There is no existing employee board-level representation in Estonia and the legislation implementing the directive on employee involvement in European companies was passed with little debate.
For further information on the SE legislation, such as the choice of SNB members, click on the more button.
There is no existing board-level representation for employees in companies in Estonia and the issue of employee involvement in European companies has not been of great concern. Employer and trade union interest has instead been focussed on legislation implementing the EU directive on a framework for information and consultation rights at national level (2002/14/EC). The legislation transposing the directive on employee involvement in European companies was discussed with both employers and unions, and was passed with their support, but little debate.
Form of transposition
Directive was transposed by law and came into effect in February 2005 five months after the October 2004 deadline
The directive on employee involvement in European companies was transposed through the following legislation passed on 12 January 2005 which entered into force on 11 February 2005: Act on the involvement of employees in the affairs of a Community-scale undertaking, a Community-scale group of undertakings, or a European Company ( Üleühenduselise Ettevõtja, Üleühenduselise Ettevõtjate Grupi ja Euroopa Äriühingu Tegevusse Töötajate Kaasamise Seadus). This legislation, as the name indicates, also covered the legislation implementing the European works council directive, and many of the provisions are common. Legislation covering the changes necessary to adapt Estonian company legislation to the Regulation on European companies was passed on 10 November 2004 and came into effect on 10 December 2004.
Special negotiating body (SNB)
Selection of national members
Estonian members of the SNB are elected by a general meeting of all employees or, where there are several companies, by delegates elected at general meetings.
Estonian SNB members are elected by all employees at a general meeting. If there are several companies involved in Estonia, the SNB members are elected by a joint body consisting of at least three representatives from each company, elected at that company’s general meeting of employees. Their voting strength should be in proportion to the number of employees they represent. In choosing the SNB members from Estonia, the aim should be that each of the companies involved should be represented. If the number of companies is greater than the number of SNB places, those from the larger companies have priority (§54 and §17).
External trade union representatives
The presence of external union representatives on the SNB is neither specifically prohibited nor specifically permitted by the Estonian legislation.
The section of the legislation on the choice of the Estonian members of the SNB does not refer to the issue as to whether or not they may be external union representatives (§17).
Financing of experts
Funding of at least one expert guaranteed.
The section of the Estonian legislation on funding states that “reasonable expenses” of the SNB will be borne by the companies and specifically includes “the expenses that are connected with inviting at least one expert” (§61 and §20).
Standard rules under the fallback procedure
Allocation of national seats on SE representative body
Same arrangements apply as for SNB members – election by a general meeting of employees or by delegates elected at general meetings, where several companies are involved.
The same arrangements which apply for the choice of Estonian members of the SNB also apply for the choice of Estonian members of the SE representative body – known as the representative body of employees (Töötajate esinduskogu) in the Estonian legislation. In other words, they are elected by a general meeting of employees or by delegates elected at general meetings of employees, if several companies are involved (see section on SNB). However, in this case the legislation is specific and states that only employees may be members (§65).
Budget of representative body
The company should bear the expenses of the representative body, including at least one expert.
The company is obliged to “compensate for the expenses connected with the functioning” of the representative body. These specifically include organising meetings, interpreting services, travel and accommodation expenses of members and “the expenses of inviting at least one expert” (§69). This section states that the arrangements for covering the expenses of the SE representative body are the same as those for the expenses of a European works council (§32).
National procedure for the allocation of board seats
Arrangements for the election of employee board members are the same as those for the SNB – election by a general meeting of employees or by delegates elected at general meetings, where several companies are involved.
Estonian employee representatives at board level are to be chosen in the same way as Estonian SNB members – by election at a general meeting of employees or by delegates elected at general meetings, where several companies are involved (§76) (see SNB section).
Misuse of procedures and structural change
Misuse of procedures
Changes in the structure of an SE in its first year that affect whether it would have been covered by the board-level elements of the directive are assumed to be a misuse of procedure, unless the opposite can be proved.
There should be new negotiations, if “it can be concluded … that the purpose [of establishing an SE] was to leave employees without the right to be involved or limit their use of rights”. There is a presumption that changes in the first year after the foundation of an SE which affect whether or not a company would have been covered by the employment thresholds in the directive – eg having more than 25% of employees with participation rights in the course of a merger – are a misuse of procedures, unless the company can prove that this was not the case (§81). In addition, employee representatives only have one year in which to make a complaint to the court “starting from the day the member of the representative body of employees … was informed of the significant changes” (§82).
Other than where they are seen as a misuse, structural changes in the SE are not specifically covered in the Estonian legislation.
There is no automatic right to renegotiate the agreement if there are changes in the structure of the SE, unless they are seen as misuse of the SE procedure (see section on this). The one year time limit means that later changes are not covered.
Position of trade unions and employers
Unions and employers were consulted on the introduction of the legislation and they were broadly supportive of the proposals.
Unions and employers were involved in the discussions with the government on transposing the directive into national legislation. The original government proposal had been for three EU directives – on European works councils, on the involvement of employees in European companies and on establishing a general framework for informing and consulting employees – in a single piece of Estonian legislation. However, both the unions and employees asked for the legislation on a framework for information and consultation, which potentially has a much wider national impact, to be dealt with separately. This was agreed by the government and the legislation implementing the two other directives, including employee involvement in European companies, passed without significant debate.