1. What types of employment contract are recognised in Croatia?
The following types of employment contract are recognised in the Republic of Croatia:
- an employment contract of indefinite duration; and
- a fixed-term contract.
2. What are the minimum and maximum terms for which a fixed-term employment contract can be concluded in Croatia?
Fixed-term contracts may be concluded for the purpose of taking up employment where the end of the employment is determined by objective conditions such as reaching a specific date, completing a specific task, or the occurrence of a specific event.
The total duration of fixed-term contract may not exceed three consecutive years, unless where it is necessary for the purpose of replacing a temporarily absent employee or where it is on objective grounds allowed by law or a collective agreement.
3. How can a contract of employment be terminated in Croatia?
A labour contract may be terminated:
- upon expiration of the period for which a fixed-duration labour contract has been concluded;
- upon the death of the employee;
- when the employee has reached 65 years of age and 15 years of employment service, unless otherwise agreed by the employer and the employee;
- under an agreement between the employer and the employee;
- upon the submission of a legally effective decision on retirement due to general inability to work;
- by cancellation (notice given by the employer) or resignation (notice given by the employee); or
- by a decision of the court having jurisdiction.
4. What are the applicable notice periods, and what determines their length?
In the case of regular notice, the notice period is at least:
- two weeks, if the employee has continuously worked for the same employer for less than one year;
- one month, if the employee has continuously worked for the same employer for one year;
- one month and two weeks, if the employee has continuously worked for the same employer for two years;
- two months, if the employee has continuously worked for the same employer for five years;
- two months and two weeks, if the employee has continuously worked for the same employer for ten years; or
- three months, if the employee has continuously worked for the same employer for twenty years.
In the case of an employee who has continuously worked for the same employer for twenty years, the above notice periods are extended by two weeks if the employee has reached 50 years of age, and by one month if the employee has reached 55 years of age.
Where the employment contract is terminated by the employee for a serious reason, the period of notice may not exceed one month.
5. Is it possible to employ employees as teleworkers in Croatia, and are there any particular regulations that apply (differentiating from other regulations)?
Yes, it is possible to employ employees as teleworkers in the Republic of Croatia.
In addition to the provisions that must be covered by an employment contract, a teleworker employment contract should also contain the provisions on:
- machines, tools and equipment necessary for the performance of the work which the employer is obliged to provide, install and maintain;
- use of the employee’s own machines, tools and other equipment and the coverage of costs thereof;
- coverage of other costs to the employee concerning the performance of work; and
- occupational training methods and further training of employees.
6. What are the rights for women who become pregnant during their employment contract, and are they protected from being dismissed?
In the case of an employment contract of indefinite duration, women are protected in a way that the notice period does not run during pregnancy, maternity leave, adoption leave, leave for taking care for the child with serious developmental problems, exercise of the right to work short-time working hours by the parent or adoptive parent.
Fixed-term employment contract terminates upon expiration of the period for which a fixed-duration employment contract has been concluded (regardless of whether a woman is pregnant or not).
7. What types of paid days-off are the employees entitled to in Croatia?
An employee is entitled to annual leave of at least four weeks in each calendar year.
In the case of a minor (under the age of 18) or employees engaged in works involving exposure to harmful effects in spite of the implementation of health and safety at work protection measures, they are entitled to at least five weeks of annual leave.
A period of annual leave longer than the minimum period laid down may be defined by collective agreement, agreement between the works council and the employer, working regulations or employment contract.
During the calendar year, the employee is entitled to be free from work with remuneration (paid leave) for important personal circumstances, and in particular for those related to marriage, childbirth, serious illness or death of an immediate family member.
Unless otherwise provided for by collective agreement, working regulations or employment contract, the employee is entitled to paid leave for seven working days a year in total.
The employee is entitled to paid leave during education, vocational or professional training or during education for the purposes of engaging in the works council or trade union work.
In the case of temporary incapacity for work, an employee is entitled to a salary of 100% or 70%, depending on the reason for temporary incapacity to work.
The employee who is a voluntary blood donor is entitled to one day off work per appointment.
8. Is it possible to include a non-competition clause in the employment contract, and what are the grounds for concluding a valid non-competition agreement?
Yes, it is possible – there are statutory and contractual prohibitions of competition.
Statutory prohibition of competition generally forbids an employee to conclude business transactions, for his own account or for the account of others, in the field of activity of his or her employer without the approval of his or her employer.
The employer and the employee may stipulate that, for a certain time after the termination of the labour contract, the employee must not enter into employment with another person who is competing on the market with the employer and that the employee must not conclude business transactions that constitute competition with the employer, neither for his own account nor for the account of others (contractual prohibition of competition).
A valid non-competition agreement must not be concluded for a period longer than two years after the date of the termination of employment, must be concluded in written form and may be an integral part of the labour contract.
9. Is the employer obliged to pay compensation for the period of validity of a non-competition clause/agreement after the termination of employment?
The employer undertakes a contractual obligation to pay compensation to the employee for the duration of the prohibition, amounting to at least half of the average salary paid to the employee in the period of three months prior to the termination of the labour contract.
10. What happens to employees if their employer goes bankrupt in Croatia, and are they entitled to severance pay?
In the case of an employer’s bankruptcy, the employee is entitled to a remuneration of up to the minimum salary for a period of not more than three months, together with compensation for unused vacation, severance pay up to half of the highest amount of statutory severance pay and statutory benefits damage due to work-related or occupational illness suffered up to one third of the ultimate compensation.
11. Are there any courts specially appointed for the purpose of dealing with labour law matters in Croatia?
In Croatia the municipal courts have jurisdiction for labour disputes. However there is one specifically appointed court for the purpose of dealing with labour law only in Zagreb: The Municipal Labour Court in Zagreb.
For decision on appeals against decisions of all municipal courts in labour disputes there are four courts out of the fifteen County Courts which are appointed to dealing with labour law.
12. In the event that an employee is a debtor in enforcement proceedings in Croatia, to what extent is it possible for a bailiff to seize remuneration?
This is dependent on the amount of salary the employee earns. Generally two-thirds of the average net salary in Croatia cannot be seized. However if a person earns less than the average net salary only one quarter of his or her salary can be seized.