10.6092/issn.1561-8048/10773
Key measures relating to labour law in Croatia in the COVID-19 crisis are job-saving measures that provide financial support for employers (salary subsidies and tax relief). Measures meant to mitigate the difficulties caused by the COVID-19 crisis are still a work in progress. Wage cuts in the public sector have been announced.
application/pdf
1561-8048
10773
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Ivana Grgurev
Italian Labour Law e-Journal
Job-saving measures
COVID-19 and Labour Law: Croatia
Text.Serial.Journal
https://illej.unibo.it/
13
National Reports
2020-04-15
2020-04-14
2020-04-15
2020-09-15
ILLeJ
Ivana Grgurev
2020/04/15
10.6092/issn.1561-8048/10773
University of Zagreb, Faculty of Law.
1561-8048
1S
Job-saving measures
en
COVID-19 and Labour Law: Croatia
https://illej.unibo.it/article/download/10773/10682
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COVID-19 and Labour Law: Croatia                                               Italian Labour Law e-Journal
Ivana Grgurev                                                                 Special Issue 1, Vol. 13 (2020)
ivana.grgurev@pravo.hr                                          Covid-19 and Labour Law. A Global Review
                                                                                            ISSN 1561-8048
                                                             https://doi.org/10.6092/issn.1561-8048/10773




                  COVID-19 and Labour Law: Croatia
                          Ivana Grgurev *

                                               Abstract

     Key measures relating to labour law in Croatia in the COVID-19 crisis are job-saving measures
     that provide financial support for employers (salary subsidies and tax relief). Measures meant
     to mitigate the difficulties caused by the COVID-19 crisis are still a work in progress. Wage
     cuts in the public sector have been announced.
     Keywords: Covid-19; Labour Law; Job-saving measures.




    In Croatia, the disease known as COVID-19 was declared an epidemic on 11 March
 2020. Intensive legislative activity ensued. In this contribution, the following pieces of
 legislation will be analysed: the legislation on income support and job-saving provisions
 (section 2), on social distancing and work from home (section 3), on parental leave (section
 4) and on particularly vulnerable workers (section 5). Furthermore, Section 6 deals with the
 role of social partners in the effort to design those measures. The gaps left uncovered by
 the measures will be addressed in Section 7. Finally, a few concluding remarks are
 presented in Section 8.


 1. Effects of the Interruption of Business Operations on Employment

 1.1 Financial Support for Employers

    The interruption of business operations has resulted in dismissals and unpaid leave in
 industries affected by the crisis (in particular, in the hospitality sector and in labour-
 intensive industries)1. Therefore, there was a need to introduce a new active policy measure.
 The job-saving measure is at the disposal of employers affected by the COVID-19 crisis in
 the accommodation, food and beverage sectors, in the transportation and warehousing
 sectors and in a number of labour-intensive industries (textile, clothing, footwear, leather,
 wood and furniture). It is also available to employers who have been unable to perform
 activities because of the decisions of the Civil Protection Headquarters, and to other
 employers who can prove the negative impact of COVID-19 crisis on their business

 *
  Ivana Grgurev, Professor of Labour Law and Social Security Law, University of Zagreb, Faculty of Law.
 1-The    Croatian Bureau for Employment reports on influx of newly unemployed.
 https://www.hzz.hr/statistika/.
    Ivana Grgurev                                                               Italian Labour Law e-Journal
                                                                               Special Issue 1, Vol. 13 (2020)
                                                                  Covid-19 and Labour Law. A Global Review
                                                                                    Section: National Reports




operations (or establish facts from which it may be presumed). They can claim salary
subsidies for their employees as follows:
    - an amount of HRK 3,250.002 (raised to HRK 4,000.003 for April and May) per
        month for each full-time employee;
    - up to HRK 1,625.004 per month for part-time workers;
    - a prorated amount (based on HRK 3,250.005 or HRK 1,625.00 respectively)6 per
        employee for the time they could not work because of the Decision of the Civil
        Protection Headquarters, and
    - an amount of HRK 203.127 (HRK 250,008 for April and May) per month as a
        subsidy for the pension insurance contribution paid into the second pillar.
   Even the employers who dismissed the employees due to the COVID-19 crisis are
entitled to subsidies when they re-employ former employees9.
   A total of 86,764 employers (who employ about 506,000 employees) have claimed the
financial support described above.10 It is a considerable number in light of the overall
number of employees in Croatia (1,517,580)11.


