In Estonia, school principals' contracts were fixed-term until 2008. To reduce their dependency on local authorities, the contracts were changed to indefinite terms. Now, the Ministry of Education and Research assesses that indefinite contracts have led to inconsistent management quality across schools.

The legislative intent notice states, "The purposeful professional development of principals is highly inconsistent, and some school operators do not systematically assess the competencies and performance of principals. As a result, the quality of school management is uneven nationwide, leading to disparities in educational quality between schools."

The document further explains, "Inconsistent management quality affects student outcomes in various ways: students and teachers may not receive necessary support, the proportion of unqualified teachers increases, differences in educational outcomes between schools persist and satisfaction among students and teachers varies. Often, schools with students from weaker socioeconomic backgrounds require principals with stronger professional competencies."

As a solution, the Ministry of Education and Research proposes five-year contracts for principals. The selection process would involve a competitive recruitment where a representative from the Estonian Association of School Principals would be included. The committee would evaluate candidates' management competencies based on a competency model and present three candidates to the school operator, from whom the principal would be chosen.

Furthermore, an annual development review would be mandatory, and in the fifth year of the contract, a certification process conducted by the Estonian Association of School Principals would take place.

The ministry believes that implementing fixed-term contracts would enhance the quality of school management, improve the reputation of the principal's role, increase the attractiveness of teaching positions and raise educational standards. They plan to measure outcomes by evaluating student satisfaction, teacher job security, work satisfaction and perceptions of management quality. Additionally, they will assess whether the number of principals implementing measures to support new teaching practices has increased and whether the competition for principal positions has grown.

The ministry acknowledges that fixed-term contracts might be disadvantageous for principals, reducing their job security and the role's attractiveness. However, they argue that this uncertainty, along with increased mobility, could enhance principals' motivation, dedication and effectiveness.

"A fixed-term employment relationship, combined with development reviews and a certification system, creates a pool of individuals with strong management skills. The economic insecurity associated with fixed-term contracts is mitigated by the fact that these individuals can also find opportunities in other organizations as top specialists or leaders," the authors of the legislative intent noted.

The Ministry of Education and Research aims to finalize the draft by the end of the year. The government could approve it early next year, and the Riigikogu could adopt it by summer. Under an optimistic timeline, the new principal contracts could take effect starting from the summer of 2026.

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