Eesti Firma provides legal services in Estonian labour law. Our employment lawyers advise and represent employees and employers in dismissals, redundancies, unpaid salary claims, workplace disputes and staff documentation. This page sets out what employment law in Estonia gives you in the most common situations, which deadlines apply and where a lawyer makes a difference.
Quick answer
An unfair dismissal in Estonia must be contested within 30 calendar days of receiving the termination notice. Unpaid salary can be claimed for three years, but holiday compensation and redundancy pay (severance) only for four months. The employer’s notice period is 15 to 90 calendar days depending on length of service, and redundancy pay is one month’s average wages. Disputes go to the Labour Dispute Committee (no state fee, about 45 days) or to court.
Employment Lawyers for Employees and Employers in Estonia
We act on both sides of the employment relationship, so we know how each side argues. Our advice rests on the current Employment Contracts Act and court practice. Unsure whether the matter justifies a lawyer? See our guide on when you need legal advice.
Typical Situations for Employees
- Your salary, holiday pay or final settlement has not been paid.
- You have been fired, laid off or made redundant and doubt that it was lawful.
- You are being pushed to resign or to sign a termination agreement.
- The employer demands compensation for damage or withholds it from your pay.
Typical Situations for Employers
- You need to dismiss an employee without inviting a wrongful termination claim.
- A redundancy or reorganisation needs planning and paperwork.
- An employee has caused damage, left without notice or joined a competitor.
- You are hiring a non-EU national who needs a work visa, or your foreign company is taking on its first employee in Estonia.
Paid consultation with an employment lawyer
Send us the contract and the document that triggered the problem. We will tell you which deadline is running and what your options are. Consultations are charged at €75 per hour; we do not provide free legal aid.
Termination of Employment in Estonia: Notice Periods, Redundancy and Severance Pay
An employee with an open-ended contract may resign with 30 calendar days’ notice and without giving a reason. An employer has no such freedom: it may terminate the employment contract only for a good reason arising from the employee (long-term incapacity, unsuitability, breach of duties) or for economic reasons (redundancy or lay-off, in Estonian koondamine). The termination notice must be in a form reproducible in writing and state the reason.
| Length of service | Employer’s notice period | Redundancy pay from the employer | Redundancy benefit from Töötukassa |
|---|---|---|---|
| Less than 1 year | 15 calendar days | 1 month’s average wages | – |
| 1 to 5 years | 30 calendar days | 1 month’s average wages | – |
| 5 to 10 years | 60 calendar days | 1 month’s average wages | 1 month’s average wages |
| 10 years or more | 90 calendar days | 1 month’s average wages | 2 months’ average wages |
Statutory severance pay is due only on redundancy; a dismissal for conduct or performance carries none. Shortened notice is compensated with the average daily wage for each working day missed. During a probationary period (up to four months) either party may end the contract with 15 calendar days’ notice, but the employer’s reason must relate to suitability for the job.
Pregnant employees and employees on parental leave cannot be made redundant unless the employer ceases activity. Employee representatives and parents of a child under three have a preferential right to keep their job.
Mutual Termination Agreement or Pressure to Resign
Employers often propose a resignation or a termination agreement instead of a redundancy. The consequences differ sharply: you receive no statutory redundancy pay, and instead of the income-based unemployment insurance benefit only the much lower base-rate benefit. Nobody can be forced to sign, so have the text reviewed first.
How to Dismiss an Employee Lawfully: Employer Checklist
- Identify the legal ground: a reason arising from the employee or redundancy. Termination without cause is not open to employers.
- For conduct or performance, give a warning first (in writing, for proof) and act within a reasonable time after learning of the breach.
- Check the protections: pregnancy, parental leave, employee representatives. For incapacity, unsuitability and redundancy, offer other work where that is reasonable.
- Give a reasoned termination notice in a form reproducible in writing and observe the notice period, or pay for the missing days.
- Pay the final settlement on the last day of employment: earned wages, compensation for unused holiday and, on redundancy, the severance.
Unfair Dismissal: How to Challenge a Termination
A dismissal without a legal basis, or in breach of the law, is void, but only if it is contested in time.
30-day deadline
An application to have the termination declared void must reach the Labour Dispute Committee or the court within 30 calendar days of receiving the termination notice, not of the last working day. If the deadline is missed and not restored, the dismissal is valid from the outset.
What to Do After an Unlawful Dismissal
Keep the termination notice, the contract, correspondence and warnings, and contact a lawyer in the first days rather than the last ones. We check whether the stated reason holds and whether the warning, the offer of other work and the form requirement were observed. Then we file the claim and represent you.
If the dismissal is declared void and neither side asks for the contract to be ended, you return to work and receive the wages lost in the meantime. Usually one party does ask, and the employee is awarded three months’ average wages. For a pregnant employee, an employee entitled to maternity leave or an employee representative the figure is twelve months’ average wages, and the employer’s request to end the contract is not granted. The committee or court may raise or lower the amount.
Unpaid Wages: How to Recover Your Salary
If your salary is late or not paid at all, you can claim the unpaid amount plus late-payment interest. On the last day of employment the whole final settlement falls due. Mind the time limits: wages, including overtime, night and public-holiday pay, can be claimed for three years, while holiday pay, compensation for unused holiday and redundancy pay must be claimed within four months.
What to Do if Your Employer Does Not Pay Your Salary
We start with a reasoned demand letter, which is often enough. If it is not, we file the wage claim with the Labour Dispute Committee or the county court; a final decision is enforced through a bailiff.
