HUP: Proposals for Amendments to the Labor Law are Based on Incorrect Data and Discrimination

The long-awaited new Labor Law, on which social partners have been working for almost two years, will not see the light of day anytime soon. The Ministry of Labor, Pension System, and Social Policy has decided to amend the existing Labor Law instead of introducing a new one, bringing forth a Draft proposal which, according to Damir Zorić, director of the Croatian Employers’ Association (HUP), will ultimately not satisfy either employers or unions.

The Croatian Employers’ Association organized a gathering with journalists on Thursday, where they highlighted key shortcomings in the Ministry’s proposals, as well as how the entire negotiation process has unfolded. As explained by Nenad Seifert, head of the HUP negotiating team in the Working Group, Croatia, as part of the National Recovery and Resilience Plan (NPOO), has committed to implementing certain European directives into labor legislation by the end of the year, otherwise risking a loss of 795 million euros.

Thus, the Draft is primarily focused on what Europe expects from us, rather than on those items that would long-term address challenges such as the mismatch between the labor market and the education system or the regulation of new forms of work in the market. However, even those few items that we must include in the NPOO are, in many respects, illogical according to HUP’s arguments.

Namely, the European Union is ‘pressuring’ Croatia to extend the working life of employees. A few years ago, a referendum successfully overturned a proposal to extend the working age to 67 years, but the Ministry of Labor has managed to avoid such future conflicts in the new proposal by completely removing age and years of service as conditions for retirement. According to their proposal, the age of 65 and 15 years of service are completely eliminated, meaning that when you sign an employment contract, you can retire whenever you want, but that does not mean you will meet the conditions for retirement according to the Pension Insurance Act. Therefore, as stated in HUP, the Ministry’s proposal is completely inconsistent with the pension system.

– When we asked the Ministry representative for the argument for changing the existing article of the Law which stipulates that the employer and employee can continue their employment relationship if they mutually agree, we were told that few workers retire with fulfilled conditions, so those conditions will be abolished – says Seifert.

With this proposal, the Ministry made a half-attempt to extend the working life, in order to satisfy European bureaucracy, without considering how this proposal could be implemented in practice. However, the Ministry requested some proposal from HUP, so HUP suggested that the new minimum conditions for retirement should be 66 years of age and 16 years of service, one year more than previously, although they claim that the existing conditions were satisfactory.

Another stumbling block is fixed-term contracts, which we decided to reduce in relation to the European average. Zorić states that completely inaccurate facts are communicated in public, that there are even 25 percent of contracts between employers and employees on fixed terms in the market, while Eurostat data from last year shows that such contracts account for 11.8 percent, in line with the European average.

– This incorrect statistic serves well in the public space as one of the main arguments for why people are emigrating from Croatia. Research shows that the main reasons for emigration are primarily a lack of perspective and the absence of changes in the state and society. The inability to secure permanent employment, i.e., fixed-term contracts and occasional jobs (which unions cite as the main reason) ranks only 15th among all reasons for emigration. Fixed-term employment contracts are a necessity for certain sectors, such as tourism and agriculture, and the specificities of these sectors must be taken into account – emphasized Zorić, taking doctors and engineers as examples who did not have fixed-term contracts but still emigrated from the country.

The next item is remote work, the most popular stumbling block during the pandemic. HUP believes that such employment relationships should be further regulated by introducing a new institute into the Law – the institute of remote work, which would remain a labor-legal relationship in its nature.

The worker would, even when working remotely, work according to the instructions and orders of the employer, use the employer’s work tools, and remain within the framework of labor law. However, when it comes to occupational safety and cost reimbursement, HUP proposes the introduction of standards of reasonableness/measures and reasonable risk, which would be the risk of health injury at work that is customary for the type of work the employee performs, and not, for example, if the employee is injured on a mountain they chose as their new work environment.

Regarding cost reimbursement, HUP proposes the possibility of paying a flat amount for cost reimbursement, and the right to reimbursement would not include transportation and hot meal costs.

The next proposal from the Ministry that ‘irritates’ HUP is additional rights for union members, meaning that only workers who are members of a union would have the right to Christmas bonuses, severance pay, and other benefits.

– The Ministry clearly did not take into account the fact that this violates the Anti-Discrimination Act and that employers, according to judicial practice, cannot treat workers differently – emphasized Seifert.

And the last point we must fulfill to receive money through the NPOO is the regulation of so-called platform work (work via digital platforms), which most countries in Europe currently do not have, but we voluntarily applied to be an experiment that has not even been discussed in the Working Group negotiations yet.

– After a year and a half of negotiations, we have not made much progress. We have wasted time and money, and it seems that all of it has been thrown to the wind – said Zorić.

He also added that HUP has nothing against Croatia fulfilling its obligations to the European Union, but that it should fully accept European legal acquis, and not a little European, a little Balkan, which are rigid and dormant.

– Our desire is to dynamize the labor market in such a way that we create a new Labor Law that will encompass new work models that exist in Europe and regulate the relationships between employers and employees, and thereby the Croatian economy and society – concluded Zorić.

It would be good to have more time so that unions, employers, and government representatives could more seriously and thoroughly address one of the most important laws of Croatian society; however, according to announcements, the Amendments to the Labor Law should enter parliamentary procedure on June 15, and before that, they must be in public consultation for another 30 days.

A new meeting of social partners is scheduled for  Monday, and in the meantime, we have a new Minister of Labor Marin Piletić, who must read all previous documents. As a cherry on top, there is also an announcement from the SSSH union representatives who, on Sunday, May 1, as part of the May Day parade, announce a protest in front of HUP (which mostly represents the private sector), which will certainly not help further negotiations.