ZAGREB, July 24, 2019 - The newly appointed Minister of Labour and Pension System, Josip Aladrović, on Wednesday announced that he would officially invite unions to sit down together and continue social dialogue regarding common topics, including the "67 is too much" referendum related to the pension reform.

At the moment that invitation is very inclusive and refers to everyone, and it will be officially made very soon, once we determine what topics we wish to discuss with them, Aladrović told reporters ahead of an inner cabinet meeting.

I am certain that unions and employers will respond and we certainly have something to talk about, he said.

In reference to reporters' comments that the unions are not that eager regarding negotiations and whether he had anything to offer that would appease them, Aladrović said that that was a matter of social dialogue.

"I believe that that is all a matter of dialogue and that when we sit down at the table, we will see what we can talk about, what needs to be agreed, what the common topics are and what social partners want to discuss," he underscored.

Asked whether he would appeal to unions to give up the referendum, Aladrović said that all topics related to social dialogue referring to labour and the pension system "are desirable topics to be put on the table with social partners."

He did not agree with reporters that his hands were tied thanks to what his predecessor Marko Pavić had done.

"Signatures were collected and they are going to the Public Administration Ministry and those who will decide whether the referendum will be held, how many signatures are required and how many were collected. I think that our hands are not tied and that we are open to social dialogue. The unions are rejecting dialogue but I will use one more opportunity to invite them and I think that with communication and dialogue we can resolve problems," Aladrović said.

He did not wish to prejudge what would happen if the unions do not agree to a dialogue.

He did not agree with the president of the Independent Croatian Trade Unions, Krešimir Sever, that he will not have the political weight to oblige other ministers to participate in the work of the Economic-Social Council (GSV).

"I have already talked with the ministers. We are very inclined toward the GSV and I am certain that I will have the weight to invite other ministers and that they will respond," he said.

He assessed that the measure to employ pensioners has shown exceptionally good results and added that since 1 January more than 13,000 pensioners have been employed, mostly in retail, manufacturing as well as in some professional, scientific and education categories.

More news about labour issues can be found in the Politics section.

ZAGREB, July 18, 2019 - Ivan Malenica who has been nominated to replace Lovro Kuščević at the helm of the pulic administration ministry, on Thursday said that he would continue implementing projects of the digitisation of public administration and merger of state administration offices with county governments.

Ahead of meeting with Prime Minister Andrej Plenković, Malenica told the press that his predecessor Kuščević had managed to complete some activities and that he will continue the job until the end of this term.

"I think that it will be possible to finish all that in the next year, so that we demystify public administration in Croatia and restore citizens' trust," Malenica said.

Asked whether he would scale down the powers of the Conflict of Interest Commission, Malenica said that he will see. "There is bill on the matter and we will see what they refer to."

He underscores that he has a vision of what public administration should look like and that it is meant to be at the service of citizens who can be satisfied with civil servants, with their efficiency and performance.

Commenting on the Constitutional Court decision that the rights of the ethnic Serb minority in Vukovar should be improved, he said that that is a Constitutional Court decision and as such it needs to be respected. He announced that he would discuss that matter with the Vukovar authorities.

Malenica said that he accepted the ministerial position because it was challenge in his career and that he can also do something for Croatia in the area of public administration. He dealt with this area of work during his work as a researcher and believes that that can be applied to public administration.

"I will see just how different practical work is compared to research when I step into office but I think that there should not be any problems," said Malenica.

The candidate for the new State Assets Minister, Mario Banožić, said on Thursday that the state should keep control over the companies that make it competitive.

I cannot now say whether the state should have five or six strategic companies and whether others should be on the market. I have to get an insight, however, I believe that the state should have control over those companies that make the state competitive, Banožić told reporters while coming to Government House for talks with Prime Minister Andrej Plenković who yesterday nominated him for the new state assets minister after Goran Marić resigned this past Monday over media reports on his involvement in murky real estate deals.

Banožić praised Marić for having made a great step forward in state property management, notably in cases where ownership was unclear and in the registration of state assets.

Addressing the press ahead of a meeting in Government House with Prime Minister Andrej Plenković, Labour and Pension System Minister nominee, Josip Aladrović, on Thursday said that he would invite social partners, unions and employers, to a social dialogue and to revive the Economic-Social Council (GSV).

