Fixed-term employment contracts in Estonia

When may a fixed-term contract be concluded?

The law starts from an open-ended contract (TLS § 9 lg 1) [1]. A fixed-term contract needs a good reason arising from the temporary, time-limited nature of the work; the law gives a temporary increase in workload and seasonal work as examples (TLS § 9 lg 1) [1]. To replace a temporarily absent employee, a contract may be concluded for the time of the replacement (TLS § 9 lg 2) [1].

If concluding the fixed-term contract was contrary to the law or a collective agreement, the contract is deemed open-ended from the start (TLS § 80 lg 2) [4].

How many times may it be extended?

A chain of fixed-term contracts has a limit. If a fixed-term contract for similar work has been concluded consecutively more than twice or extended more than once within five years, the employment is deemed open-ended from the start (TLS § 10 lg 1) [2]. Contracts count as consecutive if no more than two months pass between the end of one and the conclusion of the next (TLS § 10 lg 1) [2].

When a fixed-term contract is extended or a new one is concluded consecutively for similar work, no new probationary period applies (TLS § 10¹ lg 5) [5]. For a fixed-term contract of up to eight months, the probationary period may not exceed half of the contract's duration (TLS § 10¹ lg 3) [5].

How does a fixed-term contract end?

A fixed-term employment contract expires when its term ends (TLS § 80 lg 1) [4]. If the employee keeps working after the term ends, the contract is deemed open-ended, unless the employer expressed a different intention within five working days of learning, or when it should have learned, that the employee continues working (TLS § 80 lg 3) [4].

The parties may also end a fixed-term contract by agreement at any time (TLS § 79) [6]. During the probationary period, the employer and the employee may terminate both a fixed-term and an open-ended contract (TLS § 86 lg 1) [7].

What the law says

• „Eeldatakse, et tööleping sõlmitakse tähtajatult.“ [1] (translation: an employment contract is presumed to be entered into for an unspecified term; TLS § 9 lg 1).
• „Tähtajaline tööleping lõpeb tähtaja möödumisel.“ [4] (translation: a fixed-term employment contract expires when its term ends; TLS § 80 lg 1).
• „Töötaja ei või tähtajalist töölepingut korraliselt üles öelda, välja arvatud töötaja asendamise ajaks sõlmitud töölepingut.“ [3] (translation: an employee may not give ordinary notice of a fixed-term employment contract, except one concluded for the time of replacing an employee; TLS § 85 lg 2).
• „Tööandja ei või töölepingut korraliselt üles öelda.“ [3] (translation: the employer may not give ordinary notice of an employment contract; TLS § 85 lg 5).

Can the contract be ended early?

Neither party may end a fixed-term contract by ordinary notice, without a special reason: the employee may not (except a replacement contract), and the employer may not give ordinary notice at all (TLS § 85 lg 2 ja 5) [3].

Extraordinary termination is possible for good reason.

• The employee may terminate extraordinarily if, considering all circumstances, continuing the contract cannot reasonably be demanded – for example, if the employer has significantly delayed paying wages (TLS § 91 lg 1 ja lg 2 p 2) [8].
• The employer may terminate extraordinarily for economic reasons, for example a decrease in the volume of work (redundancy) (TLS § 89 lg 1) [9]. If the employer terminates a fixed-term contract for an economic reason, it pays compensation equal to the wages the employee would have been entitled to until the end of the term; this does not apply in bankruptcy (TLS § 89 lg 2 p 2) [9] or force majeure (TLS § 100 lg 3) [10].

What to do

1. Check whether there is a good reason for the fixed term arising from the temporary nature of the work – a fixed-term contract contrary to the law is deemed open-ended from the start (TLS § 9 lg 1; TLS § 80 lg 2) [1] [4].
2. Count your earlier fixed-term contracts for similar work and their extensions: a third consecutive contract or a second extension within five years makes the employment open-ended (TLS § 10 lg 1) [2].
3. If you keep working after the term ends and the employer does not object within five working days, the contract is open-ended (TLS § 80 lg 3) [4].
4. If the employer terminates a fixed-term contract for an economic reason, claim compensation equal to the wages until the end of the term (TLS § 100 lg 3) [10].
5. If you want to leave early yourself, agree on ending the contract with the employer (TLS § 79) [6] or use extraordinary termination if there is a good reason (TLS § 91 lg 1) [8].

Frequently asked questions

Can an employer always offer only a fixed-term contract?

No. A contract is presumed to be open-ended, and a fixed-term contract is allowed only for a good reason arising from the temporary nature of the work (TLS § 9 lg 1) [1]; a fixed-term contract contrary to the law is deemed open-ended from the start (TLS § 80 lg 2) [4].

How long may a fixed-term contract last?

Up to five years (TLS § 9 lg 1) [1]. A replacement contract may last for the time of the replacement (TLS § 9 lg 2) [1].

Can a new probationary period be set for a new fixed-term contract?

No new probationary period applies when the contract is extended or a new one is concluded consecutively for similar work (TLS § 10¹ lg 5) [5].

Can I end a fixed-term contract myself by giving notice?

Not by ordinary notice – an employee may not give ordinary notice of a fixed-term contract, except a replacement contract (TLS § 85 lg 2) [3]. You can end it by agreement (TLS § 79) [6] or terminate extraordinarily for a good reason (TLS § 91 lg 1) [8].