Thursday, January 10, 2008

You're fired

There's a lot of ink being spent in Estonia on a new employment law that was announced yesterday. I haven't read many specifics about the law, mainly because most of the press is going towards the battle between Reform and the Sotsid who dislike the bill. I gather that the bill makes firing employees easier which is upsetting a lot of people, if anyone has more details on the actual bill I'd love to hear them.

What did strike me as interesting in this bill is that it provides every employee with 15 days a year for an "educational vacation". I think this a great idea, it's a way to ensure that your population continues to upgrade their skills and gives employees a chance to break from the everyday work life and learn something new and interesting. I expect we'll see a proliferation of schools and companies offering 2 week courses in all sorts of topics if this bill passes.

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Blogger acks said...

Well it was actually quite a good bill, but it looks like it will never go any further because of the public opinion, that is quite disinformed by the labor unions and Sotsid.

The most important change in the law - currently if the company fails and he needs to cut labor costs and get rid of part of the personnel, one must inform 2-4 months ahead and then pay 2-4 months salary. This actually means that today, when Estonia is facing the lack of staff rather than unemployment and one can easily find a new job, the "bonus" will just be the source of having a good vacation or buying some stuff. Which is very dishonest to the company that is already in the bad state.

The new bill limited the notice period and bonus payment to 1/2 - 1 month. The same time there are unemployment compensation mechanisms already in place - employer and employee pay every month less than 1% of the salary to a unemployment fund and in case you have no job and you meet the certain requirements (basically you ARE looking for a job, you will attend the free courses by goverment etc), you get at least 50% of the salary you had.

So the switch would be - you are easly fired in case the company fails, you will not get the high compensations as default, but only if you need (during the period you can't find the job you are qualified). Therefore the companies would hire employees more easily, because nowadays every hire is well calculate and is done only when it is clear that you can really afford him no matter what. And this would help to grow the amount of innovative and brain-needed companies.

But it is probably not going to happen. Damn populists...

3:27 PM  

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