"I would like to first mention that we will call social partners to a dialogue and to resume activities within the GSV," Aladrović said, adding that he considers that most of the matters tended to in the department of labour and pension system under outgoing minister Marko Pavić were handled well.

Aladrović did not wish to comment on the union initiative to call a referendum against the proposed pension reform after the unions collected more than 700,000 signatures.

"Considering the number of signatures and all the work done prior to that, I would say that that was the democratic will of the people. In future we will attempt to anticipate and launch social dialogue," he said.

He believes that it is necessary to allow the government and the public administration ministry to do their job and to see if there is a sufficient number of votes for a referendum and the Constitutional Court needs to determine whether the referendum question is in accordance with the Constitution.

"I would not like to interpret something that the Constitutional Court will interpret considering that we achieved what we wanted with the pension reform and that is long term sustainability of the pension system and adequate pensions."

Aladrović also said that the Conflict of Interest Commission had launched proceedings against him due to a "minor oversight" and that he will accept any decision the commission makes. He apparently did not enter a car he possesses into his declaration of assets.

He said that he joined the HDZ when he was 16 or 17 and thanked Prime MInister Plenković for showing his confidence and giving him the honour to be a minister.

"I am certain that I will justify that trust and that I will do my job responsibly and that the results of the Ministry of Labour and Pension System will be visible in a very short time," he said.

More politics news can be found in the dedicated section.

ZAGREB, June 19, 2019 - Croatian Labour and Pension System Minister Marko Pavić said on Tuesday that the government would on Wednesday allow the issuance of 2,000 more work permits for foreign workers in the tourist industry plus an additional 1,000 work permits for foreigners in the construction sector.

Pavić said in an interview with the RTL commercial broadcaster that as soon as recently employers urged the government to allow the employment of 5,000 more foreign workers, the government responded that they should exhaust the hiring possibilities in the country.

In this context, Pavić mentioned that out of 1,600 local job seekers registered by the Croatian Employment Service as available for seasonal employment, about 600 of them have been hired in the recent days.

He went on to say that the government had conducted an analysis which showed that three quarters of employers who hired foreign workers, had not at all advertised vacancies on the Croatian market.

Therefore, the authorities are considering an option whereby employers will be required to seek labour force first in Croatia before resorting to foreign labour force.

The purpose of such measure is to make it impossible for the reduction of salaries, according to Pavić.

In late December 2018 the government decided that 65,100 permits could be issued to foreign workers in 2019, including 15,000 permits that have already been extended. The highest number of the work permits referred to construction, tourism and transport.

Under that decision, the quota for 2019 included 20,331 more work permits than in 2018 and nearly 13,000 referred to tourism and construction.

The minister ruled out his resignation which has been demanded by unions that collected signatures for the restoration of statutory pension age from 67 to 65.

More news about employment issues can be found in the Business section.

ZAGREB, June 18, 2019 - The Croatian Chamber of Commerce (HGK) on Tuesday organised a conference called "Can Croatia make it without foreign workers?" which heard that Croatia needs a no-quota model for the import of labour, that 500,000 left the country over the past decade and that the able-bodied population will drop by one million by 2051.

According to projections, the number of able-bodied persons will drop from 2.8 million today to 1.8 million in 30 years or so and today it is clear that demographic changes will restrict GDP growth, said Anđelko Akrap, a professor at the Zagreb School of Economics.

We need decentralisation and a long-term strategy of the country's development focusing on a population policy, he said, adding that countries with insufficient fertility rates for a natural population renewal were not well-organised.

HGK president Luka Burilović said Croatia lost about 500,000 able-bodied persons over the past dozen years because of emigration and population ageing.

"That's why today we have a current chronic labour shortage which should be dealt with at once as it will be the main brake to our development. The new law on foreigners will abolish quotas and allow companies to hire as many workers as they need," he said.

Burilović said Croatia must not allow bureaucratic sluggishness to hinder economic growth as it was already lagging behind the competition.

"This year Croatia's GDP growth will reach the pre-crisis year 2008, while comparable countries went ahead by almost 30%. The most worrying fact is that the number of persons employed, despite solid growth, was still 100,000 lower than in 2008, which is the most important indicator of a country's economic success and the basis for estimating the viability of social security, social progress and prosperity," he said.

The state secretary at the Interior Ministry, Žarko Katić, said the current quota model would be replaced with a no-quota system in order to enable employers to get permits to import workers within five days.

He added that in the first five months of the year, the Interior Ministry issued over 40,000 work permits for citizens of 55 countries.

