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COVID-19 EU PolicyWatch

Database of national-level responses

Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case EE-2020-16/1122 – measures in Estonia

Postponement of collectively agreed wage increases in transport sector

Kollektiivsete töötasukokkulepete edasilükkamine transpordisektoris

Country Estonia , applies nationwide
Time period Temporary, 13 April 2020 – 01 January 2022
Type Bipartite collective agreements
Category Employment protection and retention
– Wage flexibility
Author Ingel Kadarik (Praxis Center for Policy Studies) and Eurofound
Case created 15 September 2020 (updated 17 September 2020)

Background information

Due to the COVID-19 pandemic and its containment measures, the transport sector was hit hard. Countries’ borders were closed, which strongly affected the freight transport. It also had an enormous impact on tourism resulting in almost zero income for passenger transport companies. In Estonia, one of the largest passenger transport company is Tallink Group that operates in passenger water transport sector in Estonia, Finland, Sweden and Latvia. Tallink as well as freight road transport companies made use of the wage subsidy provided by the Estonian Unemployment Insurance Fund, but as the measure was temporary and the difficulties in the sector remain, additional auxiliary measures were needed to keep the business running and retain employment.

To keep the businesses afloat and retain employment, changes to collective agreements in the transport sector were made. There are two sector-level collective agreements concluded in the road transport sector – one for passenger transport and the other for freight transport, and there are several collective agreements concluded in water transport between Tallink Group and its subsidiaries and seamen's union.

Content of measure

In road transport sector, regarding passenger transport, on 13 January 2020, a new collective agreement for 2020-2023 was signed, which should have increased the wage of bus drivers as of April 2020. As a result of the COVID-19 crisis, it was agreed in April that the wage increase would be postponed until June 2020. Regarding freight transport, a collective agreement was signed in 2019 for 2019-2022, according to which the wage of truck drivers should have increased in May 2020. It was agreed, however, that the wage increase would be postponed by a year.

In passenger water transport, similar measures were used in Tallink Group by its subsidiaries. In case of service personnel the wage increase was postponed to 2022, but in case of technical personnel the postponement agreement was not reached. Additional changes included different aspects of different agreements. For example, it was agreed that shortening the work days length, changing the calculation periods for banked working time, paying hourly wage instead of daily wages, guaranteeing a gross monthly wage, and making sure the work time is divided as equally as possible.

However, additional negotiations are on their way, as the condition for freezing the wage increase was that there would be no redundancies, and if redundancies would take place, the consent to postpone the wage agreement will become null and void. Tallink has now announced the dismissals of more than 1,000 employees, which is enormous number in Estonian context.

Use of measure

The collective agreements of Tallink Group and its subsidiaries cover more than 1,000 employees. In road transport sector, the numbe rof employees was around 22,000 in 2019.

Contents

  • Employment retention
  • Pay freezes or cuts

Target groups

Workers Businesses Citizens
Employees in standard employment
Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
Social partners jointly
Trade unions
Company / Companies
No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Negotiated Negotiated
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • Social partners jointly
  • Main level of involvement: Sectoral or branch level

Involvement

Social partners were directly involved in the re-negotiation of the already signed collective agreement.

Views and reactions

No reactions available.

Sectors and occupations

    • Economic area Sector (NACE level 2)
      H - Transportation And Storage H49 Land transport and transport via pipelines
      H50 Water transport

This case is not occupation-specific.

Sources

  • 24 April 2020: Sõitjateveo üldtöökokkulepe (uus.etta.ee)
  • 04 August 2020: Kollektiivlepingu ajutine muutmine Hansaliini töötajatele (emsa.ee)
  • 05 September 2020: Meremeeste ametiühing: uue kokkuleppeta ei saa tuhandet töötajat koondada (majandus24.postimees.ee)
  • 14 September 2020: Viking XPRS kollektiivleping on ajutiselt muudetud (emsa.ee)

Citation

Eurofound (2020), Postponement of collectively agreed wage increases in transport sector, case EE-2020-16/1122 (measures in Estonia), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.