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.
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.
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 on the basis of an employment contract, and whom the employer posts to work in Estonia for a specified period of time for the provision of a service.
We can talk about posted workers if:
1) The undertaking posts the employee to the territory of the Member State on its behalf and under its direction on the basis of a contract concluded between the posting undertaking and the contracting authority operating in Estonia. Under this provision, for example, skilled workers, craftsmen, and other professionals are often posted.
Example: An Estonian undertaking orders the performance of construction works in the Republic of Estonia from a Polish undertaking. In order to provide the service, the Polish company sends its employees to Estonia to fulfil the order. The Polish employer is responsible for fulfilling the order and instructing its employees, while the Estonian company as the contracting authority is responsible for fulfilling the requirements for the working environment in Estonia.
2) The undertaking shall post the employee to an establishment or undertaking belonging to the group and situated in the territory of a Member State. Under this provision, for example, sectoral managers, specialists, and skilled workers are often posted.
Example: An Estonian employee is sent from a parent company operating in Estonia to a subsidiary in Finland to perform work duties. The work of the Estonian employee is organised by the undertaking in Finland. The Finnish company is also responsible for meeting the requirements for the working environment while the Estonian employee is working in Finland.
3) A temporary employment agency shall recruit an employee to an undertaking located or operating within the territory of a Member State. This is temporary agency work, where a tripartite employment relationship arises between the temporary employer, the temporary employee, and the user undertaking. This type of posting primarily involves work in the construction, agricultural, service, or catering sectors.
Example: A Lithuanian employee, through a temporary employment agency operating in Latvia, is sent to work at a user undertaking in Norway. A service contract has been concluded between the Latvian and Norwegian companies for the placement of labour. The employment contract is concluded between the Lithuanian employee and the Latvian temporary employment agency under Norwegian law, and the tasks are performed and their performance is controlled by the Norwegian company, which is also responsible for the Lithuanian’s work environment and safety. In such situations, the Latvian as well as the Norwegian company may be the payer of wages. However, in the event of a delay in the payment of wages, the employee must turn to the employer in Latvia because, in the case of a claim for payment of wages, only the actual employer is liable before the employee and not the third party (Norwegian company) for whom the work is performed.
4) A user undertaking posts a temporary employee to an undertaking located or operating in the territory of a Member State. The employee must be posted to a branch of the user undertaking or to a company belonging to the same group to perform the contract concluded between the user undertaking and the contracting authority providing the service in Estonia, or the user undertaking itself must be, for example, a temporary employment agency. A user undertaking that posts an employee to another Member State is, in that case, required to provide advance notification to the employer regarding the posting within a reasonable period of time.
Example: A Polish temporary employment agency hires the employee to a Latvian user undertaking, which in turn posts the employee to Estonia to provide the service. The employer is responsible for the employee’s working conditions, i.e. the Polish temporary employment agency must comply with the requirements set forth in the Working Conditions of Employees Posted to Estonia Act while the employee is working in Estonia.
In all cases, an employment contract must be concluded between the employer and the employee by the time of the posting, and this employment relationship must be maintained for the duration of the posting. If, during their stay in the host country, the employee’s employment contract with the employer ends and they conclude an employment contract with an undertaking in the host country, they will no longer be a posted worker.
Remember that an employee is a posted worker if:
- The place of employment is the territory of a Member State other than that in which the employee normally works.
- The work is of a temporary nature, i.e. the employee is not permanently moving to live in another country.
- The employee has a specific host in another country, i.e. a recipient of services, a parent or subsidiary belonging to the group or, in the case of temporary agency work, a user undertaking.
There are differences in regards to the road transport sector set forth in the Working Conditions of Employees Posted to Estonia Act. Namely, subsections 2 (11) and (12) of the Working Conditions of Employees Posted to Estonia Act do not apply to the road transport sector, i.e. in the road transport sector, an employee is not posted if the user undertaking posts the temporary employee to Estonia for the performance of their duties. Clauses 5 (1) 3) and 7) of the Working Conditions of Employees Posted to Estonia Act also do not apply to road transportation workers, i.e. workers do not have to be guaranteed overtime work or the compensation of costs accompanying a business trip. In addition, subsections 5 (61–63) and § 53 (duration of the posting and the extension thereof) and subsection 8 (6) of the Working Conditions of Employees Posted to Estonia Act will not be applied in regards to the road transport sector.
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.
Temporary agency work
Temporary agency work is a tripartite employment relationship. While two parties participate in a classic employment relationship – the employee and the employer – then in the case of temporary agency work, the user undertaking also participates in the employment relationship as a third party. In the case of temporary agency work relationships, the employer, i.e. the temporary employment agency, enters into an employment contract with the temporary agency worker, on the basis of which they temporarily send the temporary agency worker to work under the direction and supervision of a third party, i.e. a user undertaking. Pursuant to subsection 6 (5) of the Employment Contracts Act, a user undertaking is a third party under whose instructions and supervision the employee temporarily works.
The temporary employment agency and the user undertaking enter into a contract under the law of obligations, which regulates cooperation between the two.
For an employee, participating in a tripartite relationship means, first and foremost, understanding who is legally responsible and for what, and which company they should turn to if problems arise. The employee cannot forget that their employer while working for the user undertaking will be a temporary employment agency, i.e. it is this company’s obligation to provide the employee with work and to pay them wages. The only thing that can be demanded from a user undertaking is a suitable working environment. If a user undertaking from a foreign state posts an employee to a company located or operating within the territory of Estonia, then the employer, i.e. the temporary employment agency, is responsible for the performance of the requirements set forth in the Working Conditions of Employees Posted to Estonia Act.