Ruža Hrga of the Croatian Employment Service said the number of the jobless dropped by 65% since 2013, adding that 140,000 jobs were created over the past five years and that the registered employment rate had gone up 10%.

More news about employment in Croatia can be found in the Business section.

ZAGREB, June 14,2019 - The government is ready to consider an additional increase in the number of work permits for foreigners, however only when all possibilities for hiring local workers are exhausted, Prime Minister Andrej Plenković said on Friday.

When we establish beyond doubt that all possibilities for the employment of our citizens have been exhausted, then we will be ready to consider expanding the quota for foreign workers, Plenković said in Zadar.

In that context he admitted that it was evident that increased quotas were necessary, particularly in Croatia's coastal region in the tourism, hospitality and construction sectors.

Promising that a decision to that effect could be expected, Plenković explained that increases like that must be well-analysed.

He also commented that in some sectors vacancies are advertised and there have been no applications submitted although there are a lot of people at the same time registered as unemployed with the Croatian Employment Agency (HZZ).

The premier added that he would like to see that as many local jobless people as possible find employment and make use of this favourable period on the labour market.

In late December 2019 the Plenković cabinet government decided that 65,100 permits could be issued to foreign workers in 2019, including 15,000 permits that have already been extended.

The highest number of the work permits refer to construction, tourism and transport.

The quota for 2019 includes 20,331 more work permits than in 2018 and nearly 13,000 referred to tourism and construction.

However, earlier on Friday the Croatian Employers' Association and the Croatian Tourism Association asked the government to urgently adopt a decision to raise the quota for foreign workers, saying the tourist season was at risk due to a labour shortage.

In a joint statement, they said the opening of some restaurants and bars before the peak tourist season was at stake. "There are no local employees and the quotas for foreign workers have been filled, which requires an urgent response by the Labour Ministry and the government."

The two associations accused the minister in charge and the government of having turned a deaf ear to weeks-long appeals to help the tourism sector. The associations recalled that last autumn they warned that the import of foreign labour was a short-term solution to the labour shortage and that it was necessary to reduce administrative obstacles.

The Labour Minister on Friday called on employers to contact the HZZ that could connect them with job-seekers and help them find the necessary labour force.

When all the possibilities on the local market are exhausted, requests for a higher number of work permits for foreigners will be considered, the ministry said.

More employment news can be found in the Business section.

ZAGREB, May 23, 2019 - Three trade union federations on Thursday called for the replacement of Labour Minister Marko Pavić, citing the minister's campaign against their referendum campaign aimed at restoring the retirement age to 65 and the lack of transparency, and announced that they were leaving the Economic and Social Council (GSV) because the government favoured employers and the unions could not participate in social dialogue on an equal footing to the government and employers.

In a letter to Prime Minister Andrej Plenković, the unions accused Pavić of "deluding the people and misusing budget funds in the campaign against the union initiative '67 is too much', for which around 700,000 signatures were collected to change retirement terms."

The leaders of the three trade union federations said they were leaving the GSV because the tripartite social partnership had been replaced by "direct collaboration between the government and employers."

"The government has an interlocutor in the Croatian Employers Association (HUP) and is using us only as a fig leaf," NHS trade union federation leader Krešimir Sever told a news conference.

As an example, he cited announcements that quotas for the import of foreign workers would be abolished and the law on aliens amended so that employers could import cheap foreign labour without any restriction and lower the price of labour. All of this is being done without the unions as a social partner, he said.

The head of the MHS trade union federation, Vilim Ribić, said that there would be no tripartite social dialogue if Plenković did not replace Pavić. "If Croatia wants to have social dialogue, Plenković should replace Pavić and examine the work of a number of other ministers as well," SSSH trade union federation leader Mladen Novosel said in an allusion to Public Administration Minister Lovro Kuščević, who has been working on a new referendum law without union representatives.

The three union leaders said that there were also "the French and the Greek model" of social dialogue, with protests and strikes, if rules of equal participation in social dialogue were not respected.

They said that such a scenario was possible if the government tried to ignore the will of citizens who have signed their petition that calls for changing retirement terms.

"There can be no negotiations on pension laws, citizens have the right to a referendum, otherwise there will be protests and strikes, and anything is possible... we believe people will know how to win their rights," said Novosel.

