START OF THE EMPLOYMENT RELATIONSHIP 

Who can work in Croatia?

Croatian citizens and foreign nationals, observing the provisions of The Aliens Act, can work in Croatia. It is prohibited to employ a person under fifteen and a person between fifteen and eighteen years of age who is still subject to compulsory full-time elementary schooling.

What are the main sorts of labour contract that exist in Croatia?

The main distinction is between indefinite duration employment contracts and fixed-term employment contracts. Further, the provisions of the Labour Act prescribe mandatory content for the following:

1. Employment contract for permanent seasonal jobs;
2. Contract of employment at alternative workplace; and
3. Employment contracts in the case of expatriation of the worker.

What are the main features of each of them?

Indefinite duration employment contracts

An indefinite duration employment contract creates legal obligations for the contracting parties until its termination, in a manner provided for by the Labour Act. Where an employment contract does not define its duration, it shall be regarded as a contract of indefinite duration.

Fixed-term employment contracts

In exceptional cases, an employment contract may be concluded for a fixed term, for the purpose of taking up an employment where the end of the employment is determined by objective conditions such as reaching a specific date, completing a specific task or the occurrence of a specific event. The cumulative duration of all successive fixed-term employment contracts, including the first employment contract, may not exceed three consecutive years, save where it is necessary for the purpose of replacing a temporarily absent worker or where it is allowed by law on objective grounds or prescribed in a collective agreement.

Employment contract for permanent seasonal jobs

When the employer is mostly engaged in seasonal activities, a fixed-term employment contract may be concluded for permanent seasonal jobs. In addition, the contract for permanent seasonal jobs must contain additional information concerning:

• conditions and time period during which the employer shall pay contribution for extended pension insurance,

• time limit within which the employer is obliged to offer an employment contract for the next season to the worker,

• time limit within which the worker is obliged to provide his feedback concerning the offer from the employer – this time limit may not be less than eight days.

Contract of employment at an alternative workplace

For work to be performed at the worker's home or outside the employer's premises, an employment contract must contain additional information concerning:

•  working hours,

•  the required machinery, tools and equipment that the employer is obliged to provide, install and maintain;

•  the use of worker's own machinery, tools and other equipment, and reimbursement of costs related thereto;

•  reimbursement of the worker's other costs related to the performance of work; and

•  method of worker's education and training

Employment contracts in the case of expatriation of the worker

When a worker is temporarily posted abroad for an uninterrupted period exceeding thirty days, the employment contract must contain additional information concerning:

• the duration of the employment abroad;

• the organisation of working time;

• paid non-working days and holidays;

• the currency to be used for the payment of remuneration;

• other benefits in cash or kind related to the employment abroad; and

• the conditions governing the worker's repatriation

What information should employees be given in Croatia?

The employees have to be given information concerning:

• the identities of the parties and their residence and the registered seat of business;

• place of work or where there is no fixed or main place of work, a reference to the fact that the work is performed at various places;

• the title, nature or category of work that the worker is employed for or a brief specification or a description of the work;

• the date of commencement of employment;

• in the case of a fixed-term employment contract, the expected duration thereof;

• the duration of paid annual leave which the worker is entitled to or, if this cannot be indicated when the contract is concluded the procedures for allocating and determining such annual leave;

• the length of the periods of notice to be observed by the worker and the employer or, if this cannot be indicated when the contract is concluded the method for determining the periods of notice;

• the basic salary, bonuses and frequency of remuneration payment which the worker is entitled to; and

• duration of a regular working day or week.

The information referred to above may, in the employment contract, be given in the form of a reference to the laws, other regulations or administrative provisions, collective agreement or working regulations governing those particular points. 

DURING THE EMPLOYMENT RELATIONSHIP 

What are the main employment rights in Croatia?

Fundamental obligations and rights arising from the employment relationship are as follows: 

• The employer shall be obliged to ensure work for an employed worker and pay remuneration for the work performed and the worker shall be obliged to perform the work following the instructions provided by the employer in line with the nature and type of work.

