Living and working in Estonia

Government responses to inflation primarily focused on social benefits, such as increasing family benefits and introducing a system whereby the duration of unemployment insurance benefit is determined by the state of the labour market. There were no new developments on working time. At the end of 2023, discussions began on increased rest time requirements, which take effect in 2024.

Unprecedentedly, the 2023 coalition agreement included an increase in the minimum wage, reflecting a political commitment to this initiative. Another important development is that a goodwill agreement for raising the minimum wage proportionate to the average wage was signed by the peak-level social partners and the Minister of Economy and Information Technology.

Historically, Estonia has experienced a low incidence of labour disputes and strikes, so 2023 stood out as several labour disputes and warning strikes took place. Most notable is warning strike that began the education workers’ collective wage negotiations, which led to a strike in 2024.

The government is not actively promoting social dialogue. Collective bargaining coverage remains low, and interest in the topic appears marginal, aside from sporadic mentions in media articles. There is no clear agenda or action plan by the government or the social partners on either how to take account of inflation in wage negotiations or to promote social dialogue. The general lack of interest in collective bargaining is something to be improved upon, as emphasised by the newly elected leader of Trade Union Confederation.

There has been some progress in workplace health and safety via legislative changes by the government. In a positive move, going beyond mandatory medical examinations for employees, employers are now legally required to organise a more comprehensive occupational health service. This service includes a consultation with an occupational health doctor, who reviews the company’s risk assessment, analyses risks holistically, conducts medical examinations and proposes improvements to working conditions. The increased policy and public attention on mental health in recent years resulted in the official inclusion of work-related stress in the list of occupational diseases in 2023.

The skills system reform, started in 2023, will significantly impact adult education. The reform aims to enhance linkages between the education system and the labour market, providing individuals with digital tools to identify the necessary skills for their jobs and how to acquire them. While the social partners have opportunities to participate in activities within the reform and express their opinions, they do not hold a significant or leading role in implementation.

Lastly, due to a substantial reorganisation of government ministries in Estonia, policy fields related to employment, employment relations and employment conditions moved under the jurisdiction of the Ministry of Economic Affairs and Communication from the Ministry of Social Affairs, along with the Estonian Unemployment Insurance Fund and Labour Inspectorate. Furthermore, the Ministry of Climate and the Ministry of Regional Affairs and Agriculture were created as a result of the reorganisation of the Ministry of Environment and the Ministry of Agriculture. The impact of these changes on policy direction will be observed in the coming years.