The national coordinator of the "67 is too much" referendum campaign, Mirela Bojić, said that the exact number of signatures collected in the referendum campaign would be known in about ten days, when the unions would submit the signature lists to the parliament with a request to call a referendum to restore the statutory retirement age to 65.

More news about trade unions can be found in the Business section.

ZAGREB, May 8, 2019 - Labour Minister Marko Pavić said on Wednesday that he would not step down despite the unions' demand to that effect, accusing the unions of conspiring with the opposition ahead of European elections in order to weaken the government's influence.

The leaders of three trade union federations on Tuesday demanded Pavić's resignation, saying that the minister had deceived the public about the amount of taxpayers' money spent on a campaign against the unions' referendum initiative "67 is too much".

The three unions - SSSH, NHS and MHS - are collecting signatures until May 11 for their petition for a referendum against raising the statutory retirement age to 67.

"I will not resign, the unions are quite nervous but the government knows what it is doing, it is informing citizens responsibly," Pavić said in an interview with Croatian Radio.

He said that in the course of the day his ministry would forward to the Constitutional Court a report on the financing of videos on the comprehensive pension reform, adding that it was evident from Constitutional Court President Miroslav Šeparović's statements that it was legitimate for the government to conduct an informative campaign simultaneously with the union-led signature-collection drive so that it could warn citizens of the consequences of union proposals.

The minister added that there was no other way for the ministry to finance the informative campaign but with public money.

Pavić also accused the unions of having conspired with the opposition ahead of EU elections. "We have been saying that the statutory retirement age of 67 was not introduced by the current government but by the SDP government. That's why I'm surprised at the opposition's support for the union initiative. I understand the unions' nervousness as their having become a participant in EU elections. I believe that people understand that the union initiative is politically motivated... and that the unions are not credible. This is not about the pension reform, this is an attempt to weaken the government's influence ahead of EU elections," Pavić said.

More news about the referendum campaign can be found in the Politics section.

ZAGREB, May 2, 2019 - The GONG nongovernmental election monitoring organisation on Thursday called on the government to inform the public of the cost of its advertising campaign against trade unions' initiative to collect signatures for a referendum petition against raising the state pension age.

The government is intimidating the general public with its estimates that the demands of the union campaign "67 is too much" will cost 45 billion kuna of budget money yet is using public money non-transparently in its counter-campaign, GONG says.

GONG welcomes the government's having imposed stricter transparency rules on all referendum campaigns, including the union campaign, but considers it problematic that the government has not made public the cost of its counter-campaign.

GONG insists that the issue of financing referendums should be regulated as part of a new law on referendums and recalls that Public Administration Minister Lovro Kuščević has set up a task force to draw up the new law, which has not held any meeting yet.

Labour and Pension System Minister Marko Pavić on Thursday dismissed accusations that his ministry's media campaign, which has coincided with an ongoing union campaign for a referendum against the statutory retirement age of 67, is directed against the referendum initiative, saying that the ministry campaign is part of continuous efforts to inform citizens.

"This is not an anti-referendum campaign; it is an ongoing campaign designed to inform citizens about the comprehensive pension reform. We did not use external agencies for the campaign, we paid 18,000 kuna plus VAT for the video and we will publish the cost of the campaign after it is completed," Pavić told a news conference.

As for a calculation showing that a possible success of the union referendum campaign would cost the budget 45 billion kuna, Pavić said the calculation had been made by a team of experts. Even though it may seem high, it is realistic given the large number of pensioners, he said.

Pavić went on to say that trade unions and opposition parties used events commemorating International Workers' Day on Wednesday to manipulate citizens. He also dismissed media claims that the rate of youth employment in Croatia had dropped and that the government's active employment policy measures were not yielding results.

In the first two years of its term, the government invested 4.5 billion kuna in employment measures, and from March 2016 to March 2019, 96,058 jobs were created, he said, adding that in 2018, 38,287 more jobs had been created than the year before.

"The youth employment rate for the 15-29 age group has grown by 2.6%. According to the Croatian Pension Insurance Institute, the number of employed young persons has grown from 261,000 to 267,500, and the rate of employed persons, depending on the statistics, has increased between 2.45% and 2.6%," said Pavić.

More news about the referendum campaign can be found in the Politics section.

ZAGREB, May 1, 2019 - Prime Minister Andrej Plenković on Tuesday extended his best wishes to all citizens for International Workers' Day, observed on May 1, saying that his government was trying to improve living standards by implementing its programme based on economic growth, job creation, demographic revival and social solidarity.

