Employee Rights in Case of Redundancy
Redundancy is defined as the extraordinary termination of an employment contract by the employer due to economic reasons. In Estonia, this process is strictly governed by the Employment Contracts Act (TLS).
Notice Periods
According to § 97 (2) of the TLS, the employer must provide advance notice of termination based on the employee's length of service:
- Less than 1 year: at least 15 calendar days.
- 1 to 5 years: at least 30 calendar days.
- 5 to 10 years: at least 60 calendar days.
- Over 10 years: at least 90 calendar days.
Failure to provide notice entitles the employee to compensation equal to the salary they would have earned during the notice period (§ 100 (5) TLS).
Compensation and Final Settlement
Upon redundancy, the employee is entitled to:
- Final Settlement: Payment of outstanding wages, accrued vacation pay, and other benefits.
- Redundancy Compensation: The employer must pay compensation equal to one month's average salary (§ 100 (1) TLS).
- Unemployment Insurance Fund: If the employee has worked for more than 5 years, the Unemployment Insurance Fund provides additional benefits under the Unemployment Insurance Act.
Priority for Retention
Under § 89 (5) of the TLS, employee representatives and employees raising a child under three years of age have priority for retention in the event of redundancy. Employers must strictly adhere to this principle when selecting who to make redundant.
What to do next?
If you receive a redundancy notice, ensure it is in writing and clearly states the reasons. If you believe the redundancy is unjustified or violates the law, you have the right to file a claim with the Labor Dispute Committee or the court within 30 calendar days.
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