Croatia: Latest developments in working life Q1 2019
Continuing labour shortages, the reaction of trade unions to new pension reforms and the resolution of a strike in the agriculture industry are the main topics of interest in this article. This country update reports on the latest developments in working life in Croatia in the first quarter of 2019.
Concern over lack of labour force
The ongoing workforce shortage is rapidly becoming one of the most burning issues in Croatia.  While the topic was rarely discussed a few years ago, the latest surveys by the American Chamber of Commerce in Croatia (AmCham) show that business owners now consider the availability of labour to be their most pressing issue.
Within the EU, Croatia stands out because as many as 40% of working age citizens do not work. The country has the second worst employment rate of all Member States, only behind Greece.
Regulation on student work and Act on fostering come into force
The Minister of Science and Education issued a regulation in relation to student work. It defines which student centres established by higher education institutions are allowed to mediate between contracting parties (students and employers).
- Ministry of Science and Education: Pravilnik o ispunjavanju uvjeta za obavljanje djelatnosti posredovanja u obavljanju studentskih poslova (OG 3/19)
Fostering became an official profession after the Act on Foster Care came into force on 1 January 2019. The allowance paid to foster parents, which was previously HRK 300–500 (€40–67 as at 29 April 2019) per month, increased to HRK 2,500 (€336). For foster parents of children and adults with special needs, the allowance increased to HRK 5,000–6,000 (€672–807).
- Parliament of the Republic of Croatia: Odluku o proglašenju Zakona o udomiteljstvu (OG 115/18)
Rise in public sector salaries
The government concluded an annex to the collective agreement for civil servants and employees employed in civil services with the representative trade unions. The annex defines the base line for the calculation of salaries.
The government also concluded an agreement on the base line for salary calculations in public services, with trade unions representing public servants. According to the agreement, the base salary for public service workers was raised by 3% in January 2019 and will be raised by a further 2% in September 2019.
- Government of the Republic of Croatia: Sporazum o osnovici za izračun plaće u javnim službama (OG 2/19)
- Government of the Republic of Croatia: Dodatak I. Kolektivnom ugovoru za državne službenike i namještenike(OG 2/19)
Unions propose action against pension reform
Trade unions decided to collect signatures for a referendum against the pension reforms that were passed by parliament in December 2018. Under an initiative called ‘67 is too much’ – a reference to the fact that the retirement age has been raised to 67 – the trade unions plan to collect the signatures in April 2019.
The trade unions believe that people in Croatia cannot work until they are 67, that the penalty for early retirement is too high and that the process of bringing the retirement age for women in line with that of men is too swift.
The ’67 is too much’ initiative proposes that an insured person be entitled to an old age pension when they reach 65 years of age and have completed 15 years of qualifying periods. It also proposes that an insured person be entitled to an early age pension at 60 years of age and after 35 years of qualifying periods.
Additional proposals relate to reducing the penalty for early retirement from 0.3% to 0.2%, and reducing the speed at which the retirement age for women is increased until it matches that of men. (Under the previous regulation, parity would have been achieved by 2030. The new Act stipulates that this should occur by 2027.)
Strike at combine harvester factory resolved
The SAME DEUTZ-FAHR Žetelice factory in Županja, a town in eastern Slavonia, is part of the Italian SAME DEUTZ-FAHR (SDF) group. It produces 400 combine harvesters a year.
Workers at the factory threatened to go on strike in early January 2019 due to low wages. They demanded a wage increase of HRK 750 (€101) and an 8% allowance for special working conditions. In response, the factory management offered to increase salaries by HRK 85 (€11) and by HRK 400 (€54) for salaries that are not liable to taxation if workers agreed not to renegotiate their wages for the next three years.
Workers did not accept the proposal and went ahead with the strike.  On 7 February, the Supreme Court ruled that the strike was unlawful and so the workers returned to their posts on 8 February.
At a meeting on 1 March, representatives of the Union of Autonomous Trade Unions of Croatia (SSSH), the Croatian metal industry syndicate and the SDF agreed on salary increases for SDF employees in Croatia.
From March 2019, the salary increased by HRK 487.50 (€66). From March 2020, the salary will further increase by HRK 112.50 (€15) and from March 2021, there will a final increase of HRK 150 (€20). Trade unions promised that they would not demand any further changes to the collective agreement or any further salary increases until 1 March 2022.
The key to the mobilisation of the inactive population is to support the activation of currently inactive persons, primarily by broadening and adjusting the net of preschool institutions and other institutions for better balancing work and private life. The example of the SDFG is a positive experience of the compromise in the collective negotiations in Croatia.