A considerable delay in pay is also a fundamental breach by the employer. You may then terminate the contract without the usual 30 days’ notice, claim three months’ average wages and keep the right to the income-based unemployment insurance benefit. The notice must state the reason and be given within a reasonable time, so prepare the wording with a lawyer.
If the Employer Is Insolvent
When an employer is declared bankrupt, or bankruptcy proceedings end for lack of assets, the Unemployment Insurance Fund (Töötukassa) pays an insolvency benefit, applied for through the bankruptcy trustee. The benefit covers unpaid wages for up to the last three months of work, holiday pay and termination benefits, each within caps tied to the Estonian average wage. If the company has simply stopped paying, employees may file the bankruptcy petition themselves.
Labour Dispute Committee or Court: How Employment Disputes Are Resolved
We first try to settle through negotiation. When that fails, the labour dispute goes to the county court or to the Labour Dispute Committee (töövaidluskomisjon), an independent extrajudicial body attached to the Labour Inspectorate and Estonia’s counterpart to an employment tribunal.
The committee charges no state fee and sets no upper limit on the claim. Applications are generally reviewed within 45 calendar days, and hearings can be attended remotely. Proceedings are in Estonian, so the application and translations of foreign-language evidence must be in Estonian. Only claims for damage to health from an occupational accident or disease go straight to court.
A decision becomes binding unless one party takes the dispute to the county court within 30 calendar days of receiving it. Before the committee each party bears its own costs; in court the losing party can be ordered to reimburse legal costs, including those of the committee stage.
| Type of claim | Time limit |
|---|---|
| Contesting the termination of an employment contract | 30 calendar days from receipt of the notice |
| Wages, overtime, night work and public-holiday pay | 3 years from the payday |
| Holiday pay, compensation for unused holiday, redundancy pay and other employment rights | 4 months from learning of the violation or from the end of employment |
| Employer’s claim for damage caused by an employee | 12 months from learning of the damage, no later than 3 years after it was caused |
Employee Liability: Compensation for Damage Caused at Work
An employee who breaches the contract intentionally is liable for the entire damage. For negligence, liability depends on the employee’s duties, the degree of fault, the instructions given, working conditions and the employer’s own opportunities to prevent the loss. The employer may deduct the damage from wages only with the employee’s consent; otherwise the claim must be filed with the committee or court within 12 months of learning of the damage. We act for employers in proving the loss and for employees in defending against unfounded claims and deductions.
An agreement on proprietary liability (§ 75 of the Employment Contracts Act) makes an employee liable for entrusted property regardless of fault. It is valid only if it is in writing, reasonably delimited in space, time and objects, covers property accessible only to the employee or a defined group, sets an upper limit of liability and gives the employee reasonable extra compensation. Otherwise it is void.
Employment Contracts, Contractors and Board Members
Properly drafted documents prevent most disputes. We draft and review employment contracts (including the flexible working-time agreements now permitted by law), job descriptions, confidentiality, liability and termination agreements. A post-employment non-compete binds the employee only if it is in writing, lasts no longer than one year and the employer pays reasonable monthly compensation for it. For employees, we review the proposed document, point out the risks and negotiate with the employer.
Employee or Contractor: Disguised Employment
What a contract is called does not decide what it is. A person who works under the company’s direction and control, at the time and place it determines, is an employee even if the paper says contract for services or freelancer agreement. The Labour Dispute Committee can establish the employment relationship, correct the employment register and award minimum wage, holiday pay and overtime. For the company, such misclassification also means tax arrears.
A management board member is not an employee in that role. The Employment Contracts Act does not apply, so a board member can be removed at any time, and notice or compensation is due only if the board member agreement provides for it.
Hiring Foreign Workers: Work Visas and Residence Permits
Under the Aliens Act a non-EU national needs a legal basis both for staying and for working; Estonia issues no separate work permit. The fastest route is the registration of short-term employment with the Police and Border Guard Board, filed by an Estonian-registered employer before work starts and combined with a long-stay (D) visa. As a rule the work must be full-time and paid at least the Estonian average gross monthly wage, and it may last up to 365 days within a 455-day period. Longer engagements require a residence permit for employment, generally with the consent of the Unemployment Insurance Fund and within the immigration quota unless an exemption applies. We check which regime fits the position and prepare the documents.
Employment Lawyer Fees and How We Work
- Experience: our labour lawyers have more than 15 years of practice, for employees and for employers.
- A realistic assessment first: what the claim is worth, which deadline applies and whether proceedings make economic sense.
- Clear pricing: work is billed at €75 per hour, and you receive a cost estimate before we start.
- Tallinn office, remote service: we meet clients in Tallinn and work online with clients elsewhere in Estonia and abroad.
Describe your situation and attach the key documents. Everything you send us remains confidential.
Frequently Asked Questions
The employer gives 15 calendar days’ notice for less than a year of service, 30 days for one to five years, 60 days for five to ten years and 90 days for ten years or more. A resigning employee gives 30 days; during probation it is 15 days for both sides.
No. An employer may terminate only for a reason arising from the employee or for redundancy, and must state it in the notice. Even during the probationary period the employer has to explain why the employee is unsuitable.
One month’s average wages from the employer. The Unemployment Insurance Fund adds one month’s average wages after five years of service and two months’ after ten years.
30 calendar days from receiving the termination notice. Compensation for unlawful dismissal is as a rule three months’ average wages.
After a resignation or a mutual termination agreement only the base-rate unemployment insurance benefit is available. The income-based benefit is kept if you terminate because of the employer’s fundamental breach, such as unpaid salary.
No. Applications are generally reviewed within 45 calendar days, must be in Estonian, and each party bears its own costs.
Legal work is charged at €75 per hour. Free legal aid is not provided.
