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About Estonian employment contracts

Estonian labour laws are not complicated and are generally followed but we still see many employment contracts with illegal clauses or employers illegally bending the rules. Not everyone should be a lawyer but some basics are good to know:

1. An employment contract has to be in a written format. If the written format is not followed, it does not make the contract null and void. If a person starts doing work for which remuneration is considered normal, then an employment contract is deemed to have been concluded even if it is not in written. Needless to say, you should always demand a written contract. It can also be in English.

2. Make sure your work obligations are clearly stated in the contract or in its addendum. It is not OK and not clear for anyone if the obligations are given randomly via chat/Slack etc.

3. Employers cannot demand non-competition after the termination of your employment unless you are compensated. Employers will still add these kind of clauses.

4. When the employer wants to fire you, do not sign a document which says that you wish to resign. Another clever tactic by some employers.

5. Termination of the employment agreement has to be done following very clear procedures and not following those can render the termination illegal. There can be a wish to get rid of an employee fast and without proper compensation.

6. Firing an employee is usually not legal without prior warnings about breaches of contract or unsatisfactory performance.

7. In case of illegal termination, the employee can seek compensation. It can be done via court or by application to Labour Dispute Committee:

8. Changing the employment contract (for example salary) is not unilaterally possible and both parties need to agree (in written).

9. Contractual penalties can be applied in very limited cases, for example breaches of confidentiality and non-competition.


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