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A Bill that, among other things, concerns asking for more flexible working conditions and the registration of minors with the employment register passed the second reading in the Riigikogu today.

The Bill on Amendments to the Employment Contracts Act and Amendments to Other Associated Act (361 SE), initiated by the Government, will transpose the EU directive specifying the right of workers and officials with caring responsibilities to ask for flexible working or service conditions, e.g. part-time work or flexible working schedules, remote working arrangements, etc. The right to ask for flexible working conditions will not bring about an obligation for employers and administrative agencies to offer the conditions asked for but employers will have to provide reasons for a refusal in such situations. In addition, workers and officials with caring responsibilities will be provided additional protection upon cancellation of an employment contract or release from service and a reverse burden of proof in disputes on cancellation of employment contract or release from service.

In addition, upon entry into an employment contract with a 13-14-year-old minor, the waiting period of ten working days from the registration of the minor with the employment register will no longer apply. In the future, the relevant obligation will remain in place only upon employment of 7–12-year-olds. The purpose of the amendment is to reduce both employers’ and the Labour Inspectorate’s workload in respect of recruitment of 13-14-year-old young people. The amendment will help create more flexible working opportunities, while at the same time ensuring effective protection of minors in employment relationships. The Government cabinet gave its approval to the amendment on 18 June 2020.

The child leave regulation adopted with the amendments to the parental leave and benefit system in October 2018 will also be improved. From 1 April 2022, all parents of children under 14 years of age will be entitled to a child leave of ten working days for each child under 14 years of age. It will be calculated from the end of a parental benefit period and the amount of the remuneration paid for it will be 50 per cent of the average salary of the parent.

With an amendment made between two readings, the entry into force of the Act was postponed to 1 September 2022, in order to allow time for the Labour Inspectorate to develop an automated notification system for the working life information system. The new notification system will notify the employer, the registered minor as well as the legal representative of the child of the mandatory conditions and risks related to the specific work that should be taken into account.

The Riigikogu passed an Act

The Act on the Ratification of the Agreement between the Republic of Estonia and the Republic of Mauritius for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance and the Protocol thereto (385 SE), initiated by the Government.

In general lines, the agreement between Estonia and Mauritius is based on the model agreement drawn up by the Organisation for Economic Co-operation and Development (OECD). Differently from the model agreement, the agreement between Estonia and Mauritius also regulates the taxation of the income of professors and researchers. The source state may withhold income tax on the dividends and interests paid to a resident of the other state, but the tax so charged may not exceed 7 per cent of the gross amount. In the case of royalties, the highest permitted rate of the income tax withheld is five per cent of the gross amount of the royalties. According to the agreement, in certain cases, dividends, interests and royalties are exempt from tax in the source state.

The purpose of the agreements for the avoidance of double taxation is to facilitate investments between Contracting States. The agreement will enter into force when each of the states has ratified it and has notified to the other the completion of the procedures. The agreement will begin to be applied from the first day of January next following the year in which the agreement enters into force. As at April 2021, Estonia has agreements for avoidance of double taxation in force with 61 countries.

70 members of the Riigikogu were in favour of passing the Act.

Three Bills passed the first reading

The Bill on Amendments to the Covered Bonds Act and Other Acts (407 SE), initiated by the Government, will transpose an EU directive on the issue of covered bonds and covered bond public supervision and amending the requirements of related directives. It will also create a better opportunity for credit institutions to issue covered bonds the cover assets of which are located in different Member States. This concerns particularly the Baltic countries where largely the same banking groups operate and thereby it is possible to integrate the capital markets of the Baltic countries more.

The explanatory memorandum notes that, as at February 2021, the banks in Estonia had issued bonds in the value of 1.5 billion euro, a large part of which is made up of covered bonds. The following claims can be converted into bonds: housing loans, loans to the Government, local governments and legal persons governed by public law, and loans to companies that are secured by commercial real estate.

The Bill on Amendments to the Law of Obligations Act and the Consumer Protection Act (transposition of the Digital Content Directive, the Sale of Goods Directive and the Enforcement and Modernisation Directive) (404 SE), initiated by the Government, will transpose into Estonian law the EU Digital Content Directive, the new Sale of Goods Directive and the Modernisation Directive.

The proposed amendments mainly concern the purchase of software, smartphone applications, computer games and other digital content. In the future, the consumer rights will be more protected in this regard. Digital content also includes for example e-books and video and music files, and services include streaming services, cloud solutions, etc.

