The lawyer answers: what will the changes to the Employment Contracts Act mean for employees?

Amendments to the Employment Contracts Act are being debated in the Riigikogu, with the aim of adapting to the changed needs of the labour market. However, a number of misconceptions and fears have arisen as a result of the amendment. Piia Zimmermann, legal adviser to the Confederation of Employers, answers common questions.

Will the new law abolish my current employment contract?

No. Nothing will change for those who continue to work full-time on a regular contract. The existing contract will remain in force and no one will force you to change it. The change will only affect those workers and employers who wish to agree more flexible working hours.

The amendment adds one more option – a flexible working contract. This is suitable, for example, for people who have changing commitments in their lives or who cannot or do not want to work the same amount of hours every week.

Example: Priit works in the office from 9-17. For him, nothing changes. Mart, on the other hand, has to look after his grandmother and can’t be there every day. A change in the law allows him to enter into a flexible working contract with his employer – Mart can plan his workload to suit his own life, while retaining all the guarantees of his employment contract.

Can my employer give me fewer hours and reduce my pay?

You can’t, unless it’s agreed with you in advance. In the case of flexible working, your employer must agree with you the minimum number of hours for which you are entitled to a guaranteed rate of pay. This means that you know your monthly income and can plan your budget accordingly.

If a worker has worked for an employer for at least 4 months or 168 hours, he or she must be paid at least 1.2 times the statutory minimum hourly rate, which in turn helps to guarantee a certain minimum wage.

Example: Mart needs at least €1200 gross per month. His employer pays him €15 per hour. If they agree to work 20 hours a week, Mart’s income is guaranteed. If he wants to, he can work extra hours to increase his salary even further, but that is his decision.

Will overtime no longer be paid?

It will be paid. Overtime is not going anywhere. By law, overtime occurs when a worker works more than the number of hours agreed in the contract, including extra hours.

Example: Mard’s contract says 20 hours a week and up to 10 extra hours. Mard has 20 hours of overtime and a contract of 20 days. If he works 40 hours in a week, 10 hours of this is overtime. For this, he must be paid 1.5 times the normal rate of pay or given equivalent time off, as the law used to be.

Will the new employment contracts deprive me of social guarantees?

On the contrary, it is the law that helps to provide more guarantees. Flexible working time is not about doing without, but about allowing workers to organise their workload more flexibly, while retaining all the rights they have under their employment contract.

Working under an employment contract means, among other things, the right to annual leave, restrictions on working time and rest periods, the employer’s guarantee of safety at work, guaranteed sick pay, pension insurance, parental benefit and paid overtime. This protects the worker better than the contractual arrangements used until now (employment contract, agency contract), which often lack these guarantees.

Example: Agnes has been working as a graphic designer on a contract basis, but had no contractual sickness insurance or holiday entitlement. Under the amendment to the Employment Contracts Act, her employer can offer her a flexible working contract: Agnes can continue to work to the same extent, but now she also has a definite right to holiday, sick pay and social security contributions are paid on her behalf.

Can my employer just “put me on hold” and pay me nothing?

No, you can’t. The law clearly says that if a worker is ready for work but the employer is unable to offer him or her the agreed amount of work, the employer must pay an average wage for the part of the work that he or she was unable to offer.

The same is true if the employer fails to provide the agreed amount of work over a long period of time, for example several months in a row. The worker is entitled to receive average pay for the time not worked or, if necessary, compensation on termination.

Example: Mart and his employer agreed that Mart would work 20 hours a week. When a major client of the company left and the employer could only offer 10 hours, he still had to pay for the remaining 10 hours – provided Mart was ready to work.

Changes will give workers more opportunities

The amendments to the Employment Contracts Act do not change the nature of the employment contract or reduce the rights of the employee. On the contrary, they are intended to give flexibility to those who need it and to improve the protection of their rights compared to the existing contractual obligations.

The amendments allow for flexible working time arrangements while providing social guarantees: limitation of working time and rest periods, the right to annual leave, minimum wage, safety at work guaranteed by the employer and guarantees on termination of contract. A guaranteed minimum hours agreement will ensure a predictable income, and it will be up to the worker to decide whether to work additional hours. Overtime will still be paid and the employer will not escape liability if he is unable to provide the work.

The aim of the amendment is to give flexibility to those who need it.

The article was published on Delfi.ee.