Confederation of Employers submits 170 proposals to the Prime Minister’s Advisory Council to cut unnecessary red tape
The Confederation of Estonian Employers, which represents the largest employers, has collected 170 proposals to cut unnecessary red tape and today submitted a summary to the Chancellery and the Prime Minister’s Growth Council. Of these, the 12 proposals with the greatest impact and the quickest to be resolved could reach the Cabinet of Ministers’ Economic Cabinet for action as early as May.
Procedural and reporting issues are the most worrying for businesses, followed by requirements and obligations imposed on companies and, thirdly, stricter transposition of EU requirements.
“The number of examples we received exceeded all expectations, and it shows that the huge increase in bureaucracy is a serious challenge for Estonian business. However, excessive requirements and burdens are not only a concern for business. Every inefficient or unnecessary move is paid for by society as a whole,” stresses Hando Sutter, CEO of the Confederation of Estonian Employers , and thanks all those who submitted substantive proposals. “With the help of the law firm Sorainen, we compiled the proposals we collected and together with our members we selected the 12 changes that the government can implement the fastest. These high-impact proposals will affect more than 150 000 companies operating in Estonia.”
The 12 proposals put forward for the first time and described below include duplicative requests for the same data by the state, excessive time spent on detailed planning procedures, unnecessary and duplicative requirements for safety codes, burdensome obligations to carry out an occupational risk assessment in small collectives, requirements for employment contracts, repeated audits of projects implemented with European grants and duplicative monitoring. The stricter transposition of EU rules into Estonian law is also a major concern.
The Confederation of Employers also looks forward to action on all the other proposals put forward and plans to regularly monitor progress and provide feedback to its members.
Sutter recalls that the European Union is also currently cutting red tape. The Confederation of Estonian Employers has submitted its own recommendations to the European Commission through the employers’ umbrella organisation BusinessEurope, and the first work is to delay the entry into force of sustainability reporting obligations for thousands of companies.
For example, sustainability reports have already cost Estonian companies hundreds of thousands of euros, but few people read them and their usefulness is questionable. The Confederation is therefore proposing to make these reports and their auditing voluntary.
The Confederation of Employers “Unnecessary Bureaucracy public brainstorming to collect examples of unnecessary bureaucracy lasted 1.5 months and ended on 4 April. Examples were provided by businesses and several business associations such as the Estonian Traders” Association, ITL, the Estonian Hotel and Restaurant Association and others.
The full overview of the proposals received can be found at www.employers.ee/halduskoormus
12 suggestions to start cutting red tape
More than 150 000 businesses are affected.
1. Refrain from asking for duplicate data
The state asks for data already provided by businesses in various statistical reports and other data transmission formats.
Proposal: develop information systems and enable cross-use of data and harmonise data formats, automate data transmission, i.e. pre-filling.
2. Speed up detailed planning procedures
The obligation to draw up detailed plans is unreasonably broad.
Proposal: define the need for detailed planning in justified cases and develop deadlines and incentives for local authorities to speed up procedures. Shorten the time limits for procedures.
3. Reduce red tape when hiring a worker with reduced work capacity.
When hiring a disabled or partially disabled worker, the employer has the possibility to get a social tax credit, but this must be applied for separately.
Proposal: to make the decision on the refund of social security contributions automatic for the employer.
4. Eliminate unnecessary auditing
Inefficient management companies spend thousands of euros a year, time and energy on auditing.
Proposal: to exempt administrative companies with no economic activity from the obligation to have an audit or to make it an obligation for example more than two years old. Consider raising the threshold for audit engagement for companies with a small volume of economic activity.
5. Digitise the process of recruiting foreign workers
The process of dealing with labour migration is complex, fragmented and non-digital.
Proposal for a single and automated information system on aliens’ admission procedures. This will allow for improved monitoring of aliens and reduced risks.
6. Do away with unnecessary instructions
Proposal: abolish the obligation for the employer to draw up instructions for the use of work equipment and instructions for the work to be carried out, if the information in the safety instructions for the use of work equipment and in the risk assessment serves the same purpose.
7. Do not tighten up waste and packaging legislation compared to Europe.
The draft Estonian Waste and Packaging Act sets different and stricter targets for producers than European regulations.
Proposal: to waive the stricter requirements of EU law.
8. Do away with burdensome risk assessments
In a workplace with more than one employee, the occupational environmental specialist must carry out an occupational risk assessment and draw up an action plan to eliminate the hazards or reduce their impact.
Proposal: to remove the obligation to carry out a risk assessment and to designate a specialist in organisations with fewer than 10 employees and in sectors where the likelihood of a serious accident at work is low.
9. Make employment contract law more flexible
Every change of workload has to be formalised in an employment contract and creates a lot of red tape. Contracts of employment contain a large number of mandatory statutory provisions which must be duplicated in the contract. All contracts must be amended when the law changes.
Proposal: reduce the mandatory elements of the employment contract and allow flexible working arrangements.
10. Refrain from auditing projects repeatedly
Multiple checks on projects funded by the euro by different agencies create unnecessary workload and time. Checks and audits can come years after the activities have taken place, when the people responsible for the project have left their jobs.
Proposal: reduce the monitoring burden to the minimum necessary.
11. Waive sustainability reporting obligations
Sustainability reports have already cost Estonian businesses hundreds of thousands of euros, but their benefits and impact are questionable.
Proposal: to make CSRD (Corporate Sustainability Reporting Directive) and CSDDD (Corporate Sustainability Due Diligence Directive) reporting and auditing voluntary.
12. Transpose the Wages Directive as a minimum.
The implementation of the Pay Transparency Directive will be a big job for employers. Defining occupations and salary ranges is complicated.
Proposal: transpose the Directive with a minimum of transposition and using the data already available, so that businesses do not have to collect additional information.
The full overview of the proposals received can be found at www.employers.ee/halduskoormus