He said that International Workers' Day was an occasion to raise awareness of the importance of improving workers' status and working conditions, as well as the value of work and jobs in evolving global and market circumstances brought about by the 4th industrial revolution.

The prime minister noted that his government was making sure that low-income and vulnerable citizens had a decent life. "We have decided to increase the minimum wage to 3,000 kuna (400 euro) net and to increase pensions by 7.54 percent, while the lowest pension will go up by an additional 3.13 percent as of July 1," he said, recalling government investment in employment, in particular in the employment of young people, middle-aged women, long-term unemployed and persons with disabilities.

"For that purpose, we have invested 4.5 billion kuna (608 million euro) in the last two and a half years while in office, which has led to an increase in employment and a decrease in unemployment," Plenković said.

"Remaining open to dialogue with the trade unions, employers and workers, the government continues to build a modern society and an economy resistant to financial challenges and ready for reform to improve the standard of living for all people in Croatia," the PM concluded in his message.

Parliament Speaker Gordan Jandroković on Tuesday issued his message, underscoring the need for Croatian society to persevere in empowering workers' rights and improving living and working conditions.

Jandroković noted that on International Workers' Day we recall the events of 1886 when workers in Chicago staged protests calling for the recognition of their fundamental rights and dignity and paved the way for more just and humane working conditions.

"Recalling the many years of workers' struggle, today, in an age of new challenges, global market and technological progress, in Croatian society we have to persevere in further empowering workers' rights and ensuring good working and living conditions for all employees," Jandroković said in his message.

In addition to fighting for competitiveness, we also need to continue building a society based on fair and socially-sensitive labour relations in which each individual will have an equal opportunity for a dignified life from their decent and dedicated work or from their pensions, Jandroković said.

More labour news can be found in the Business section.

ZAGREB, April 29, 2019 - Labour and Pension System Minister said on Sunday that launching a petition for a referendum against the statutory pension age of 67 is a democratic right supported by the government, however, this statutory retirement age has been existing in Croatia for five and a half years and was introduced by the government led by the Social Democratic Party (SDP).

"Then (when it was introduced) there were no protests or referendums, and earlier today, we could see the SDP leader Davor Bernardić sign this referendum petition, although he had voted for raising the pension age to 67," the minister told the RTL commercial broadcaster.

"He (Bernardić) recently apologised for that policy (of his party). I believe that it may happen that he will apologise for the entire term of the Milanovic government," said Pavić, referring to the SDP government led by the then SDP leader Zoran Milanović whom Bernardić succeeded at the SDP helm.

"The policy of this government is to invest maximum effort to make pensions higher. We have raised them by 7.45%, and as of 1 July, the lowest pension allowances are going up by 3.13%, we have reinforced the second pillar and settled many issues and preserved the stability of the public finances," the minister said.

Those who have been longer employed have the average pension of 4,500 kuna and we have set the target to enable people to stay longer on the labour market, and they can go into retirement at the age of 60 if they have 41 years of service, Pavić said.

He recalled that in Croatia the average length of the years of service before retirement is 30 years and 2 months as against the average of 35 years in Europe and 37 years in Germany.

Pavić said that credit rating agencies and the European Commission have praised the government's pension reform as good, and reiterated that a success of the unions' referendum against the reform would mean lower pensions and more borrowing.

The Moody's credit rating agency, which on Friday changed Croatia's outlook positive and affirmed its ratings at Ba2, says that "in the medium-term, the pension reform enacted in late 2018 will contribute to the fiscal sustainability of the system while ensuring better pension adequacy."

"The acceleration in the planned increase in the statutory retirement age to 67, coupled with the equalization of retirement age for men and women, will support the decrease in public pension expenditure expected by the European Commission's 2018 Ageing report (-3.8% of GDP in 2070 compared to 2016). The supplement granted to multi-pillar pensioners will help to improve the low pension adequacy," Moody's says.

Three union federations – NHS, SSSH and MHS – early on Saturday morning started collecting signatures for a referendum on changes to the Pension Insurance Act. The union federations want the government to restore the retirement age to 65, to set the age for early retirement at 60, and to reduce penalties for early retirement from 0.3% to 0.2% per month of early retirement, as well as to extend the transitional period for equalising the statutory retirement age for women and men.

More news about the pension system can be found in the Business section.