Labour Rights in Croatia

At closer inspection, the legal protection of rights of workers in Croatia seems greatly satisfactory, even in comparison to European Union standards. Law on Labour prohibits all forms of discrimination of those working or seeking employment � from discrimination based on race and colour of skin, obligations in the family, age, sexual or even sexual orientation-based discrimination.

The Law on Labour in particular prevents all forms of unequal treatment of pregnant women, such as refusal to employ them, firing, even seeking information on a woman�s pregnancy. Also, the Law prescribes, in no uncertain terms, equal remuneration for women and man for the same type of work.

The time-limited employment contracts, which brings the workers into a less favourable position, is considered an exception by the Law, so that making of such contracts is restricted, both in terms of purpose and in terms of time limits (no such contract shall be made for a period longer than three years). Also, an employer is obligated to inform an employee working under such a contract about other jobs that he or she may be working on full-time.

Full employment is restricted to 40-hour week. Overtime is also treated as an exception and should not exceed 10 hours per week, at proper remuneration, with the additional obligation for the employer to inform the Inspectorate of Labour if overtime work takes place for more than four weeks in sequence.

Provisions related to termination of employment contract for business-related reasons (which is the most commonly occurring cause of firing) also contain a number of restrictions for the employer � from the obligation to prove to the worker that he can�t offer another position or re-training, to the obligation to take into consideration the employee�s age and a prohibition to employ another person to the same position for a period of six months. Also, a worker can�t be fired for reasons of being absent from the job due to health reasons, maternity leave or litigation against the employer.

The termination deadlines expand with the time spent by an employee working for a given employer, to the maximum four months for workers older than 55 years of age that have worked for the same employer for over 20 years. If, due to business reasons, a greater number of workers is laid-off (more than 20), the employer is obligated to prepare a programme to take care for the redundant workers and explain his decision to the competent employment office in writing.

The workers can freely, without prior approval by anybody or anyone, form trade unions, on basis of voluntary membership. Employers and their associations are prohibited to exert any form of control over the trade union, provide finances or support for trade unions, and any discrimination of workers because of their membership in a trade union is also prohibited. The trade unions, under the conditions prescribed by Law and Collective Bargain Agreements, can call for a strike. The right to strike is restricted only for members of Police and armed forces, due to the nature of their job.

The State Inspectorate of Labour is charged with supervision of labour law provisions.

However, as in many other areas of public policy, there is great discrepancy between legal protection and the situation in the field, i.e. real levels of protection and observance of legislation. According to trade unions, many employers successfully employ workers illegally (evading taxes and social allowances), and the workers are often registered at the minimum wages (in 2006, the gross-minimum wage was 2,170, or 294.57 EUR), while the rest is paid in cash.

According to the survey conducted by the European Foundation for Improvement of Living and Working Conditions (www.eurofound.europa.eu) on working conditions in Europe, Croatia is ranked in the upper half of countries with 18 percent of workers working in excess of 48 hours per week, while 11 percent works on all days of the week. At that, more than half of the workers don�t receive overtime pay. Finally, many companies delay the payment of salaries for several months. All these violations are accompanied by slow and ineffective judiciary in cases of labour disputes and litigation.

Obviously, rigorous legal measures that are not easily satisfied, combined with a state too weak to enforce that they are fully enforce, produce the totally opposite effect planned by the legislator: the grey economy expands and almost no rules exist there.

Looking at the status of women on labour market, also addressed in the Lao on Labour, it is visible that it remains significantly less favourable than the status of men. Also, due to information available to Independent Croatian Trade Unions (NHS), women receive, on average, between 10 and 20 percent smaller salaries, and their share in total figures of unemployed is 61%. This, of course, is not due solely to violation of the Law, but also to the deeply rooted division of �male� and �female� roles in the society. Here, too, in spite of all measures and actions, the will of the legislators didn�t turn into reality.

At this moment, there are about 400 trade unions and seven umbrella unions in Croatia, with a total membership of 450,000 (approximately 35% of the total number of employees � primarily in the public sector and big companies). However, there is the significant fact that the number was almost double ten years ago (according to HNS). Majority of trade unions is independent of the political parties and government, but the disunity, occasional conflicts and competition of umbrella unions and their leaders greatly bring into doubt (more or less justified) the validity of positions that they advocate and represent.

