The current Public Service Act, enacted in 2013, stipulates that there are two types of officials working in government agencies: those who are in office based on the Public Service Act, and others who work under the Employment Contracts Act.

According to the explanatory memorandum of the draft law sent for a round of feedback by the Ministry of Finance, this creates problems because officials and employees working in the same government agency are treated differently. Therefore, the ministry wants to amend the law so that the rules would be the same for everyone.

The change also affects officials' salaries. The government's action program for 2023-2027 plans to establish a minimum wage at 60 percent of the median wage by 2027 in the public sector.

Gerli Heinmaa, a senior specialist at the Ministry of Finance, told ERR that this does not mean indexing officials' salaries.

"The amendment would mean that officials' salaries would also be linked to the minimum wage set by the government, as are all other jobs, meaning the minimum wage established in the country would apply equally to both the private and public sectors. In the future, officials cannot be paid less than the minimum wage, which is currently €820 per month," she said.

The draft law also aims to standardize the payment of salaries to employees and officials of government agencies. Under the current system, an official's salary is formed solely from components stipulated by law, while the formation of a government agency employee's salary is not subject to any legal restrictions. According to the bill, an agency employee cannot receive any bonus or support not prescribed by law.

Bonuses as high as 30 percent of main salary

Under the current law, there are limits on variable pay: for the completion of additional tasks or as a bonus, up to one-fifth of the annual base salary can be paid within a year, but the draft law increases this amount to 30 percent.

"Recent years' crises have shown that government agencies need somewhat greater freedom to respond effectively and resiliently to emergencies," states the explanatory memorandum of the draft law.

Salary data for agencies will also become more public: whereas previously, officials' salary data was published every year on May 1, and obtaining employees' salary information required a formal request for information, the draft law would make all salaries public.

"The requirement for disclosure currently only applies to officials, leaving out an increasingly large workforce, so to ensure transparency, it is important to unify and make comparable the requirements for disclosure," the draft law explains.

Another change concerns the term of employment contracts for departmental or division managers within agencies. Under the current law, the state secretary, ministry permanent secretaries and undersecretaries, the head of the Government Office, head of a government agency, head of the Competition Authority and head of the Competition Authority's Insolvency Service are appointed for a fixed term of five years.

This system has justified itself according to the explanatory memorandum, and thus it will be extended to heads of structural units, primarily department heads and division managers. In the future, their employment contracts will be concluded for five years, and if they wish to continue in their position, they will need to apply through a public competition.

"The aim of the amendment is to provide heads of structural units with new development and career opportunities and to contribute to the better functioning of the rotation system," states the draft law.

Annual review obligation to be lifted

The principles for recruiting employees will also change, so that similar to officials, employees will henceforth be hired through a public competition, ensuring that the selection is fair and based on competence.

Additionally, the draft law aims to modify the requirements related to layoffs because the current notification period is different for officials and employees, which is unjustified. The legislative change links this period to the time served and layoff compensation will be paid according to the official's tenure at the agency from which they are laid off, as is currently the case for contractual employees.

Regarding performance reviews, the requirement to conduct them once a year will be abandoned and replaced with a requirement to hold personal development evaluations regularly.

The draft law stipulates a basic vacation of 35 calendar days for government agency employees. The current law provides for a 35-day vacation under favorable conditions for employees who have signed an employment contract, but not for new employees. Although the law allows for a 28-calendar day vacation to be offered to employees, in reality, the 35-day vacation was retained. Now, the draft law specifies that the basic vacation for an agency employee is 35 calendar days.

The change is justified by allowing employees to recover their work capacity during their time off and the need for a longer recovery period due to the need to compensate for officials' operational restrictions, strike bans and special duties placed on them.

In 2022, the average total salary in the public service was €2,072 per month. In state agencies, the total salary was €2,138, and in local government agencies, it was €1,821. The average salary in Estonia at the time was €1,685 per month.

28,000 people work in the public service, including about 6,000 officials in state institutions, 9,000 special service personnel and 7,000 employees. In local governments, there are 3,000 officials and 2,500 employees.

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