In a challenging economic situation, there are more labor disputes as employers, facing difficulties, try to reduce costs by dismissing employees in the most economical way. In case of disagreements between the parties of the employment contract, a labor dispute committee or court can resolve the dispute. According to lawyer Katrin Martis, the quickest and most cost-effective way to resolve a dispute is through the labor dispute committee.
HUGO.legal lawyers assisted 1261 people last year in connection with labor disputes, and in most cases, the labor dispute committee helped resolve the dispute.
Katrin Martis, former head of the labor dispute committee and current lawyer at HUGO.legal, recommends that when disputes arise, it’s best to first try to resolve them through mutual agreement so that both parties are satisfied. If that doesn’t work, the labor dispute committee should be involved. “Labor disputes are a part of lawyers’ daily work, including representing clients in the labor dispute committee. Often, the parties are already in such a deep conflict that reaching any agreement without external help is impossible, and in that case, the most reasonable solution is to involve the labor dispute committee – the process is quick, the decision-makers are independent, and it’s free for the individual. Another option is to go to court, but that is more time-consuming, and one must pay state fees and lawyer’s fees in certain cases,” Martis said.
Martis advises consulting with a lawyer before approaching the labor dispute committee, as submitting a correct application is an important first step.
When should you approach the labor dispute committee?
According to Katrin Martis, the labor dispute committee can be approached for almost any issues arising from employment relationships. Her clients mainly approach her regarding salary and compensation disputes, termination disputes, and when confirming an employment relationship. “The labor dispute committee bases its work on the Labor Dispute Resolution Act and resolves disputes arising from employment relationships. However, it is important to note that this law does not apply to disputes over compensation for damage caused by a workplace accident or occupational disease,” she said.
Three key situations in which an employee should definitely approach the labor dispute committee:
- When the employer has failed to pay wages and benefits
- Employment relationship determination – if a mandate or contract for work has been concluded that, in essence, matches the characteristics of an employment contract, the employment relationship must be determined in order to receive social guarantees
- If the employer’s termination of the employment contract is invalid
The decision of the labor dispute committee will be made known to the parties within ten working days after the hearing.
Martis advises keeping in mind that salary claims can be made within 3 years, and a termination dispute can be contested within 30 calendar days from the day the employee received the notice of termination, not from the date specified in the termination. Other disputes expire within 4 months.
What is the labor dispute committee?
The labor dispute committee is a non-judicial body that resolves labor disputes, and it is independent, making decisions based on laws, regulations, international agreements binding on Estonia, and rules regulating employment relationships, including collective agreements and labor contracts.
Labor Dispute Resolution Act
The Labor Dispute Resolution Act is the law that the Labor Dispute Committee follows in its work, aiming to resolve disputes arising from employment contracts (civil law contracts are the domain of courts). The Labor Dispute Resolution Act does not apply to disputes over compensation for damage caused by a workplace accident or occupational disease.
A work contract can, in some cases, be considered an employment contract that guarantees the employee social guarantees
Unfortunately, it is still common to work without an employment contract or under a contract for work. If there is no written employment contract, it can be nearly impossible to prove the employment relationship. Section 5 of the Labor Contract Act outlines the conditions that must at least be present in a written employment contract (who the contract is between, whether it’s a fixed-term or indefinite-term contract, full-time or part-time work, probation period, when the employee started work, salary, pay date, etc.). If a contract for work meets the criteria of an employment contract under Section 1 of the Labor Contract Act, a request can be made to establish the contract as an employment contract.
Since salary agreements cannot be proven by oral statements, a bank statement from the employee should be used. If the statement shows that the salary was the same every month, it can be assumed that the salary was as stated on the bank statement. If the salary cannot be established in this way, the salary should be based on what is typically paid for similar work under similar conditions (Section 29, paragraph 2 of the Labor Contract Act). This can include salary statistics for similar workers in the same company or industry, or statistics from the National Statistics Bureau. The minimum wage set by the Government of the Republic must be adhered to, and the salary should be agreed upon as a gross amount with the employer responsible for withholding taxes and contributions.
What are the differences between an employment contract and a civil law contract?
Work is typically performed under an employment contract, but it can also be based on other civil law contracts (mandate contracts, contracts for work, etc.). An employment contract is a type of civil law contract, falling under the category of service agreements, but it differs from other civil law contracts.
Social guarantees are associated with an employment contract
When distinguishing an employment contract from other service contracts, it is important to note that a person working under an employment contract is guaranteed greater rights and better protection under the law compared to individuals working under other contracts. To determine whether a specific case involves an employment contract, one must consider the distinctive characteristics of the contract, such as work being performed under the employer’s guidance, at a specific time, and with specified tasks at a fixed workplace. The employee is involved in the company’s activities. The employer must inform employees about the terms of their employment contract or relationship. The job description should be clear and understandable so that the employee knows the tasks expected of them. The employer owns the tools required for the work. Payment for the work is periodic. The employer is obliged to ensure that the employee receives statutory benefits (vacation, rest time, and wages at least at the statutory minimum wage). The employer has the right and obligation to monitor the employee’s compliance with their job duties. The employer bears the risk associated with the work.
Contract for Work
A contract for work, on the other hand, is a contract regulated by the Civil Code, where the parties are the client and the contractor. Under the contract for work, the contractor agrees to perform a specific task or provide a specified service, as agreed upon with the client. A contract for work is concluded for a fixed term or for completing a specific task. The manner, timing, and with whom the contractor will perform the work or provide the service are not important for the client, nor does it require constant oversight. The contractor must complete the work or service using their own instruments, tools, and equipment, unless otherwise agreed in the contract. Upon completion, the client and contractor sign a delivery and acceptance document, which records the volume and duration of the work performed.
The contract is considered an employment contract unless proven otherwise
In situations where distinguishing an employment contract from other service contracts is difficult, the Labor Contract Act comes into play. According to the Labor Contract Act, a contract is considered an employment contract unless proven otherwise. This means that in case of a dispute, the employer must prove that the contract is a civil law contract, not an employment contract.