In the future, the situation where the consumer provides his or her personal data to the trader will also be treated as equivalent to the payment of money for content or a service. In such situations, the consumer is given contract law protection and the trader is held liable if the digital content is defective.

At the same time, the existing rules will be specified in connection with the extensive use of digital elements in various devices. In the future, it will be clearer what obligations the seller has for example regarding the digital elements of smartphones and fitness bands, and during what period the seller has such obligations. For example, when buying a smart sports watch from a store, the consumer expects to be able to use various exercise regimes with it, to connect it with other devices, etc. According to the Bill, the seller will also be responsible for defects in the digital elements of the watch, also in the case when a third person, such as Apple, supplies the digital content or service to the consumer.

It is important for traders that a number of contract law-related obstacles will be eliminated, and legal frameworks that so far have prevented cross-border trade will be harmonised. Digital content and digital services are not regulated in such terms in the current law. With the Digital Content Directive, this gap in EU law will be filled, and consumer protection will be ensured in this novel sector.

The Bill on the Ratification of the Agreement on Termination of the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Estonia for the Promotion and Protection of Investments (401 SE), initiated by the Government.

In 2018, the Court of Justice made a decision that put an end to the years-long dispute about whether, under bilateral agreements on the promotion and protection of investments, EU Member States can have recourse to arbitral tribunals for identification of violation. The Court found that that was not in compliance with EU law. After that, Member States, including the United Kingdom, declared that all investment protection treaties within the EU would be terminated jointly by a multilateral agreement or under bilateral agreements. The Agreement for the Termination of Bilateral Investment Treaties between the EU Member States was signed on 5 May 2020 and it entered into force on 29 August 2020. Before that, Estonia had terminated the bilateral agreements on the promotion and reciprocal protection of investments with Italy, Czechia, Denmark and Poland.

The United Kingdom decided not to join the EU joint agreement, and decided to terminate the bilateral investment treaties with EU countries bilaterally. Austria, Sweden and Finland did the same. Estonia has ratified bilateral agreements with Sweden and Finland, and the agreement with Austria is waiting to be signed.

The need to terminate the treaties arises from EU legislation according to which all investors from EU Member States must be treated equally. The agreements for the promotion and protection of investments concern areas that are regulated by EU law – in particular the freedom of establishment and the free movement of capital and payments. Thus, the protection of investments and equal treatment of investors is regulated by EU law, and there is no need for bilateral agreements between member states.

Since the United Kingdom is no longer a member of the EU, equal treatment of investors from the EU and the United Kingdom is now regulated by the Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part.

Two drafts were dropped from legislative proceeding

The Draft Resolution of the Riigikogu “Formation of the Riigikogu Committee of Investigation to Ascertain the Legality and Proportionality of the Police Operation in the City Centre of Tallinn in April 2021” (379 OE), submitted by the Estonian Conservative People’s Party Faction, provided for the formation of a Riigikogu committee of investigation to ascertain the legality and proportionality of the conduct of the Police and Border Guard Board and other power structures in order to preclude arbitrary and unlawful restriction of constitutional civil liberties.

During the debate, Mart Helme (Estonian Conservative People’s Party) and Jürgen Ligi (Reform Party) took the floor.

The Constitutional Committee as the lead committee moved to reject the draft Resolution at the first reading. 53 members of the Riigikogu voted in favour of the motion and 18 voted against.

The Bill on Amendments to the Status of Members of the Riigikogu Act (396 SE), initiated by the Social Democratic Party Faction and Member of the Riigikogu Raimond Kaljulaid, provided for saving a necessary amount in the budget of the Riigikogu, in order to avoid cuts in the budget of long-term foresight which is an important part of knowledge-based decision-making. Instead of that, under the Bill, the necessary amount would have been obtained at the expense of the expenses claims of members of the Riigikogu.

During the debate, Jevgeni Ossinovski (Social Democratic Party) and Peeter Ernits (Estonian Conservative People’s Party) took the floor.

The Constitutional Committee as the lead committee moved to reject the Bill at the first reading. 65 members of the Riigikogu voted in favour of the motion and 12 voted against.

The sitting ended at 6.35 p.m.

Verbatim record of the sitting (in Estonian)

The video recording of the sitting will be available on the Riigikogu YouTube channel.
(Please note that the recording will be uploaded with a delay.)

Riigikogu Press Service
Veiko Pesur
Phone: +372 631 6353, +372 5559 0595
E-mail: [email protected]
Questions: [email protected]