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The draft of the new Employment Act presented

27/03/2014

On 23 January 2014, the Croatian Government submitted the proposition of the new Employment Act to the Parliament. The new Employment Act should help dealing with the consequences of the economic crisis and high unemployment rate. Compared to the currently applicable Employment Act, some of the most important proposed changes refer to the following:

- termination of an employment contract – an employment contract would also terminate due to the death of the employer – natural person, in case of closing of the craft (Croatian: “obrt”) ex lege, as well as due to deletion of the sole trader from the court registry and upon completion of the liquidation process (this would also apply to persons for whom the prohibition of the termination is prescribed, e.g. pregnant women);

- overtime work – an employer would be obliged to deliver a written request for overtime work to an employee, whereas the total work of an employee should not last longer than 56 hours a week, nor should it, stretched out over a period of 4 consequent months, last longer than 48 hours a week on average. Overtime work should not last longer than 180 hours a year, unless such possibility has been agreed by means of an employment contract, employment by-laws or collective bargaining agreement, in which case it should not last longer than 250 hours a year;

- course of the notice period – the notice period would not run during temporary inability to work (sick leave); however the employment relationship of an employee who was temporarily unable to work before the notice period was supposed to start running or became temporarily unable to work during a notice period, would at the latest cease within 6 months after delivery of the termination decision to the employee, regardless of the duration of the temporary inability and the prescribed duration of the notice period. Also, the notice period would run during annual vacation and paid leave, unless otherwise agreed by means of an employment contract, employment by-law or collective bargaining agreement;

- judicial termination of an employment contract – damages in a case of judicial termination of an employment contract would be reduced to 3 - 8 prescribed or agreed salaries;

- statute of limitation for claims arising out of an employment relationship – the statute of limitation would occur after 5 years (instead of current 3 years);

- the right to strike – the unions would be entitled to call for a strike and to carry it out in case that salaries, part of salaries or salary compensations were not paid out by the maturity date.

The proposition needs to pass two readings in the Parliament and due to the increasing objections raised by the unions when it comes to certain provisions (especially with reference to overtime work), it remains unclear what will eventually be the content of the new Employment Act.

Authors

Portrait ofAna-Marija Skoko
Ana-Marija Skoko
Partner
Zagreb