The main activities of the trade unions, naturally, include collective bargaining and collective agreements with employers on company level, and with employers� associations at the level of sectors and economy in general. Collective agreements cover issues related to labour relations and employees� rights and are binding only to the members of the organizations (employers and employees) that signed it. However, if competent Government Minister estimates that public interest involved, the validity of the collective agreement can be expanded to cover persons that are not signatories. The most important such agreement is the agreement on the minimum wages that was expanded to cover all employers and employees in the country. However, as is the case of trade union membership, most collective agreements cover only employees in the public sector and big companies.

To better understand the relations and the dynamic of negotiations between trade unions and employers, but also the state as the third party, the term social partnership is of extreme importance for Croatia (as is for the greater part of continental Europe). Social partnership includes formal and informal cooperation and harmonization of opposed interests of the three sides in the field of regulation of labour relations and labour market.

The most important manifestation of such cooperation on national level is the Economic-Social Council (ESC). This is a tri-partite advisory body to the Government, established through an agreement of the three social partners in 1994. ESC includes a number of thematic commissions (on labour and social policies, on wages and taxes policies, on collective bargaining, etc.) made of experts in their respective areas, and representatives of social partners. The tasks of ESC include the monitoring of economic and social policies, providing opinions on draft-laws in the field of labour, collective bargain agreements and their implementations, as well as definition of a list of mediators and arbitrators on collective labour disputes.

In the current ESC, the state is represented by representatives of the Government and Ministry of Economy, Labour and Entrepreneurship. Employers are represented by the Croatian Association of Employers, and trade unions are represented by six central organizations that meet the requirements (at least 15,000 members, at least five national trade unions as members, active in at least 11 counties, and participation in no less than three national collective bargain agreements). Economic-Social Councils are established, along similar lines, in all counties in Croatia.

Although union representatives often claim that social partnership exists more on declarative level than in reality, and although this model of formalized influence on public policies can be labelled as corporatist (en.wikipedia.org/wiki/Corporatism) rather than democratic, it seems that, for the time being, social partnership has no real alternative.

In Croatia today, there is a rising number of problems faced by the workers for which the existing system of labour rights protection can�t respond, regardless of how efficient it may seem to be. One such problem is related to small private enterprises where many measures of protection of employment safety are impossible to implement. Workers in such companies and enterprises remain, usually, out of the trade unions (both because of inability to organize and because of employers� pressure), and their rights remain outside the coverage of collective bargain agreements. According to NHS, there are about one million such workers in Croatia today.

The next problem, on which the classical workers� protection is largely powerless, is related to the gradual change of labour market. The change is visible primarily in the expansion of atypical forms of employment such as service contracts, part-time contracts, work for several employers, seasonal employment, etc. The employees with such contracts also remain outside of the trade unions and the system covered by collective bargain agreements. In many cases, it leads to a situation in which the employees are fully exposed to the arbitrary will of employers (for instance, there is the practice to extend part-time and service contracts by simple changes in the name of the position).

The spreading of atypical employment, however, in spite of its defects, shows that, in conditions of open economy such as Croatian, the maintenance of competitiveness of companies needs a more flexible workforce. The concept of a labour market with workers working in one position for life, using a single skill in a hierarchically set huge company is increasingly less sustainable. The flexibility, on the other hand, doesn�t imply only greater freedom for employers in terms of their power over the employees, but could mean greater freedom for workers in terms of organization of their work and work time. In that sense, the trade unions and the state shouldn�t really fight to preserve the concept of labour prevalent 20 or 30 years ago, but find the ways to preserve workers� rights in the changed circumstances.

The third and probably biggest problem of the workforce is unemployment. The unemployment rate in Croatia lingers around 17 percent, and employed amount to 54.9% of the total population (HNS data). That situation that threatens to undermine the whole social welfare system and send in plunging down can�t be solved with measures for protection of workers� rights. In fact, many people believe that the very solution is opposed to high levels of protection for employees. Namely, the higher the legal limitations on employers and the higher the protection of employed workers (from losing a job and low wages), the higher are costs of employment for employers, and demand for labour smaller. Reductions of workers� rights can�t be used as solution for the problem of unemployment, but there is a definite need to set the targets of employability and adaptability of workers to the labour market above and ahead of the aim to keep a worker in a single job.