Labor law

A pay raise for employees returning from childcare leave?

Kristel Tiits Kristel Tiits

Last year, a little less than 14,000 children were born in Estonia. Their mothers and in some cases, fathers, were sidelined from work for a while to take on the duties of childcare. When it is time for the parent to return to work after childcare leave, they are entitled under the Employment Contracts Act to improved work conditions, including a pay raise, if conditions and salary level have improved for other employees in the meantime.

Considering that Estonia’s salaries have grown quickly in recent years in the public sector as well as at many private companies, does the employer really have to ensure that employees returning from childcare leave get an automatic pay raise? There is no single answer, and so the employer should consider several aspects, above all the principle of equal treatment.

Is the returning employee on par with others?

In many fields, it may be difficult to compare the content of the work and qualifications of a returning employee who has been on childcare leave for a year or two against employees who have received a pay raise in the interim.

Let us look at examples of two different fields: food services (a cook) and law (a lawyer).

The employee returning from childcare leave is a cook at a café. The employee has the skills necessary for the work and these will not fade over time. In the meantime, the menu has changed and the cook quickly learns to prepare the new items and the employer provides the necessary professional training. Thus, generally speaking, the cook’s skills are at the same level as those of co-workers upon returning from leave and a pay raise is justified: the employer can ensure improved work conditions, including the raise.

As another example, let us look at a lawyer working at a law office. Not having worked in the legal profession for several years, the lawyer’s knowledge has become outdated and may not be up to par with colleagues. But considering the principle of equal treatment, the employee returning from childcare leave must be ensured improved work conditions, including a raise in pay, if all other employees have had their earnings go up while the lawyer was on childcare leave. By law, an employer has the obligation to provide training to employees so that the employee’s knowledge meets the level required at the employer. Thus, this cannot be used to justify not giving the employee a raise, and if salaries increased across the board at the workplace, the employee must receive equal treatment.

Did everyone get a raise, or only the best employees?

Thus, if a general pay raise has taken place at the company, and it did not depend specifically on the employees’ job performance, the employee returning from childcare leave must also receive the same raise on the same grounds as the other employees – among other things, the compensation must be improved by the employer as soon as the employee resumes work after returning from leave.

Pursuant to subsection 18 (5) of the Employment Contracts Act, upon termination of pregnancy and maternity leave, a woman has the right to use the improved working conditions which she would have been entitled to during her absence.

If an employer treats an employee returning from childcare leave differently and does not apply improved work conditions in their regard, this constitutes discrimination against the employee due to their parental status and family duties and this is not permissible.

The situation is slightly different if some employees have received raises based on their contribution to work and no general raise has taken place. Then the employer does not incur such an obligation to other employees, including the one returning from childcare leave, and is not required to give them a pay raise.

Yet it is important to draw attention to the fact that in the event of a dispute, the employer must be able to demonstrate that the raise was due to the contribution made by a specific employee and that the other employees’ salaries remain on the same level.

The employer must train the employee

Employers may justify not raising the pay of employees returning from childcare leave or reducing their pay in connection with the fact that the employee’s job skills have declined or changes have occurred in the interim in the organisation of work. But such explanations do not vindicate the employer because they still have the duty to train the employee where necessary. If work conditions have improved for other co-workers (including better pay) in the interim, the employee who was at home for childcare reasons must also be provided better conditions upon their return to work. The same principle applies to employees returning from compulsory military service.

In addition, there have been situations where employers wish to establish a probationary period for employees returning from leave in order to test their knowledge and personality traits. This is however most definitely not in line with the spirit of the law, because the employment relationship was never discontinued during childcare leave. The fact that the employee was raising a child or several at home does not mean that they are no longer qualified for the job when they return to work. If major changes have taken place at the company, the employer has the duty to provide training to the employee who was on childcare leave just as the other employees were trained.

To sum up, being a parent and fulfilling parental duties cannot be a pretext for a pay cut or unequal treatment when it comes to salary level or even the application of a new probationary period. An employer who does unilaterally establish such conditions may be guilty of discrimination.