Estonia’s principle Labour law, the Employment Contracts Act, came into effect in 2009. It follows the pattern of a code that provides a guaranteed base for employees and can be seen as a further move towards liberalising the labour market under a principle known as flexisecurity. The parties to an employment contract are free to agree their own terms of employment. However, provisions that put employees in a worse position than those in the labour law Act will be void. All employment contracts must be in writing and further information about the employment must be provided to employees.
Employment contracts are either for fixed or indefinite terms. Fixed contracts cannot be for more than 5 years and must be for a good reason, such as seasonal work or covering for a temporary absence.
Neither Works Councils nor collective agreements are significant features of Estonian labour law and while trade unions are easy to establish they are not a major force in Estonia at present.