Ain Käpp: Flexibility in labour relations is the best news of the decade

Making labour law more flexible is the best news in industrial relations in the last 10 years, explains Ain Käpp, a member of the Employers’ Confederation council and head of the labour market working group. It will give part-time workers more security and help attract new people to the labour market.

Amendments to the Employment Contracts Act, which allow employers and employees to agree on working hours in a more flexible way, have been introduced in the Riigikogu. Although these changes have been long awaited by workers and employers, there are a number of myths and misconceptions circulating about them that are not true.

It is argued that the worker becomes the weaker party to the contract, without security or protection. No! The planned changes will affect people and employers who want to agree more flexible working hours, and some of them already do so today, i.e. work on a variable basis. No one’s workload will be replaced.

As employment contract law does not currently allow for such flexibility, it has been based on contracts in the form of obligations (such as an agency contract or an employment contract), but as a result the worker is not covered by a number of guarantees such as limits on working time and rest periods, the right to annual leave, minimum wages, the employer’s guarantee of safety at work or guarantees on termination of the contract.

Therefore, the modernisation of the Employment Contracts Act will actually increase the security of the part-time worker, who will also benefit from these guarantees.

The skills crisis needs to be addressed

It is true that, just as there are employers who act in defiance of good practice as well as the law, there are also such workers. However, it is wrong and unfair to generalise from them that all the tens of thousands of businesses here, or more than 700 000 workers, do. We have societal control mechanisms in place to call offenders to account, from the Labour Disputes Commission to the courts.

Rather, there is a growing shortage of skilled workers in Estonia, which means that employers need to make an effort to both recruit and retain good workers. Offering flexibility in work is one way of doing this, as many people do not want to work full-time or with a single employer, or employers offer work on an episodic and piecemeal basis. Traditional ways of working – such as full-time, single-employer jobs – will of course remain, but more flexibility in both time and place is inevitable. This will help to attract those who need such opportunities into the labour market.

The country has already taken steps in this direction. For example, responsibility has been shared between the employer and the employee in the case of teleworking, or the notion of an autonomous worker who is responsible for organising his or her own working time has been introduced.

These changes speak not only about the evolution of work, but also about our ability to trust the players in the labour market – our employers and our workers. After all, there are always two parties to a contract who negotiate the terms. If there is no agreement, there is no contract. That is why, instead of scaring people with lies, it is worth raising their awareness, explaining their opportunities and their rights, so that they can be empowered in their employment relations if necessary.

There is no point in overregulating flexibility

We have seen what happens when you start over-regulating flexibility. For example, a two-year experiment in the commercial sector to agree more flexible working time, the variable hours pilot project, failed because the conditions – too restrictive in one sector and too complex – did not invite take-up. Therefore, there is no point in not limiting the target group, i.e. in giving flexible working to all those who want it.

In a situation where there is a shortage of labour and workers have a choice of jobs, the option of a fixed-load contract remains for those who wish to do so.

Overtime pay does not disappear

Two more misleading claims concern remuneration. It is claimed that overtime pay will disappear. It will not disappear, because the article regulating it will remain in force, i.e. work in excess of the agreed time is overtime.

Secondly, it would be unequal to pay a young or probationary worker the minimum wage. For example, the service sector is an important source of first work experience for young entrants to the labour market, where recruitment is done without any professional education or experience and training is provided on the spot by the employer. As they do not have an equivalent performance compared to their experienced colleagues, this is reflected in the pay.

The draft is a compromise

Following the publication of the innovations, there have been further allegations, undermining public confidence, that social partners were excluded from the process. This is not true. Interested parties have been involved in the process and have been able to give feedback, this is public information.

However, it should be noted that the draft is a compromise, as employers and employees, for example, see the need for more flexible labour law. The fact that the result does not meet 100% of the wishes does not mean that there was no involvement.