ZAGREB, 9 April 2022 - Croatian construction companies are accumulating losses because of the continued rise in input costs and are wondering whether the situation will escalate to such an extent that they will no longer be able to operate.

For the post-earthquake reconstruction of buildings alone, construction companies need about 20,000 more workers, who are nowhere in sight now.

Hina asked construction companies and institutions how they saw the present situation in their sector, how they were coping with increased prices of material and fuel, whether they would be able to deliver on the contracts signed without incurring losses, and how many workers they were short of.

The Kamgrad company said that construction businesses were piling up losses by the day as prices of material, fuel and energy had risen by more than 50% compared to prices at the bidding stage.

"Unless the present situation changes and the government promptly takes specific economic measures to help construction companies overcome these unusual disruptions to the market and maintain the stability of their operation, it is only a matter of time before the situation will escalate to such an extent that construction companies will no longer be able to meet their obligations," Kamgrad's management said.

That would result in a total collapse of the already decimated construction sector and suspension of the majority of current projects, they added.

Considering the ongoing projects and planned investments announced by both private and public contractors, construction companies should have more than enough work in the coming years. However, it is questionable whether these projects will be carried out given that the latest estimates show that Croatia lacks more than 10,000 construction workers.

"About 30,000 foreign construction workers are currently employed in Croatia, alongside 70,000 domestic workers. In addition to workers from Bosnia and Herzegovina, who are traditionally present on the Croatian construction market and whose number is unfortunately decreasing, there are more and more workers from Albania, Kosovo, Nepal, India, the Philippines and other remote countries," Kamgrad said.

Mirela Gudan of the Croatian Employers' Association said that the construction sector had been left without a significant contingent of domestic workers following the 2008 crisis because they emigrated to more developed European countries.

Gudan noted that in recent years foreign labour had been coming from remote countries, and that the cost of hiring a foreign worker was double the cost of hiring a domestic worker. She said that the present laws were damaging to the construction sector and state budget because they prevented the sector's development, which was also important for the reconstruction of building damaged in the 2020 earthquakes.

Mirjana Čagalj, Vice-President of the Croatian Chamber of Commerce for Construction and Transport, said that Croatian construction companies currently had about 100,000 workers, which was not enough.

She said there had been a shortage of skilled labour for several years now, ever since the sector had started to see growth, and the COVID-19 pandemic had only made labour imports more difficult and expensive. Croatian companies dealt with this problem by importing workers from non-EU countries.

"The scale of the problem can be seen in the fact that around 28,000 construction workers were imported in 2020, which is over 80 per cent of the foreign labour quota. Over 23,000 were imported in 2019, and in 2018 the quota was fulfilled," said Čagalj.

It is estimated that further demand for construction labour will grow in light of the post-earthquake reconstruction of Zagreb and the Banovina region.

"According to our estimates, we will need 20,000 workers for all the areas affected by the earthquakes, depending on the pace of reconstruction. The shortage of labour will partly be offset by an increased price of labour in the construction sector, which may attract new people and create conditions for the return of our workers who left for the West in search of work and better living conditions. Since the reconstruction process will take years, we expect a certain number of people will return. At the same time, we need to work on creating as many skilled workers in our schools as possible," Čagalj said.

Last year, 10,553 building permits were issued, which is 12.2 per cent more than in 2020. The expected value of works for which the permits were issued is HRK 32 billion, up from 28 billion in 2020.

For more, check out our business section.

ZAGREB, 29 March 2022 - Some of the trade unions operating within the Zagreb Holding multi-utility conglomerate held a protest rally on Tuesday, demanding the resignation of the management and suspension of the process of identifying redundant labour.

Several hundred protesters, including employees and union leaders, gathered outside the Holding's headquarters, waving union flags and holding banners saying "Down with the ZG Holding management" and "Stop this farce".

The protesters demanded that the workers declared redundant should not be laid off before a reorganisation plan and a new job classification plan were adopted.

The protesting unions had been involved in social dialogue with the management on identifying redundant labour. Unhappy with the process, seven unions from the SSSH union federation withdrew from the negotiations in early February, while the leaders of so-called in-house unions continued negotiating.

The in-house unions and the management agreed a list of 447 staff to be included in a redundancy programme. 

Baldo Kovačević, the leader of one of the protesting unions, said that the whole process had been poorly led because the management negotiated with the "illegitimate body", a negotiating committee comprising seven representatives of the in-house unions and only two from the SSSH. He said the whole situation was bizarre because the same people who for years had been involved in hiring were now deciding on layoffs.

Commenting on the protest, Mayor Tomislav Tomašević said that the social dialogue was constructive and that a majority of the unions were continuing the dialogue while only a minority was protesting.

