Croatia: Latest working life developments – Q2 2017
Emergency legislation to prevent the collapse of large companies, help for posted workers, Croatia’s slow post-transition economic progress and the retention of young and skilled labour 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 2017.
Emergency legislation to prevent collapse of large companies
After a very optimistic outlook in the first quarter of 2017, the situation changed significantly in the second quarter. On 6 April 2017, Croatia's parliament passed an emergency law to shield the economy from the collapse of large companies. This follows the revelation that the country's largest private company, the food producer and retailer Agrokor, had debts of about €6 billion – six times its equity. The consequences are not yet clear, but the Agrokor crisis will almost certainly have an impact on Croatia’s gross domestic product (GDP). The trade unions argue that the most important task is to preserve the jobs of up to 60,000 workers employed by the company and its suppliers, and to ensure that their employment rights under the relevant collective agreements are fully respected, which does not always happen in Croatia.
Help for posted workers
The Union of Autonomous Trade Unions of Croatia (SSSH) established a counselling centre (PDF) for posted workers who work in another EU country and have an employment contract with a Croatian employer, or with an agency for temporary employment registered in Croatia. Posted workers are covered by Croatia’s labour law, but they also have some rights under their host country’s labour legislation, including maximum working hours, annual leave entitlement, and health and safety regulations in the working place.
Slow progress implementing structural reforms
The Croatian Employers’ Association (HUP) organised an employer branding event (PDF) to promote the exchange of best business practices in Croatia and abroad. Separately, at an event looking at the challenges and opportunities posed by labour market change, HUP presented a comparison of the progress Croatia has made with other post-transitional countries in implementing structural reforms, particularly on aspects of the economy such as the business climate, industrial relations, labour legislation and the tax system. The figures show that Croatia is lagging behind many other central and eastern European countries.
Failure to retain Croatia’s promising workers
For some years, the public perception has been that increasing emigration is taking away Croatia’s most promising potential workers – the young and the highly educated. The Global Competitiveness Report 2016–2017 (PDF), published by the World Economic Forum, ranks Croatia 132nd out of a total of 138 countries in talent retention and 133rd in terms of its attractiveness for talented people. A similar index, the IMD World Talent Report 2016 (PDF), put Croatia in 53rd place out of 61 countries, while in the 2015 Youthonomics Global Index (PDF) that analyses how youth-friendly a country is, Croatia was ranked 51st out of 64 countries.
Given the low level of investment in research and development (R&D) and the slow progress of its economy in comparison with other transitional countries, these findings pose serious questions about whether Croatia can attract and keep youngscientists, medical doctors and IT experts, in whose skills and education the country has invested significant resources. For example, unions were dissatisfied that employment policy measures, which introduce new training schemes, do not guarantee employment for trainees.
While there are no official statistics that confirm the level of emigration, indicators do appear to confirm that Croatia does not sufficiently value its talented or young people. With better social dialogue and improved trust between social partners, Croatia could enhance its economic competitiveness and promote stronger economic growth. This would motivate its young and educated population to stay in the country or return from abroad. Such activities require full commitment from all stakeholders, particularly the social partners; this commitment could, in the long-term, benefit all citizens of Croatia.