Business trip from Estonia to other countries
- The employer has the unilateral right to send the employee on a business trip.
- A pregnant employee and an employee raising a child under the age of three or with a disability may only be posted with their consent.
The employer has the unilateral right to send the employee on a business trip
The employee must perform their duties in the agreed-upon place of performance of work or, if there is no agreement, in the employer’s place of business that is most closely associated with the employment relationship (location of the company’s directing body), if the place of performance of work has not been agreed upon. The place of performance of work is generally agreed upon.
Pursuant to the Employment Contracts Act, an employee is on a business trip if the employer sends them to perform work duties in a different place from their usual or agreed place of work, including within Estonia, i.e. domestically as well as a business trip abroad.
If the place of work is Tallinn, and the employee is sent to Finland to perform work duties, then it is a business trip abroad. If the employment contract states a foreign country as the place of work (e.g. Finland, Norway), where working takes place all the time, then the stay there is not considered a business trip.
If a prerequisite of the job is going on business trips, this should be explained to the employee upon their recruitment. It would also be reasonable for the parties to agree upon whether and how the time spent travelling to and returning from the business trip will be remunerated, as the Employment Contracts Act does not stipulate that this time is working time and therefore remunerative. However, if travelling for such a purpose takes place during the agreed-upon working hours, it can be assumed that an order of the employer is being complied with and the agreed remuneration must be paid.
Prior consent is required for a business trip if:
- a pregnant woman and an employee raising a child under the age of three or a disabled child is sent on a business trip;
- an employee who is a minor is sent on a business trip (consent of the minor and their legal representative is required);
- the business trip lasts for more than 30 consecutive calendar days.
If the employer and the employee agree that the employee will work in another country for more than one month and the law of the Estonian state applies, the employer must also notify the employee prior to their departure (subsection 6 (8) of the Employment Contracts Act):
- of the time to be spent working in the country;
- the currency of payment of the wages;
- the benefits relating to the stay in the country, which the employer makes available to the employee;
- the conditions for returning home.
The difference between an employee on a business trip and a posted worker
A posted worker is distinguished from a worker who is on a business trip in particular by the fact that the posted worker always has a specific recipient, i.e. a recipient of services, a parent company or a subsidiary belonging to the group or, in the case of temporary agency work, a user undertaking. Thus, the posted worker has a company in the host country which organizes their work or the working environment. In the case of Estonia, when going on a business trip, for example, to participate in a trade fair, no one is accepting an employee in the destination country.
Employee on a business trip
Pursuant to the Employment Contracts Act valid in Estonia, an employee on a business trip is an employee who has been sent by the employer to a place outside of the place of performance of work prescribed in a valid contract of employment in Estonia, either domestically or abroad, but not for a period longer than 30 consecutive calendar days, unless the employee and the employer have agreed upon a longer term (section 21 of the Employment Contracts Act).
A posted worker
Pursuant to subsection 3 (1) of the Working Conditions of Employees Posted to Estonia Act, an employee posted to Estonia is a natural person who normally works in a Member State of the European Union, a Member State of the European Economic Area, or the Swiss Confederation, and whom the employer posts to work in Estonia for a specified period of time for the provision of a service.
The minimum rate, conditions and procedure for payment of compensation for the expenses
Regulation No 110 of the Government of the Republic of 25 June 2009 ‘Establishing the procedure for the payment of compensation for business trip expenses, and the minimum rate, conditions, and procedure for the payment of daily allowances for business trips abroad’ provides the procedure for payment of compensation for expenses incurred in the performance of job duties and the minimum rate, conditions, and the procedure for payment of daily allowances for business trips made abroad.
For reimbursement of business trip expenses and payment of daily allowances, the employer must draw up a written decision. This document that serves as the basis for the payment of business trip expenses must indicate the destination, duration and purpose of the business trip as well as the rates of the reimbursable expenses and the daily allowance. Employees have the right to demand compensation for expenses that may be incurred due to a business trip within a reasonable time before the start of the business trip, including:
- travel and accommodation expenses in connection with the business trip;
- expenses incurred in connection with the purchasing of transport tickets;
- travel insurance;
- visa processing costs;
- luggage delivery costs.
If the employer fails to make an advance payment to compensate for such expenses within a reasonable period, the employee will have the right to refuse to go on the business trip. All expenses related to business trips are reimbursed on the basis of a document certifying the expenses. Under the abovementioned regulation, daily allowances are not required to be paid for time spent on domestic business trips.
The minimum daily allowance for business trips abroad is €22.37 per day. The maximum tax-free amount is €50 for the first 15 calendar days of a calendar month and €32 for the remaining days. Daily allowance must be paid for a business trip abroad if the destination is located at least 50 km from the border of the settlement where the place of work is located.
Employers may reduce the rate of the daily allowance for business trips abroad by up to 70% if free meals are provided for the employee during the stay abroad.
Daily allowance must be paid for the day of departing on a business trip abroad if the vehicle travelling to the foreign country departs no later than 21:00. Daily allowance must be paid for the day of arrival from a business trip abroad if the vehicle arrives after 03:00. In other words, if at least three hours of the business trip fall within the relevant date.
An employee may be a posted worker and be on a business trip at the same time. In this case, both the provisions on business trip set out in the Employment Contracts Act and the European Union directives on posted workers (in particular 96/71/EC, 2014/67/EU, 2018/957/EU) must be complied with. This means that if a worker is in the status of a posted worker while working abroad, he or she must be guaranteed certain conditions in force in the country of destination and at the same time be paid a daily allowance.
Example 1 An employee (builder) usually works in Estonia, i.e. Estonia is indicated as the place of work in the employment contract. Estonian law therefore applies to the employment contract. The builder's employer’s contractor is a Finnish company to which the service is provided sometimes. This means that the employer occasionally sends its employees to work for a Finnish company (e.g. to install a modular house manufactured in Estonia).
As the employee's place of work is Estonia, the employee is on a business trip abroad while working in Finland. Thus, the employee must be paid a daily allowance during the business trip in Finland. In addition, the employee is also a posted worker, as he or she is temporarily posted by the employer to provide a service to a Finnish company. This means that the employee must also be guaranteed the conditions listed above (including the salary valid in Finland).
Example 2 A builder works normally in Finland. Thus, the employee's employment contract must state Finland as the place of work and the employee is also subject to Finnish law (section 35 subsection 2 point 1 of the Private International Law Act) unless it is established in accordance with subsection 3 that the employment contract is more closely connected with another country. In this case, it is not an employee posted from Estonia and he or she is not paid a daily allowance for a business trip abroad.
Example 3 A builder who works in several countries but is employed in Estonia is likely to be subject to Estonian law (section 35 subsection 2 point 2 of the Private International Law Act) unless it is established in accordance with subsection 3 that the employment contract is more closely connected with another country. For example, the employee's "base" is in Finland, from where the employee goes to perform work in Norway and Sweden. In this case, the law applicable to the employment relationship is Finland's. Also, the employee is not an employee posted from Estonia and he or she is not paid a daily allowance. However, if the starting point is Estonia, the usual place of work can also be Estonia, which means that the worker is a posted worker and is also entitled to a daily allowance for posting abroad.