He said that the original list of 544 redundant staff had been reduced to 447, denying the claims that it included cleaning and security staff.

Tomašević said that identifying redundant labour was part of the process in which the Holding, after operating at a loss for two years, should be put back on its feet so that it could settle its debts next year.

ZAGREB, 1 Feb 2022 - The unemployment rate in the European Union as well as in the euro area fell in December and in Croatia it decreased to seven percent from 7.1% in November and 8.66% in December 2020, according to figures published by Eurostat, the statistical office of the European Union, on Tuesday.

"In December 2021, the euro area seasonally-adjusted unemployment rate was 7.0%, down from 7.1% in November 2021 and from 8.2% in December 2020. The EU unemployment rate was 6.4% in December 2021, down from 6.5% in November 2021 and from 7.5% in December 2020."

Eurostat estimates that "13.612 million men and women in the EU, of whom 11.481 million in the euro area, were unemployed in December 2021. Compared with November 2021, the number of persons unemployed decreased by 210 000 in the EU and by 185 000 in the euro area. Compared with December 2020, unemployment decreased by 2.196 million in the EU and by 1.828 million in the euro area."

Only Spain and Greece with double-digit jobless rates

Of the 27 member states, only Spain and Greece had double-digit unemployment rates: 13% and 12.7% respectively at the end of December.

The lowest rate was in Czechia, 2.1%, followed by Poland, 2.9%, and Germany, 3.2%.

In Croatia, there were 124,000 people out if work at the end of December, or 3,000 fewer compared to November 2021, and 31,000 fewer than in December 2020.

ZAGREB, 29 Jan 2022 - An estimated 52,000 employed Croatians receive the minimum wage, and roughly 20,000 of them are workers in the wood-processing, leather, and textile industry.

In terms of the minimum wage for January 2022, Croatia ranked 21st, with €624, on the list of the 27 EU member-states. The other four countries at the bottom of the ranking were Hungary (€542), Romania (€515), Latvia (€500) and Bulgaria (€332), Večernji List (VL) reported on Saturday.

In 2022, the minimum wage was raised from HRK 3,400 to the net monthly amount of HRK 3,750 and the gross amount of 4,700, the daily newspaper recalled. In late October 2021, the parliament amended the Minimum Wage Act by majority vote whereby the gross minimum wage was raised to HRK 4,687  from HRK 4,250. As of this year, employers will have to contract the minimum wage with employees in the gross amount.

The daily newspaper says that in December 2021, one in ten employees got the take-home pay in the amount of HRK 3,915, or his or her gross wage was below HRK 4,772.  Slightly over 1.57 million people in Croatia were in employment in December 2021, according to the data provided by the national statistical office, which means that 3.3% of them were on the minimum wage (HRK 3,750)

In December, the average take-home wage was HRK 7,333 (€978), and in 2022, this monthly average is expected to finally exceed 1,000 euros. 

In 2022, the minimum wage will for the first time exceed 50% of the average wage, while five years ago it was equivalent to a mere 38% of the average monthly salary.

(€1= HRK 7.5)

For more, check out our dedicated business section.

ZAGREB, 30 Aug 2021 - The SSSH union federation warned on Monday that the analysis by the European Trade Union Confederation (ETUC) has indicated that Croatia workers, similar to those in Germany, benefit from collective bargaining most when it comes to annual leave.

"The ETUC analysis shows that Croatian and German workers benefit the most from collective bargaining when it comes to the length of annual leave, or the number of additional days of paid leave. In working units where national and branch collective agreements are applied, Croatian and German workers have an average of ten days more annual leave than the legal minimum," the union said in a press release.

The union underlined that workers covered by a collective agreement on average have 24.5 days of annual leave compared to  21.5 days for workers without collective agreements.

Collective agreements only applied in public sector, construction and partially in tourism

SSSH leader Mladen Novosel said the ETUC analysis only covered some sectors such as the public sector, and construction and partially tourism in the private sector.

The unions are intensively working on reviving collective bargaining in other sectors and expect the government to recognise the benefits of collective bargaining for society. 

The ETUC and SSSH called on national governments and EU institutions to ensure all workers benefit from collective bargaining and warned that the number of workers covered by collective bargaining has been falling since 2000.

"The European Parliament will mull over a draft directive this autumn related to the minimum wage which foresees that all member states where workers' coverage with collective bargaining is less than 70%, should prepare a national action plan to help achieve that level of coverage," the press release said.

Deputy ETUC secretary-general Esther Lynch underscores that the EU has to be more resolute and efficient so that all workers can exercise the right of collective bargaining.

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