• The employer shall be entitled to determine the place and the manner of performing the work and shall respect the worker's rights and dignity.

• The employer shall be obliged to ensure safe working conditions with no detrimental effects to the health of the worker in accordance with a special law and other regulations.

• The employer shall prohibit any direct or indirect discrimination in the area of labour and working conditions, including the selection criteria and requirements for employment, advancement in employment, professional guidance, education, training and retraining, in accordance with the Labour Act and special laws and regulations.

• The employer shall be obliged to protect the worker's dignity during work in the case of acts of superiors, collaborators and persons with whom the worker contacts on a regular basis while performing his tasks, which are uncalled for and contrary to the Labour Act and special legal provisions,

Furthermore, provided that the conditions proscribed by the Labour Act and special laws and regulations are met, the employee shall have the right to:

• a daily period of rest (a break) of minimum 30 minutes;

• a minimum daily rest period of 12 consecutive hours per 24-hour period;

• a weekly minimum of uninterrupted rest period of 24 hours plus the hours of daily rest;

• annual leave of at least four weeks in each calendar year;

• time off from work with remuneration (paid leave) for important personal purposes and during education, vocational or professional training;

• compensation for periods in which he does not work due to legitimate reasons established by law, regulations or administrative provisions, collective agreement, working regulations or employment contract (e.g. sick leave, pregnancy etc.);

• compensation during a period of work interruption due to the fault of the employer or due to other circumstances beyond the worker's responsibility; and

• notice period and severance pay.

In addition, the Labour Act contains specific provisions prescribing the protection of:

• pregnant workers, women who have recently given birth or are breastfeeding, parents, single parents and adoptive parents;

• workers suffering from temporary or permanent incapacity for work, especially when incapacity for work has been caused by an injury at work or an occupational disease and

• disabled workers

What are the maximum permitted daily, weekly, monthly and annual working hours?

Daily working hours- N/A; to be determined by the employer observing provisions regarding breaks, daily rest, weekly rest.

Weekly working hours- 40 hours (full time work).

Monthly working hours- N/A; to be determined by the employer observing provisions regarding breaks, daily rest, weekly rest

Annual working hours- N/A; to be determined by the employer observing provisions regarding breaks, daily rest, weekly rest and annual leave

Please note that depending on the business activities certain special provisions may apply.

Are there any minimum number of hours required?

There is no minimum number of hours; it is possible to employ an employee as a part time worker.

What is the minimum holiday entitlement?

The worker shall be entitled to an annual leave of at least four weeks in each calendar year.

Can a contract be modified while still valid and in force? If so, under which circumstances?

It is possible to amend the employment contract, providing that both the employer and the employee consent to the amendments.

The employment contract may make reference to the laws, other regulations or administrative provisions, collective agreement or working regulations governing certain particular points. When any of these regulations/agreements etc are amended, such amendments will apply to the employment contract.

Are any particular employment relationships subject to special protection?

Employment relationships subject to special protection are as follows:

• minors; 

• pregnant workers, women who have recently given birth or are breastfeeding;

• single parents and adoptive parents;

• workers suffering from temporary or permanent incapacity for work, especially when incapacity for work was caused by an injury at work or an occupational disease;

• workers working on jobs involving exposure to harmful effects which cannot be eliminated even with the implementation of health and safety at work protective measures;

• disabled workers;

• members of the works council;

• union commissioners and representatives;

• workers’ representative in an employer’s body; and

• workers over 60 years of age.

Are there any obligations to consult with a works council and/or to undertake collective bargaining?

