Pursuant to Estonian law, a person can take up traineeship in a company or institution can in only two cases:
- if a school sends a pupil or student to vocational or professional traineeship;
- if a person has become unemployed and the Unemployment Insurance Fund offers him or her work practice as a labour market service.
However, there are people who would like to participate in a traineeship in order to acquire a new job, but not through a school or the Unemployment Insurance Fund. Then, for example, a bilateral traineeship agreement is concluded with a company, laying down the tasks that the trainee will perform. The agreement sometimes includes a clause that if the trainee performs the tasks well, he or she will receive remuneration at the end of the traineeship.
Sometimes, however, the initiative to employ a trainee comes from a company that announces the possibility for traineeship and adds that if a trainee learns the tasks and is good at them, an employment contract will be concluded with him or her in the future.
The law does not provide an opportunity for the conclusion of such an agreement. But what kind of a contract can it legally be in this case?
In theory, the content of the contract may correspond to a contract for the provision of services whereby one party undertakes to teach and instruct the other party and allow the use of certain materials and equipment and the other party undertakes to perform tasks and acquire new knowledge, while avoiding harm to the instructor. However, such an agreement may actually refer to an employment relationship and probationary period, i.e. it may be a concealed employment relationship.
According to the Employment Contracts Act, an employment relationship is presumed if the person performing work is in subordination to the management and control of the employer and remuneration is paid for the work. However, not paying remuneration cannot be the only condition for claiming that there is no employment relationship. Value is created in the process of performing the work and this value benefits someone. This may serve as the basis to claim remuneration for the values created. Therefore, in the end, it may still be an employment relationship.
For the purposes of the Labour Market Services and Benefits Act, work practice is a labour market service for gaining practical experience provided to unemployed persons by employers with the aim of improving the knowledge and skills needed for the employment of the unemployed persons. In order to arrange work practice, the Estonian Unemployment Insurance Fund shall enter into an administrative contract with the employer, and the contract shall determine the number of persons participating in work practice, the content of work practice and the duration of work practice, meaning that such activity is always based on an agreement.
Traineeship offered by both a school and the Unemployment Insurance Fund shall comply with the requirements of the Occupational Health and Safety Act, although no employment contract is concluded.
Therefore, there shall be a legal basis for completing and conducting traineeship, i.e. a relevant agreement with a school or the Unemployment Insurance Fund. In other cases it is not possible to complete the traineeship and the persons providing and performing the work shall find another legal basis for co-operation. It is recommended to conclude an employment contract.