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01 February 2014

Croatia: Freedom of Movement of Workers after Croatia's Accession to the EU

Free movement of workers is one of four economic freedoms of EU citizens. Although in principle as of 1 July 2013 Croatian workers are entitled to move freely and stay in other member states for work, limitations imposed by certain member states exist.

Advantages for workers due to Croatia’s accession to the EU

Free movement of workers is one of four economic freedoms representing the basis of the EU common market, reflected in free stay, work, and movement of EU citizens on the territory of the EU, irrespective of their nationality. In practice, such free movement refers to a worker, but also secondarily to members of his/her family and persons studying in member states other than the country of their origin.

As of 1 July 2013 this freedom means Croatian citizens may (i) accept employment offers in other member states, (ii) move freely within the territory of member states for this purpose, (iii) stay in a member state for the purpose of employment in accordance with the provisions governing the employment of nationals of the respective member state, and (iv) remain in the territory of the member state after having been employed there. As of Croatia’s accession to the EU, Croatian citizens may use the services of EURES, which offers information, advice, and job search assistance at the European level, and whose advisors are located in regional offices of the Croatian Employment Office (Hrvatski zavod za zapošljavanje) in Zagreb, Rijeka, Split and Osijek.

Exceptions to the free movement rule

No legal limitations exist for most workers and work places; however, free movement of workers is not absolute. It is limited by (i) public policy, public security, or public health rules, (ii) rules on employment of nationals of particular member state in state bodies (this limitation does not however apply for purely technical work positions), and (iii) so-called conditional rules in relation to certain regulated professions (eg, lawyers).

Irrespective of the above rule on free movement, a transitional period has developed that represents a general exception to it. Each member state, in accordance with its employment policies, chooses its own regime on employing Croatian citizens, and restrictions may last up to seven years based on the “2+3+2” formula. Great Britain, Germany, Austria, Italy, Benelux countries, France, Cyprus, Greece, Malta, Slovenia and Spain have implemented these limitations on employing Croatian citizens during the two years as of Croatia’s accession to the EU. Under the reciprocity principle, Croatia has done the same to their citizens. So Croatian workers will be employed in these member states based on bilateral agreements and work permit quotas, while the citizens of the respective member states will have their employment relationship regulated in line with the Croatian Aliens Act (Zakon o strancima).

Applicability of EU directives

By accession to the EU, applicable bilateral agreements on social security, entered into by Croatia and EU member states, EEA states and Switzerland, cease to exist. Croatia started to directly apply Council directives on harmonisation of social security systems, which changes influence the Croatian system, for example, as follows:

  1. Croatian citizens are entitled to use health protection in other member states based on the European Health Insurance Card, at the expense of the Croatian Health Insurance Institute;
  2. Croatian workers have a right, after having worked in a member state, to receive unemployment benefits in line with the laws of the member state of their last employment;
  3. Croatian citizens have right to receive a retirement pension in any member state in which they have been insured at least 12 months if they fulfil other conditions under the national laws of the member states.

Novelties in Croatian law

Frontier workers

After Croatia’s accession to the EU, a new category of insured persons who use cross-border health protection has become known: frontier workers or persons performing their work as employed or self-employed persons within one member state while having their residence in another member state and returning to the state of their residence daily or at least once a week. Such frontier workers are entitled to be insured in the member state of their employment.

Seconded workers

Specific rules apply for persons seconded to another state for performance of work within a period of time. For work in another member state, the seconded worker does not need to obtain a work permit, but must regulate his/her stay in line with applicable regulations. The law of the home member state is applicable to the seconded worker; thus, for the Croatian worker, the Croatian law.

As of 1 July 2013, a Croatian employer need not pay additional health insurance contributions abroad for Croatian workers seconded to another member state. This refers also to employees who have been seconded abroad under bilateral agreements before Croatia’s accession to the EU but the duration of which extends past 1 July 2013.

Also, as of 1 July 2013, Croatian insured persons need not pay additional health insurance contributions abroad in case of business trips, educational stays, work, or private business stays in other member states.

With Croatia's accession to the EU on 1 July 2013, the advantages of an open market unfolded, enabling Croatian citizens to freely move and search for employment in other member states. Although restrictions on Croatian workers have been implemented, they have still been granted an opportunity to achieve their professional goals.

author: Dina Vlahov Buhin

Vlahov Buhin*

Attorney at Law | Vlahov Buhin i Šourek d.o.o. in coop. with Schoenherr