On 1 January 2023
- the amendments to the Labour Law,
- the new Law on Maternal and Parental Benefits, and
- the new Law on Suppressing of Undeclared Work
entered into force introducing a number of novelties in employment relations.
We set out below the main novelties which are being introduced in employment rights and obligations.
Amendments to the Labour Law
Definite term employment contracts
- With certain exceptions, both the duration (a maximum of three years) and the number (a maximum of three consecutive contracts) of definite term employment contracts are now limited.
- An employee after six months of a definite term employment has the right to request from the employer entering into an indefinite term employment contract and the employer must explain reasons in writing if the employee’s request is rejected.
Mandatory provisions of an employment contract
- The list of mandatory provisions that have to be included in an employment agreement has been expanded and includes, inter alia, provisions on:
- gross salary, including the gross amount of the basic salary, allowances and other remunerations for the work performed, as well as the payment periods of these and other remunerations to which the employee is entitled based on the employment;
- the date of entering into the employment contract and the date of commencement of work.
Regulation of “remote work” and “work at a separate workplace”
- The main distinction between remote work and work at a separate workplace is that remote work is always work performed via information and telecommunication technology and the employee may choose the location from which the remote work will be performed, while in case of work at a separate workplace, the separate place of work must be specified (e.g. employee’s home).
- If an employee is working at a separate workplace, the employment contract must contain provisions on equipment for execution of work and reimbursement of associated costs if the work at a separate workplace lasts longer than seven days in a calendar month, while the same provisions are optional in case of remote work.
- In case of important personal needs (such as illness, pregnancy, care for a child of up to eight years of age or a sick family member), an employee has the right to request from the employer to temporarily work from a separate workplace; if the request is rejected, employer must explain reasons in writing.
Additional employment
- An employer’s consent for an employee’s additional employment with another employer (for up to eight hours a week) is no longer required.
Temporary employment
- New rules and obligations for agencies regarding temporary employment have been introduced.
Probation period
- Maximum duration of a probation period remains at six months, but the probation period may be extended if an employee was absent from work during the initially agreed probation period (e.g. due to sick leave or maternity leave).
Work-life balance
- An employer must respect employees’ work-life balance and not contact them during rest periods (“right to disconnect”) unless there is an emergency, or if communication with employees’ is essential due to the nature of the work.
Unpaid leave and leave of absence from work
- Employees are entitled to ”unpaid leave” of up to five days a year (to care for a family member) and to paid “leave of absence from work” of one day a year (due to an important family reason that requires their immediate presence).
Salary
- The salary must be agreed in gross amount.
- Definition of salary and its components, as well as obligations regarding calculations and payments, have been prescribed.
Salary increase for the work performed on Sunday
- Employees are entitled to a salary increase of at least 50% for work performed on Sunday.
Employee’s remunerations not deemed as salary
- Remunerations paid by an employer as material rights based on employment (jubilee award, holiday and Christmas allowance etc.);
- Remunerations paid by an employer as cost compensation.
Given that the aforementioned remunerations are not part of salary, they must be clearly separated from salary and salary compensation because they are not taken into account when calculating salary compensation in case of annual leave, unemployment benefit, severance pay, possible enforcement on the employee’s salary, etc.
Electronic delivery
- Employer’s decisions and other documents may be delivered to employees electronically, provided that such decisions and documents are available to employees, printable and storable, and that the employer retains proof of delivery or receipt.
Dignity protection of employees
- Employers with more than 75 employees must appoint two persons responsible for the protection of employees’ dignity, who may not be of the same gender.
Digital work platforms
- Digital work platforms have been introduced as a new form of work, and the provisions related to digital work platforms will enter into force 1 January 2024.
Obligation to harmonize employment by-laws
- Employers must harmonize their employment by-laws with the new law by 1 July 2023.
Law on Maternal and Parental Benefits
- Apart from recent changes (paternity leave in duration of ten working days and the impossibility of transferring two months of parental leave to the other parent), salary reimbursement during parental leave (i.e. after the child turns 6 months of age) is now significantly increased.
- Provisions regarding entitlement to a part-time work as well as the rights of nursing mothers have been introduced.
Law on Suppressing of Undeclared Work
- Several measures to prevent and sanction undeclared work are being introduced.
- If an inspection authority determines undeclared work has been performed, it will be deemed that the respective employee has been employed full-time with the monitored employer for the last six months (unless the evidence shows otherwise). The employer in breach will be ordered to register for social security, as well as to pay EUR 2,650 for each such employee (the value will be increased in case of a repeated offence).
- Ministry of Labour shall establish and maintain electronic records on employment, as well as a public list of compliant employers and a public list of non-compliant employers.
- Croatian Employment Service shall maintain electronic records on inactive people.
- Joint liability of a contractor for its sub-contractors’ obligations towards their employees (with limited exceptions) has been introduced.
As a result of the above changes to Croatian employment legislation, certain obligations are imposed on the employers in Croatia.
In order to comply with new statutory requirements, employers should consider taking following actions:
- examination and update of existing employment by-laws no later than 1 July 2023;
- appointment of two persons responsible for the protection of employees’ dignity no later than 1 July 2023 (applicable only to employers with more than 75 employees);
- examination of existing employment contracts and HR policies and practices, and ensuring their compliance with amended labour legislation.
If you require any assistance or clarification regarding the above, please do not hesitate to contact us.
Paul Suchar
Partner
Tel. +385 1 5390 032
psuchar@kpmg.com
Hrvoje Pajtak
Attorney at Law
Tel. +385 1 5390 062
hpajtak@kpmg.com
Mihaela Koren Šola
Attorney at Law
Tel. +385 1 5390 140
mkoren@kpmg.com
Lucija Maričić
Attorney at Law
Tel. +385 1 5390 285
lmaricic@kpmg.com
Law Firm Pajtak & Delija LLC
in cooperation with KPMG Legal s.r.o. advokátní kancelář
Ivana Lučića 2A/17
Tel: +385 (0)1 5390 062
Fax: +385 (0)1 5390 111
hpajtak@kpmg.com
sdelija@kpmg.com
www.kpmg.hr
