Employees with independent decision-making capacity

2022 - 12 - 16
Article by: Karina Paatsi, Johanna-Britt Mikk

The Employment Contracts Act in its current wording requires employees to work during the employer’s normal working hours, unless agreed otherwise. The employee’s working hours must be specified in the employment contract. However, in an increasing number of jobs, fixed hours are no longer relevant due to the nature of the job, and employees increasingly want the freedom to adjust their working hours to their needs and preferences. The new provisions on working hours, which will enter into force on 24 December 2022, are therefore highly welcome and (re)introduce the concept of an employee with independent decision-making capacity. This is an employee who, based on the nature of the work, is free to schedule their working hours, and with whom the employer can agree on different working and rest time arrangements.

An employee with independent decision-making capacity can decide, according to their needs and preferences, when and how much work they will do, including at what times and on which days of the week. Whether the employee is free to plan their own working hours must be assessed separately for each employee. For example, interpreters, accountants, lawyers and some high-level managers have such independence.

The employer can exempt such employees from the following by mutual agreement:

  • regulation of working hours;
  • procedure for compensation for working at night or on public holidays;
  • regulation of on-call hours;
  • restrictions on night work;
  • restrictions on daily and weekly rest periods; and
  • procedure for shortening working hours.

The agreement must be in writing and can only be signed with employees who have complete freedom to plan their working hours. The exemption cannot be applied to employees who can plan only a part of their working hours (e.g., if a considerable part of the tasks must be performed at certain times of the day). Despite the flexibility in scheduling working hours, an employee with independent decision-making capacity is still subject to the management and control of the employer. The parties can agree that the employee will participate in certain meetings, and they can also lay down deadlines for performing work tasks.

An employee with independent decision-making capacity must work with the agreed workload. This means that the employee’s working hours in a calendar month depend on the workload agreed in the employment contract and the number of working days in the month. Working time is calculated on a monthly basis. If the limit on monthly working hours is reached and there may be a need to work overtime, the employee must inform the employer. The parties may agree on overtime work. Also, a general working time limit applies to employees with independent decision-making capacity. As a rule, such employees must not work more than an average of 48 hours, including overtime, per any seven-day period within the monthly accounting period.

The employer must keep a record of the working time of employees with independent decision-making capacity. Therefore, the parties should agree on how the records will be kept, including how and when the employee will report their hours worked to the employer.

The agreement can only be signed with employees with independent decision-making capacity whose monthly salary in the quarter preceding the agreement was at least the national average gross monthly salary based on Statistics Estonia data (1,679 euros in the third quarter of 2022). The parties do not have to consider or monitor subsequent changes in the national average gross salary. The agreement cannot be signed with a minor – in such cases the contract is void. Also, the agreement must not harm the employee’s health and safety.

The parties may cancel the agreement at any time with a notice of 14 calendar days. Therefore, when the organisation of work needs to be changed, the employer can cancel the agreement and start applying the usual working hours to the employee.