May the 5th, 2023 - The Croatian Employers' Association's Igor Skrgatic has stated that a new Labour Law which would allow for greater flexibility is now more necessary than before.

As Poslovni Dnevnik/Josipa Ban writes, Croatia is a country lacking in people, warned Igor Skrgatic, the president of the Croatian Employers' Association's Association of Small and Medium Enterprises, at a working lunch with Minister of Labor Marin Piletic.

Igor Skrgatic stated that this problem, which has numerous consequences, the most important of which is the lack of manpower, should be properly addressed and work needs to be done properly and diligently on policies that will lead to a functional solution. Therefore, the Croatian Government must think and act in the direction of keeping those who have decided to remain in Croatia, as well as work harder on encouraging the return of those who have left.

Is an immigration strategy coming?

Irena Weber, the chief director of the Croatian Employers' Association (HUP), told Minister Piletic that the government must raise its general level of awareness of the importance of entrepreneurship because they are the ones who create jobs, fill the state budget and create much needed added value.

The best way to retain workers is by increasing their wages, and for higher wages, Weber repeated, tax relief is needed. As is already more than well known, this will be implemented next year, and while HUP welcomes it, they are also looking for a change in other policies.

In his part of the presentation at a recently held HUP gathering, where this year the topic was the labour market, the Labour Minister was supposed to give an overview of the policies implemented by the state to improve the unenviable position in which entrepreneurs currently find themselves. From everything that the minister said during the 20-minute speech, it turns out that the ruling party doesn't actually have many concrete policies in this regard, apart from active employment policy measures.

For example, a large influx of foreign labour requires certain properly laid out immigration policies, and Croatia does not yet have such a thing. Piletic announced that the first immigration strategy, which the Ministry of Internal Affairs (MUP) is in charge of, will be adopted by the end of the year.

In the meantime, 124,000 foreign (non-EU) workers arrived in Croatia last year alone (we know this because that's how many work permits were issued), and this number is expected to reach 200,000 this year. In addition, there are more and more people arriving from more ''exotic'' countries among the foreign workers currently arriving, warned Igor Skrgatic, such as Nepalese, Pakistanis, Indians, Uzbeks... all of whom need to be properly integrated into society, and Croatia simply isn't ready for that process.

In addition, as Igor Skrgatic stated, employers would also like the new Labour Law to be looked into and amended. "Here in Croatia, there is a lot of unused man power, and according to statistics, this country is the record holder for having an inactive population. The lack of interest in taking up gainful work is part of the Croatian mentality and a consequence of rentierism, and on the other hand, a consequence of demographic trends and the general state of the labour market. In order to change that, we need to change the Labour Law and enable greater flexibility for both employers and workers,'' believes Igor Skrgatic, adding that the amendments to the Labour Law that came into force at the beginning of this year very much failed to meet employers' expectations.

Piletic stated that the plan and agreement is to start creating a new Labour Law, but that it isn't a realistic idea at least for the next year.

"Since the changes came into force at the beginning of the year and the drafting of by-laws and ordinances necessary for the implementation of a new Labour Law are yet to follow, it isn't realistic to start drafting a new law until we pass all of that,'' said Piletic.

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October the 2nd, 2022 - Croatian fixed-term employment is set to be limited to a maximum of three years, and in addition to minor modifications that were incorporated into the initial proposal for amendments to the Labour Law after public consultation, a series of new legal solutions will soon be presented to parliamentarians.

As Poslovni Dnevnik/Jadranka Dozan writes, last week, the government adopted a proposal for legal amendments that should enter into force at the beginning of next year, with the exception of provisions related to work via digital platforms as one of the new forms of work, for which the start of application is scheduled for 2024. Considering the widespread practice of Croatian fixed-term employment, one of the most important changes since January refers to that specifically.

In order to prevent the unjustified consecutive conclusion of Croatian fixed-term contracts, a limit wil be introduced for them so that they can do on for a maximum of three years, that is, a maximum of three consecutive contracts concluded with the same employer, pointed out the minister in charge, Marin Piletic. Amendments to the law also stipulate the obligation to contract the salary in the gross amount and pay it into the employee's transaction account.

Changes are also set to follow in the regulation of additional work for another employer, without the consent of the 'parent employer' and with a greater number of permitted hours of such work. At the same time, a new way of performing permanent seasonal jobs is being introduced, which includes work for an indefinite period of time and the possibility of legal work outside of the main season.

Among other things, Piletic apostrophised the fact that working at a separate place of work, i.e. working from home and/or working remotely, is being regulated more properly. Along those same lines, certain categories of employees, primarily parents of children up to eight years of age, will receive additional protection in terms of unequal working hours and overtime.

Starting next year, employees will have the right to five days of unpaid leave a year to provide personal care for a family or household member, and they will be able to miss one day from work for urgent family reasons. Among other things, the proposed changes foresee the absence of the right to a notice period and severance pay for workers who exercise the right to an old-age pension with the purpose of encouraging employers to keep older workers on in their places of employment, explained the minister.

Finally, from next year on, union members who signed a collective agreement will be able to negotiate certain more favourable material rights for themselves compared to non-union members. It's also worth mentioning that during the public consultation on the proposal for amendments to the Labour Law, as many as 774 comments were received, along with general remarks that the timing of the e-consultation - in the middle of the summer holiday season - was highly inappropriate.

The largest number of remarks and comments related to Croatian fixed-term contracts, permanent employment, additional work and work that is performed at a designated place, ie from home or remotely, especially related to compensation of workers' expenses.

Although in general most of the comments were either not accepted or only noted, some suggestions were indeed readily accepted.

As such, in connection with the issue of Croatian fixed-term contracts, the proposed provisions have been amended in the section that refers to the definition of objective reasons and the prescription of exceptions, so that they are linked only to the longest period, and not to the number of contracts concluded with the same employer, and at the same time, exceptions related the work of foreign citizens were also removed.

And although employers welcomed some changes in the Labour Law, HUP (Croatian Employers' Association) has already called on the Government and the competent ministry to start the drafting process instead of "attempting to solve matters by intervention to the detriment of those whom the law should protect" of a completely new, modern Labour Law.

However, the changes to the Labour Law, as well as those of the Law on Prevention of Undeclared Work, are related, among other things, to the deadlines for the execution of certain goals set by the National Recovery and Resilience plan, so a completely new Labour Law is clearly not an option for the Croatian Government at this moment in time.

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