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Collective Redundancy

Viimati uuendatud: 02.11.2017

Prior to collective redundancy, the employer must consult with the employees’ trustee or, if there is none, the employees themselves. How many employees must actually be made redundant shall become clear after the consultations.

For the trustee to be able to make suggestions at consultations, the employer must share at least the following data in a written and reproducible form:

  • Reasons for the collective redundancy;
  • Number of employees and their positions at the company;
  • Number and positions of employees to be made redundant, together with choice criteria;
  • Time period during which the employees shall be made redundant;
  • Way of calculating additional compensation to employees as stipulated by law or the collective agreement.

After consulting with the employees, the employer must present the aforelisted data also to the Estonian Unemployment Insurance Fund. If data is present, the Fund can successfully prepare for alleviating the collective redundancy consequences, e.g. supplementary training or finding new jobs for the people let go.

During the consulting, the trustee (or employees, if none exists) has a right to meet the employer’s representatives and make suggestions related to the redundancy, which must be presented in 15 days starting from the receipt of the corresponding notice. During the consultations, parties should come to an agreement regarding the applied measures. The employer is not obliged to accept proposals made by the employees, but they must ground their decisions to the employees.

After consultations, the employer must present data about the consultations to the Unemployment Insurance Fund and the trustee (or employees, if none exists). The trustee then has 7 calendar days to provide their opinion to the Unemployment Insurance Fund about the collective redundancy.

In the case of collective redundancy, it is important to stress that the actual redundancy need will be clear after consulting with the employees’ trustee (or employees, if none exists). The employer cannot have made a collective redundancy decision prior to discussions with employees. Only after consulting with employees and notifying the Estonian Unemployment Insurance Fund will the employer have the collective redundancy right and can give the redundancy notices to the employees. If the employer has not followed the employees’ notification and consulting obligation nor notified the Unemployment Insurance Fund prior to presenting the redundancy notice, the employment relationship redundancy is null and void.

The collective redundancy shall take effect after the notification term passes, but not earlier than 30 calendar days starting from the day when the Estonian Unemployment Insurance Fund received data sent after the consultations. During this term, the Fund shall seek solutions for employment problems related to the collective redundancy. If these can be solved during a shorter time period, the Fund may shorten the term. However, the Fund is also entitled to extend the period to 60 calendar days.

If the employment contracts end prior to the 30 calendar day term because the employer has violated its’ obligations, the employees are entitled to demand work until the 30 calendar day term is reached, or remuneration for the less notified time.

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