On 12 January 2005 the Estonian Parliament (Riigikogu) adopted the Act on Involving Employees in Activities of Community-scale Undertakings, Community-scale Groups of Undertakings and European Companies. The act sets foth an obligation for Community-scale undertakings to establish a European Works Council or a procedure for informing employees. The act also sets forth an obligation for European companies to involve employees via election of representative bodies or introducing an involvement procedure. The establishment of European Works Councils is aimed at improving the system of transnational representation of employees, providing better information to employees and enhancing their participation in resolving matters pertaining to work. This regulation is new to the Estonian legal regime. In reality it only concerns very large undertakings located in at least two different Member States. There are very few undertakings of this kind in Estonia. According to the act, the Labour Inspectorate shall exercise state supervision over compliance with the requirements provided by the act. This act harmonised Estonian law with the rules of Council Directive 94/45/EC on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees and Council Directive 2001/86/EC supplementing the Statute for a European company with regard to the involvement of employees. The act entered into force on 11 February 2005.
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