On the motion of the Legal Affairs Committee as the leading committee, the first reading of the Employment Contracts Bill (299 SE), initiated by the Government, was concluded. The purpose of the Bill is to regulate the relationships between employees and employers. The initiator pointed out that updating of the regulation concerning employment contracts would increase both the flexibility and security of employment relationships.

When compared to the Act which is currently in force, an employment relationship entered into on the basis of the new Employment Contracts Act would follow the principles of the Law of Obligations Act, provide the possibility of more flexible organisation of working time and reduce the costs incurred by an undertaking upon termination of an employment relationship. The new Bill enhances the flexibility of the labour market by better contributing to the creation of new jobs and it also improves the reaction capacity of undertakings.

In order to increase the security of employees, limitations for cancellation of a fixed-term employment contract are established for employers and more protection is also ensured for employees by the increase of the unemployment insurance benefit in the first hundred days to 70 per cent of the employee’s average wages in the last twelve months, instead of the current 50 per cent. Also, the rate of unemployment allowance is increased.

The new Employment Contracts Bill also facilitates improvement of the system of lifelong learning which will significantly increase the competitiveness of people in the labour market.

The motion made by the Estonian Centre Party Faction to reject the Bill at the first reading was not supported. 48 members of the Riigikogu voted against the motion and 25 members of the Riigikogu voted in favour.

The term for submission of motions to amend the Bill is 23 October, 6.00 p.m.

The Riigikogu Press Service