2. Tax Relief for Employers

    Tax relief is available to employers whose income has declined (or is likely to decline in
the next three months compared to the same period of last year) by at least 20% due to the
COVID-19 crisis12. With the initial measure, the employers affected by the crisis were
entitled to an interest-free deferral of taxes due. Two weeks after introducing this measure,
the Government decided to introduce additional measures because it faced the reasoned
criticism of employers: now they can be exempted from paying tax completely or they can
pay the deferred tax in instalments. It is obvious that most employers would not be able to
accumulate enough money to pay their taxes immediately after the crisis, as they would be
required to in line with the initial measure. According to the Amendment to the Ordinance
on the Implementation of the General Tax Act, if the crisis lasts longer than three months,
entrepreneurs can defer paying their taxes by three more months. Entrepreneurs unable to
meet their fiscal obligations by that deadline can apply to pay tax in monthly instalments
over up to 24 months, interest-free. Employers are exempted from paying social security

2 About EUR 423.00.
3 About EUR 526.00.
4 About EUR 214.00.
5
  About EUR 423.00.
6
  About EUR 214.00.
7 About EUR 27.00.
8 About EUR 33.00.
9 Croatian Employment Service, Job-saving measures in coronavirus-affected industries (COVID - 19).

Available at: https://mjera-orm.hzz.hr/potpora-ocuvanje-radnih-mjesta/
10http://www.nhs.hr/novosti/subvencija_i_za_otpustene_radnike_ako_ih_do_sutra_poslodavci_vrate_na_p

osao_70881/
11 Croatia in Figures, Croatian Bureau of Statistics, Zagreb, 2019, p. 6. Available at: https://www.dzs.hr/
12 Ordinance on Implementation of General Tax Law (Official Gazette No 35/2020).



https://doi.org/10.6092/issn.1561-8048/10773                                                                 2
     Ivana Grgurev                                                                Italian Labour Law e-Journal
                                                                                 Special Issue 1, Vol. 13 (2020)
                                                                    Covid-19 and Labour Law. A Global Review
                                                                                      Section: National Reports




contributions on subsidized salaries. Those whose business operations have been closed by
the decision of the competent authority during the COVID-19 crisis will be exempted
from paying tax arrears if their income decreases by at least 50% within the period of three
months after the entry into force of this provision relative to the same period in the
previous year13.


3. Health and Safety of Employees (Social Distancing, Remote Work)

   Social distancing measures and limiting freedom of movement have significantly
affected working conditions. Due to the coronavirus lockdown, only necessary service
providers are at work and only essential stores (such as grocery stores and pharmacies) are
open. Their opening hours have been reduced14. Employers are required to organize work
from home where possible, both in the private and public sectors15.
   Employees who do not work at home need to obey social distancing measures and
specific health and safety measures. For instance, according to Article III of the Decision
on the General and Specific Protective Measures implemented by taxi service providers,
employers are required to inform employees about the COVID-19 disease and provide
working conditions that, inter alia, include regular cleaning of the premises with
disinfectants16. The mandatory quarantine and home isolation for drivers of international
transport cargo vehicles upon entry into the Republic of Croatia have been introduced as
well17.


4. Increased Care Burden due to the Closure of Schools and Day Care Facilities
(Parental Leave)

   Salary compensation during parental leave has been raised but there have been no
measures to help parents facing an increased care burden due to the closure of schools and
day care facilities18.




