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08 April 2020

Croatia: The impact of COVID-19 on employment from the employer's perspective

Given the situation caused by the coronavirus pandemic in Croatia, the National Civil Protection Committee (Stožer civilne zaštite) has put in place numerous restrictive measures to protect the lives of all citizens.

These have greatly affected the economy and the everyday lives of employers and employees alike. We have therefore prepared an overview of the measures recently introduced and implemented by the respective authorities and the Government of Croatia.

Possible measures to be taken by the employer

Home office, teleconferences, business trips

  • Employers are obliged to arrange home office, if possible with regard to the nature of the work and provided this possibility is set out in the employment contract and/or internal regulations or based on an ad hoc agreement with the employee
  • Cancel meetings or organise teleconferences and use other available technologies for distance meetings
  • Cancel business trips
  • Prohibit employees with fever or difficulties breathing (especially cough and shortness of breath) from coming to work

Unpaid leave, annual leave, working hours

  • Granting the decision on unpaid leave – at the employee's request only; in which case the rights and obligations from employment or related to the employment relationship will be suspended. Nonetheless, employers may choose to pay minimum social contributions for employees granted unpaid leave
  • Rendering a decision on determination of use of the annual leave (the employee must be notified thereof 15 days in advance)

Changes to employment conditions

  • Change of working hours
  • Uneven distribution of working hours (nejednaki raspored radnog vremena)
  • Redistribution of working hours (preraspodjela radnog vremena)
  • Amendment of full-time employment contracts to part-time employment contracts (with the consent of the employee)

Quarantine and self-isolation

  • In case of quarantine and self-isolation due to coronavirus, the employee will be entitled to salary compensation in line with the Act on Compulsory Health Insurance
  • The salary compensation will be paid from the Croatian Health Insurance Fund from the first day of quarantine or start of sick leave
  • Exceptionally, if the employee and the employer agree that the employee can work from home during the said period, the employee is entitled to their full salary
  • Inability to work in case of quarantine or self-isolation cannot be a justified reason for termination of the employment contract

Temporary suspension of the employer's business (prekid rada)

  • Employees will be entitled to receive compensation of their salary in the amount equal to the average monthly salary received in the previous three months
  • Employers (from eligible sectors) may file a request for financial support during the three-month period (for more information please see below)
  • The employer may determine the use of annual leave (depending on the duration of the COVID-19 pandemic and the necessity to keep the business suspended)
  • The employer may grant unpaid leave, at the employee's request only
  • The employer may terminate employment contracts due to business reasons, while complying with certain obligations under the Labour Act (e.g. provisions on the notice period and severance payment, consultation with the works council / union commissioner, ban on employing other employees in the position of the dismissed employee for six months, etc.)
  • The employer may extraordinarily terminate the employment contract (without notice period) due to other particularly important reasons, when considering all the circumstances and the interests of both parties the continued employment relationship is no longer possible

Measures imposed by the Ministry of Labour and Pension Insurance

  • The government offers financial support to eligible employers to retain jobs in sectors affected by the coronavirus for a maximum period of three months from the beginning of March, in the amount of up to HRK 3,250 for March and HRK 4,000 for April and May per employee per month. In addition, the government will cover public levies (income tax and social security contributions) on the financial support for April and May of approximately HRK 1,460
  • The government supports retention of employment for persons with disabilities by ensuring the employer payment of the disabled person's minimum wage
  • Delay of payment of financial compensation for all employers who do not meet the statutory quota for employment of persons with disabilities
  • Delay of payment of public levies for up to three months
  • Enabling the EU funding beneficiaries to suspend or delay project implementation, delay of repayment of funds, and to acknowledge the reduced implementation of planned project indicators due to objectively new circumstances

Vlahov Buhin*

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