Croatia: New provisions in the case of employer insolvency adopted

The Amendment to the 2008 Act on Guarantees of Rights of Employees in cases of insolvency of the employer was adopted in July 2015 (Odluku o proglašenju Zakona o izmjenama i dopunama zakona o osiguranju potraživanja radnika u slučaju stečaja poslodavca, OG 82/15). Apart from guaranteeing the rights of employees in the case of employer insolvency, it also regulates employee rights in cases where the employer’s account is frozen.

In the case of employer insolvency, the following employee rights are guaranteed by the Agency that was established for this purpose:

• minimum wage for the three months preceding the insolvency;
• compensation salary for sick leave up to the amount of minimum wage for each month of sick leave in the last three months preceding the insolvency;
• compensation salary for annual leave that is not taken (up to the amount of minimum wage);
• severance pay up to the amount of half of the legally regulated severance pay and one-third of the amount of damages awarded for injury at work or occupational disease.

In the case where the employer’s account is frozen, the following employee rights are guaranteed by the Agency:

• minimum wage for the last three months preceding the insolvency  
• compensation salary for sick leave up to the amount of minimum wage for each month of sick leave in the last three months preceding the insolvency.

Aside from this, the Agency is required to pay social insurance contributions. The detailed provisions on the procedure in cases where the employer’s account is frozen (i.e., the employer’s obligations, those of the Agency and other authorities, such as the central government body responsible for finance) have been introduced in the Act on Guarantees of Rights of Employees in cases of employer insolvency.