There is an obligation to consult the works council regarding the following issues:

• the adoption of working regulations;

• the employment plan and employment development and policy, as well as dismissal;

• transfers of undertakings, businesses or parts of undertakings or businesses, as well as transfer of workers’ employment contracts to a new employer and its impact on workers affected by the transfer;

• the measures related to the protection of health and safety at work;

• the introduction of new technologies and change of organisation and method of work;

• annual leave schedules;

• working hours patterns;

• night work;

• compensations for inventions and technical innovations; and

• collective redundancies and all other decisions that, under the Labour Act or a collective agreement, must be rendered in consultation with the works council.

An employer must also obtain prior consent from the works council for the following decisions:

• dismissing a member of the works council;

• dismissing a candidate for the works council who was not elected for a period of three months following the establishment of the election results;

• dismissing a worker with reduced capacity for work due to an injury at work or occupational disease and dismissing a disabled person;

• dismissing a worker over 60 years of age;

• dismissing a workers' representative in an employer’s body;

• including persons using any type of pregnancy, motherhood or parenting related rights being included in a collective redundancy situation;

• collecting, processing, using and disclosing of the information about a worker to third parties;

• appointing a person authorised to supervise whether personal information about workers is collected, processed, used or disclosed to third parties in accordance with the provisions of the Labour Act.

The trade union and the employer do not have the obligation to undertake collective bargaining, but in cases where they do undertake collective bargaining, they have to negotiate in good faith. 

END OF THE EMPLOYMENT RELATIONSHIP 

When and how can an employer terminate an employment relationship?

An employer has several options for terminating an employment relationship, which are:

1. Regular notice of dismissal – when the employer has legitimate reasons, by giving either the statutory notice period or the notice period stated in the contract of employment, in the following cases:

• business conditioned cancellation;

• dismissal on personal grounds;

• dismissal due to the worker's misconduct; and

• dismissal due to incompetence during probationary period.

2. Extraordinary notice of termination – without observing the statutory notice period or the notice period stated in the contract (extraordinary notice of termination) where the continuation of the employment relationship is regarded as impossible due to a severe breach of obligations of the employment relationship or any other fact of critical importance, and recognising all the circumstances or interests of both contracting parties. This is limited to the period of 15 days after finding out about the grounds for termination.

3. Employment contract termination agreement- made in writing, this form of termination is based on the mutual consent of both parties where all of the terms of termination are agreed upon between the employer and employee.

When and how can an employee terminate an employment relationship?

1. Regular notice of dismissal - The employee shall be allowed to terminate the employment contract subject to either the statutory notice period or the notice stated in the contract of employment, without specifying any reasons for doing so.

2. Extraordinary notice of termination - on the same grounds as the employer.

3. Employment contract termination agreement- made in writing, this form of termination is based on the mutual consent of both parties where all of the terms of termination are agreed upon between the employer and employee.

What are the economic consequences in each case?

1. The notice period- the minimum notice period duration is determined by Art. 122 of the Labour Act and calculated in accordance with the tenure of the employee. In case of a termination due to the worker’s misconduct, the period shall be two times shorter (50%).

The employer is obliged to pay the worker’s salary during the notice period, as if he had worked during the entire notice period, regardless of whether he works or has been released from his duties. In the case of a termination of contract by the worker for serious reasons, the notice period shall be a maximum of 1 month.

2. Severance pay – When the dismissal follows a two-year tenure, and unless the reason for the dismissal is the workers misconduct, the worker is entitled to severance pay in the amount determined in accordance with the tenure. The amount determined for each year cannot be lower than one-third of the average monthly salary earned by the worker in the period of three months prior to the termination of the contract  It is also determined that it may not exceed six average monthly salaries earned by the worker in the same period.

Are there any situations in which an employment relationship would terminate automatically and without the need for action by either party? If so, what are they?

The following situations will lead to automatic termination of an employment relationship:

• upon the death of the worker;

• upon the death of employer (natural person), upon the termination of a small business by virtue of law or the deregistration of a sole trader in accordance with special legislation;

• upon the expiry of a fixed-term employment contract; and

• when the worker reaches the age of 65 and 15 years of entitlement for retirement pension, unless otherwise agreed upon between the employer and the worker.