Croatia: Latest working life developments – Q4 2017

The rise in the minimum wage, an increase in foreign workers, collective agreements for public sector employees and possible industrial action by shipyard workers are the main topics of interest in this article. This country update reports on the latest developments in working life in Croatia in the fourth quarter of 2017.

Increase in gross minimum wage

The government and parliament increased the amount of the gross minimum wage for 2018 from HRK 3,276 (€439 as at 12 January 2018) to HRK 3,438.80 (€461) on 13 December 2017. Approximately 76,000 workers in Croatia receive the minimum wage. The Union of Autonomous Trade Unions of Croatia (SSSH) said that although the minimum wage should increase to a level where it is 50% of the average wage, it has remained the same at 42.9%. In addition, the law on the minimum wage was amended so that any additions to the basic wage, such as overtime, night work, work on Sundays and on national holidays, have to be paid on top of the minimum wage level.

As a measure to help compensate employers for the increase, the government has proposed reducing the minimum rate for health insurance contributions by 50%, which are paid by employers. This will result in employers paying HRK 103.85 (€13.9) less monthly in contributions for the minimum wage. The net amount of the minimum wage is HRK 2,752 (€369) while employers’ costs will decrease from HRK 3,839.47 (€515) to 3,735.62 (€501).

Increase in foreign worker quotas

The government approved quotas for foreign workers on 7 December 2017, with 31,000 work permits to be issued for 2018. The quotas consist of 9,000 extended permits and 22,000 new ones. Most of this extended quota will be applied to Croatia’s strongest economic field, the tourism sector, but will also be used in the building sector and shipyards. Unions, however, want the quotas to be lowered. They believe that the minimum wage and, indeed, all wage levels should be increased to motivate unemployed Croatians to work, and those who do have jobs to stay in Croatia. Employers have supported the government’s decision but stated that the quotas should be increased.

New collective agreement signed for public sector employees

The government and representatives of 11 trade unions signed a four-year collective agreement for public sector employees on 27 November 2017 with basic pay being set at HRK 5,421.54 (€727) as of 1 November 2018 and transport compensation rising by 33% for staff who do not have access to public transport. The agreement applies to doctors, nurses, teachers, and workers in welfare and culture. Representatives of the Croatian Post (Hrvatska pošta) and representative trade unions signed a new three-year collective agreement for the company’s workers on 8 December.

Computer science to be mandatory in schools

On 16 November 2017, the government presented a plan to introduce obligatory computer science lessons in elementary schools in 2018. It hopes this will help young people prepare for a rapidly changing world and the jobs market.

Ongoing problems at Uljanik shipyard

Trade unions at the Uljanik Group shipyard at Pula, concerned about the firm’s significant losses, issued a statement on 14 November 2017 voicing their concerns about the future of the company and announcing industrial action. The trade union representatives noted that they had already asked the company management (PDF) to report on the situation at the shipyard but with no response. The management, however, on 27 November presented the government with a proposal for restructuring of the Uljanik Group, which envisages the involvement of the state in the process, as well as finding a strategic partner to ensure the long-term sustainability of the company.

Commentary

The introduction of obligatory computer science lessons in primary education is a praiseworthy activity because it creates the essential preconditions for younger generations to create a competitive and flexible labour force, which will be an important factor for the strong and long-term growth of the Croatian economy. However, the unions have underlined that the proposal does not allow enough time for schools to prepare, bearing in mind the serious shortage of teachers with adequate ICT knowledge.

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