Croatia: Union furore at public sector wage freeze
Union protests that a public sector pay freeze was unlawful have been rejected by Croatia's Constitutional Court.
Unions have protested that the Croatian government’s 2014 pay freeze, affecting 180,000 public sector workers and its move to extend it to 31 March 2015 are unlawful. Trade unions told the Constitutional Court that the government could not take a unilateral decision to cancel collective agreements.
However, the Croatian daily newspaper Novi List reported that the court ruled in favour of the government because the financial crisis had made a pay freeze necessary (in Croatian).
The freeze effectively banned automatic seniority wage increases of 4%, 8% and 10% set out in collective agreement provisions. The agreement covered 180,000 civil servants and public sector workers. Christmas bonuses and holiday supplements were also cancelled. The freeze was originally due to end in December 2014, but the Croatian government extended it to the end of March 2015.
Croatia has been in crisis almost permanently since 2008 and pressure is growing to find savings in the public sector, which employs 22% of Croatia’s workforce. Public sector pay was cut by 3% in 2013. In October 2014, the government warned that if the economic situation did not improve by May 2015, it would cut public sector salaries by another 3% in order to save €85 million. However, with parliamentary elections looming, the Prime Minister announced on 13 March that there would be no pay cuts. The government hopes to make savings in the public sector wage bill by 'natural wastage', encouraging early retirement and limiting new recruitment.