13 Arts 71c – 71m of the Amendment to the Ordinance on the Implementation of General Tax Act (Official
Gazette No 43/2020).
14 The Civil Protection Headquarters of the Republic of Croatia has limited opening hours of stores (Decision

on Store Opening Hours (Official Gazette No 35/2020)).
15 Decision on Measures Limiting Social Gatherings, Work in Commerce, Services and Sports and Cultural

Events (Official Gazette No 32/2020) and Decision on the Work Organisation in the State Administration
Bodies during the Epidemic of the COVID-19 Disease Caused by SARS-CoV-2 Virus (Official Gazette No
32/2020).
16 Official Gazette No 35/2020.
17 Decision on the Procedure and Application of Quarantine and Home Isolation for Drivers of International

Transportation Lorries during the Declared COVID-19 Disease Outbreak (Official Gazette No 37/2020).
18 Amendment to the Act on Maternity and Parental Benefits (Official Gazette No 37/2020).



https://doi.org/10.6092/issn.1561-8048/10773                                                                   3
     Ivana Grgurev                                                                Italian Labour Law e-Journal
                                                                                 Special Issue 1, Vol. 13 (2020)
                                                                    Covid-19 and Labour Law. A Global Review
                                                                                      Section: National Reports




5. Particularly Vulnerable Workers (Self-employed, Casual Workers)

   The right to financial assistance for the so-called permanent seasonal workers19 and co-
financing of the costs of extended pension insurance is prescribed by the Amendment to
the Act on Labour Market.20
   Certain groups of self-employed persons (such as freelance artists) who lost their
income due to the closure of theatres, museums or concert hall also need to be protected.
Therefore, the Ministry of Culture has announced on their official web site that it is about
to establish a crisis fund. The crisis fund will disburse funds to natural and legal persons in
the culture sector, to cover the extended period of preparatory activities for approved
cultural projects whose implementation has been delayed due to the epidemic.21


6. Role of Social Partners in Designing Measures (Social Dialogue)

   The measures that were introduced initially were designed without any prior
consultation with the social partners. The failure to consult social partners when the initial
measures were designed resulted in the need to redesign them.22 Regarding the public
sector, the Government issued a Conclusion stating that it would launch negotiations with
the social partners on the amount which will serve as the base for the salary calculation for
civil servants and employees in the state administration and for other employees in the
public sector.23Apart from this, they will negotiate reducing other financial rights
guaranteed to the civil and public servants and employees in the public sector by the
applicable collective agreements.


7. Issues that have not been sufficiently addressed or have been left vacant by the
provisions currently in force

   The initial tax relief measures (such the postponement of tax payments) were faced with
serious criticism as inadequate. Therefore, the redesigned measures were introduced, taking
on board the reasoned criticism of employers.24 Regarding the issues that have been left
vacant by the recently introduced measures, it should be mentioned that there here have



19 A permanent seasonal worker is a casual worker for whom the employer pays extended pension insurance
contributions between seasons when s/he does not work and which guarantees the employer that the
seasonal worker will accept the offer for employment for the next season; if the worker declines the offer to
conclude an employment contract s/he needs to reimburse the contributions paid by the employer (Art 16 of
the Labour Act).
20 Official Gazette No 32/2020.
21 https://www.koronavirus.hr/vladine-mjere/mjere-za-kulturu/133
22
   See above, Section 2.2.
23 Conclusion of 2.4.2020, No 022-03/20-07/89, 50301-25/14-20-2 (Official Gazette No 41/2020).
24 See above, Section 2.2.



https://doi.org/10.6092/issn.1561-8048/10773                                                                   4
 Ivana Grgurev                                                           Italian Labour Law e-Journal
                                                                        Special Issue 1, Vol. 13 (2020)
                                                           Covid-19 and Labour Law. A Global Review
                                                                             Section: National Reports




been no measures introduced to help employees who need to reconcile work and care
provision due to the closure of schools and day care facilities.


8. Conclusion

    Job-saving measures introduced so far comprise subsidies for salaries and pension
insurance contributions, and tax relief for employers in the private sector. After heavy
criticism levied by employers, the initial measures on the amount of financial support and
tax relief for employers have been amended. The conclusion is that the effort to design the
anti-crisis measures is a work in progress and that social partners should have been
consulted in the process of designing the measures for the private sector, just as they will
be consulted in the public sector as per the announcement. Since the public sector needs to
bear its part of the financial burden of the crisis just as the employees in the private sector
do, their salaries and other financial rights are likely to be cut soon.




Copyright © 2020 Ivana Grgurev. This article is released under a Creative Commons
Attribution 4.0 International License




https://doi.org/10.6092/issn.1561-8048/10773                                                          5
