New HZZO Regulation: Employers Can Request Sick Leave Control Based on Evidence or Justified Doubts

The media reported that the Croatian Health Insurance Institute managed to reduce the sick leave rate by 10.7 percent in 2023, which, considering that more than 200 million euros are spent annually on sick leave from the health budget, is a substantial saving. It was further reported that during the controls conducted by HZZO inspectors in 2023, the records of nearly 30,000 insured persons were reviewed, every third sick leave was terminated, and 1,820 warnings, fines, and other measures were issued to doctors who unjustifiably kept their patients on sick leave.

Ultimately, due to serious violations of contractual obligations, proceedings were initiated against two doctors for the termination of contracts with HZZO. Unjustified sick leaves of employees often cause the inability of employers to operate normally, and replacing an employee on sick leave is often not economically viable, nor is it possible to quickly find a suitable replacement for an employee who is on sick leave due to the state of the labor market. It is common that even companies owned by cities cannot fulfill their obligations due to a large number of employees on sick leave, and this is not an exception in state bodies either.

Possibilities of Control

Given the significant number of unjustified sick leaves, employers often doubt the legitimacy of employees’ absences, which leads to a deterioration of the relationship between employees and employers. Although an employee is referred to sick leave by an authorized doctor whose credibility should not be questioned, practice has shown otherwise. Often, employers are not even aware that they have the option to initiate a procedure to determine the legitimacy of sick leave, and the minority of employers who are aware of this simply do not have the time to deal with matters unrelated to their business.

Therefore, on July 30, 2024, the HZZO Management Board adopted a new Regulation on the Supervision and Control of the Croatian Health Insurance Institute, which regulates the manner of conducting supervision and control carried out by HZZO. This supervision includes the contractual entities of the Institute, the contributors, and the insured persons, and the control is conducted as regular and extraordinary control. The extraordinary control is conducted outside the annual plan and program of work of the organizational units of the Institute’s Directorate and its regional units, at the request of the complainants who have knowledge of the actions of the Institute’s contractual entities contrary to contractual obligations and for other justified reasons.

Employer’s Powers

To avoid the arbitrary submission of requests for the control of employees’ temporary incapacity, the Regulation stipulates that the employer of the insured person can only in particularly justified cases, when they have knowledge or justified doubts about the abuse of the insured person’s temporary incapacity, which arises from the employer’s claims and possibly attached evidence, request the Institute to control the legitimacy of the insured person’s temporary incapacity during the duration of that incapacity.

If such a request is found justified, the Institute’s inspectors are authorized, among other things, to conduct an examination of the insured person in a healthcare institution or the office of a private practitioner, in the appropriate premises of the Institute or the insured person’s home. If it is determined that the insured person’s temporary incapacity is no longer medically justified, HZZO determines the cessation of the insured person’s temporary incapacity, about which, after the control is conducted when a direct examination is not performed or after the control and examination of the insured person or family member, an expert-medical assessment is immediately made, which also determines the date of cessation of the insured person’s temporary incapacity. The earliest date that authorized persons for the control of the insured person’s temporary incapacity can determine as the date of cessation of the insured person’s temporary incapacity is the day of the control conducted, regardless of whether the next day for the insured person is a working or non-working day.

Reason for Termination?

If it is determined that the sick leave was unjustified, the employer could reduce the employee’s salary for the time of absence from work, give them a warning before termination, but the question is whether the employer could terminate the employment contract due to ‘abuse of temporary incapacity’. This depends on numerous circumstances, primarily the behavior of the employee during the sick leave, the duration of such behavior, the type of job the employee performs, and whether the employee’s actions have disrupted the relationship between the employee and the employer.

However, if HZZO, after conducting extraordinary supervision, determines that the sick leave was unfounded, this should certainly represent a reason for termination of the employment contract. Care should be taken to avoid ‘procedural’ errors during termination, and the termination procedure should be conducted correctly and without delay. In this case, the employer’s right to claim damages from the employee, and even from the competent doctor who approved the sick leave, would not be excluded if it were determined that they knew or should have known that the reasons for the sick leave were not met, and the employer suffered certain damages.