Is the indefinite contract a thing of the past?

The regulation of fixed-term contracts in the new Labor Law has raised a lot of dust lately since the reasons for concluding fixed-term contracts are no longer specified, meaning that such a contract, according to some interpretations, could be extended indefinitely.

While the ground for negotiations between the state and unions is still being prepared, we asked labor market experts what the purpose of such business practices is and whether the indefinite contract is a thing of the past.

– The purpose of a fixed-term contract was to complete a job that has a beginning and an end within a certain time period. The fact that this form of work has turned into a kind of probation period is due to the labor market and slow administration because it is easiest for employers to hire and fire this way. An indefinite contract can also specify a probation period during which the contract can be terminated, but in that case, the employer must provide some explanation that the employee can appeal – and then we come to the effectiveness of our judiciary where disputes last for years and are expensive. Employers want to avoid this and conclude fixed-term contracts where everything ends with the expiration of the contract. – says Saša Jurković from the Posao.hr portal.

He believes that a fixed-term contract does not protect the worker because the worker in that case has no right to severance pay, is easier to dismiss, and is prevented from obtaining loans and similar.

– Employers practice this method of employment precisely because of the flexibility regarding employee turnover, but they also believe that workers are more efficient because they are motivated by the desire to extend their contracts – emphasizes Jurković.

Jurković does not believe that the indefinite contract will disappear, as there are a large number of jobs that require such contracts.

– Employers need to be facilitated in managing the number of people in companies, but for that, our state must have a much more efficient administration. Employee registrations and deregistrations, court disputes… everything must be significantly faster and then the system will function better.
Regarding the facilitation of terminating indefinite contracts, I believe we do not need to fear mass layoffs, as most companies will never dismiss good workers unless they really have to. By making it easier to dismiss ineffective workers, positions will open up for others who may perform the job better or more motivated. That is what I see under the concept of flexibilization. – concluded Jurković.