Croatia: latest working life developments Q2 2018

Union opposition to pension reform, levels of work satisfaction and new collective agreements in the tourism, hospitality and construction sectors are the main topics of interest in this article. This country update reports on the latest developments in working life in Croatia in the second quarter of 2018.

Unions oppose planned pension reform

The statutory retirement age in Croatia is currently due to increase to 67 years by 2033, but the government would like to make this transitional period shorter. Accordingly, the government carried out an in-depth analysis of the pension system in 2017 – including projections and the impact of possible solutions – and launched a pension reform in the second quarter of 2018.

The primary purpose of the reform is to make the pension system sustainable, given that the worker-pensioner ratio is currently 1.2:1, only 19% of pensioners have 40 years of service, and pension allowances are low. While the European Commission states that Croatia must make tough decisions about its current pension system due to its ageing society, unions – primarily the Union of Autonomous Trade Unions of Croatia (SSSH) and the Trade Union of Education, Media and Culture of Croatia (SOMK) – view the recommended reforms as harmful. On 14 June, both unions organised demonstrations against the reforms.

70% of Croatians are satisfied with their jobs

On 10 May, the results of a survey commissioned by the SSSH – ‘Work on a human scale’ – were published.1 The survey shows that about 70% of Croatians are pleased with their job, compared to an EU average of 86% in 2015. Those with fixed-term contracts report a greater level of dissatisfaction than those with open-ended contracts, because it is more difficult for them to plan for their future and ensure their income. Fixed-term contracts are also a source of job insecurity. The survey shows that the strongest reason for job satisfaction is pay, followed by working in their chosen profession, the level and type of educational attainment, and coverage by a collective agreement.

Collective agreements in tourism, hospitality and construction

The sectoral collective agreement for tourism and food and beverage services (OG 36/2018) was signed on 18 April between the Croatian Employers' Association (CEA) and the two largest trade unions in the tourism sector: the Trade Union of Tourism and Services of Croatia (STUH) and the Union of Istria, Kvarner and Dalmatia. According to the agreement, a gross salary of at least HRK 4,700 (€633 as of 20 August 2018) is guaranteed for typical jobs in the hospitality sector such as cleaners, waiters and chefs. The aforementioned amount represents the minimum basic wage that supplements for night work, weekend work, holiday work and overtime work are calculated (according to the collective agreement). Its application has been extended to all employers and workers in the sector.

A new collective bargaining agreement for the Croatian national forestry company Hrvatske šume (OG 37/2018) came into the force in April. The agreement was signed by the management of the company and the Croatian Forestry Union (HSŠ). It gives higher material rights to employees over the next four-year period.

The collective agreement for the construction industry was extended to the whole sector by the Ministry of Labour and Pension System (OG 49/2018) in May. With the extension, social partners aim to increase the wages and salaries of workers in the building sector, as well as to enhance working conditions and productivity.

Commentary

Currently, just over 20% of Croatian workers have fixed-term contracts, while the European average is 14.4%. Almost all newly employed workers are hired on fixed-term contracts and those with contracts of less than six months are particularly vulnerable to less favourable work conditions, lower wages and uncertain working hours. The improvement of salaries and working conditions in the tourism, hospitability and construction sectors should contribute to higher levels of employment in those sectors.


1 SSSH (2018), Rad po mjeri covjeka, Friedrich Ebert Stiftung, Zagreb.

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