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.
For example, if the place of work is marked in the employment contract, i.e. Tallinn has been agreed upon, and the employee is sent to Pärnu to perform work duties, it qualifies as a domestic business trip. 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.
In case of a foreign assignment, the employee is to be paid a daily allowance, with the minimum being €22.37. The employer is also obliged to pay all expenses related to the business trip (travel expenses, accommodation expenses, and other expenses related to the business assignment, which are necessary for the performance of the task).
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. For sending a minor employee on a business trip, the prior consent of both the minor and their legal representative is required.
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.
By agreement of the parties, it is also possible to send an employee on a business trip for a longer period of time. 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 definition of a posted worker is regulated by Directive 96/71/EC of the European Parliament and of the Council regarding the posting of employees in connection with the provision of a service (Directive 96/71/EC). For the purposes of Directive 96/71/EC, a posted worker is a worker who, for a limited period, is posted by their employer to another EU Member State to provide a service within the framework of the company’s business activity or as a temporary agency worker or as a temporary employee by an employment agency.
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.
Regardless of the law applicable to the employment contract, the posted worker must be guaranteed certain working conditions in the country of destination. The posted worker's employer must ensure that the worker is subject to the following conditions in the country of destination:
- maximum work periods and minimum rest periods;
- minimum paid annual leave;
- remuneration, including overtime rates (this point does not apply to supplementary occupational retirement pension schemes);
- the conditions of hiring-out of workers, in particular the supply of workers by temporary employment undertakings;
- health, safety and hygiene at work;
- protective measures with regard to the terms and conditions of employment of pregnant women or women who have recently given birth, of children and of young people;
- equality of treatment between men and women and other provisions on non-discrimination;
- the conditions of workers’ accommodation where provided by the employer to workers away from their regular place of work;
- allowances or reimbursement of expenditure to cover travel, board and lodging expenses for workers away from home for professional reasons.
Read also: Posted Workers in the Construction Sector (ELA).
The difference between an employee on a business trip and a posted worker
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.
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.
Last updated: 10.08.2023