate from the daily and weekly rest time requirements when agreeing on arrangements for on-call time. Read more: here

Exceptions concerning consecutive fixed-term employment contracts with people registered as unemployed

Starting from September 2020, individuals registered as unemployed are allowed to take up short-term work without this ending their unemployment status. The current legislation only allows for two consecutive fixed-term contracts for similar work and for extending a fixed-term contract no more than once every five years in order to avoid the contract becoming open-ended. As an employee cannot currently take up consecutive short-term jobs for the same employer under an employment contract, short-term work is done under service and agency contracts. These, however, deprive the employee of labour law protection. To improve protection, an exception now applies to consecutive fixed-term employment contracts with people registered as unemployed. Read more: here

Construction contractor liability for wages not received by the employees of a subcontractor

The amendments to the Employment Contracts Act that entered into force on 15 October 2022 stipulate for the first time that the person hiring a subcontractor for construction work can be liable for the wages payable to the subcontractor’s employees. This means that employees performing construction work for a subcontractor can claim wages not only from the subcontractor as their employer but also from the person who hired the subcontractor – though only to a limited extent. Read more: here

Changes in organising occupational health and safety

The coming year will bring changes to the organisation of employee occupational health. On 1 January 2023, the sickness benefit payment procedure in force before the Covid measures will enter back into force. According to this procedure, employees are not compensated for the first three days of sickness, and the right to receive compensation only starts from the fourth day of sickness. In the future, the role of occupational health physicians will increase significantly, with companies required to engage them more closely in the organisation of occupational health. In addition, the new legislation will bring more clarity to the organisation of remote work-related occupational health. Read more: here

Hiring foreign workers

At the end of November, the Government of Estonia confirmed the immigration quota for 2023, and based on this, the Police and Border Guard Board announced the time slots for submitting residence permit applications in their online booking system in December and January. The time slots were fully booked in just a matter of minutes, and many foreigners waiting for the booking calendar to load lost their booking. Therefore, applying for residence permits for third-country nationals is becoming increasingly difficult, with luck playing a role in the process. However, the Aliens Act has recently been supplemented with provisions allowing certain types of employees to go through the necessary immigration formalities in a simplified way. Read more: here