Spotlight interviewed: Davor Juric, president of the UATUC (Union of Autonomous Trade Unions of Croatia)

ICFTU OnLine..., 4 February 2003

Brussels, 4 February 2003 (ICFTU OnLine): Croatian unions are especially worried about the government's plans to change Labour Law, and threaten to organize general strike. ICFTU interviewed Davor Juric, president of the UATUC (Union of Autonomous Trade Unions of Croatia).

1- What does the Croatian Government want to change in the Labour Law?

With the new Labour Law the Government intends to completely flexibilise Croatian labour market. Alleged goals are: increasing competitiveness in economy and ensuring job creation. Institutes which are arguable in proposed amendments are: shortened dismissal notice periods from maximum 6 months to 3 months, reducing the right to severance pays in case a worker is being dismissed, and developing redundancy programs.

Trade unions are especially worried about the Government's intention to equalize fixed-term employment contracts with full-term ones. According to the Government's proposal, employer is not obliged to provide real grounds for the conclusion of fixed-term contracts. Therefore, fixed-term contract would not be an exception but rather depend on employer's decision.

New definition of small-sized employer is: an employer who employs 20 or less than 20 workers. The problem arises in case where there is a surplus of workers and the employer does not have an obligation to offer another job (even if there is such a possibility) nor does he has to pay attention to workers’ age, years of employment or social status. Such definition will expose 241.000 workers to additional social insecurity.

Severance pays are going to be considerably reduced. The first condition for the realisation of the right to severance pay, and that is the conclusion of full-term contract, is being erased. Today a worker who was continuously working for the same employer has the right to severance pay equal to 10 net monthly wages. The same worker would now have the right to 3 gross wages. Differences, depending on years of employment, are high as 69,34 % according to our simulations. That is unacceptable. Shorter notice period and severance pay for a worker who was working with the same employer 15-20 years decreases the amount of payment that the employer is obliged to pay him/her for 66,67%.

There are several other institutes, which the Government intends to change ranging from its intention to determine the amount of minimum wage to flexibilization of procedure related to redundancy programs—procedure will be, naturally, more favourable for employers.

2- What will be the consequences for Croatian workers?

Trade unions think that such Government's proposals, and employers' association agree to those, will not bring about any of the proclaimed objectives. Competitiveness of economy depends on numerous elements and flexible labour market is not placed at the very top of such an agenda. We have many arguments for proving that to be true. After all, macroeconomic indicators in Croatia show that there are positive trends in the past three years and that alleged rigid labour legislation does not impose such a big obstacle to economy development and that it something that many successful businessmen often state as well.

As a consequence, such amendments would mainly result in severely disrupted social security. Social differences will only become more obvious. Older workers will very easily loose their jobs and it will be even harder for them to find a new one.

3- How do the unions intend to stop the Bill?

Present form of proposed amendments to the Labour Law united the five representative Croatian trade union confederations and several independent branch federations. We have reached an agreement on many different activities in whole Croatia. We are also going to organize ‘All-Trade Union Assembly', planned for 13 February and adopt the declaration stating that the year 2003 is the year dedicated to fighting for workers' dignity.

On the same occasion our membership will decide, by means of referendum, on organizing general strike in Croatia and the possible referendum of all Croatian citizens according to the Referendum Act. Of course, we plan whole range of other activities ranging from continuation of social dialogue and negotiations to meetings with Members of Parliament and meetings with the World Bank representatives.

4- What do you think about the need to ‘harmonise’ the Labour Law with other candidate countries, as the Croatian Government says? Isn't there another reason?

Trade unions are not against the harmonisation of the Labour Law with the European standards but rather against the harmonisation with laws in some of the candidate countries. The reason for such a restrictive intention to reduce workers' but also trade union rights can be related to recent negotiations with international finance institutions.

In 2001, in the framework of World Bank's ‘SAL Credit’ for the structural adjustment, it was agreed to start with changes of the Labour Law, in other words, flexibilisation of labour market. Trade unions did not know anything about it, nor did the Government felt obliged to inform us about any of the agreements signed. The latest information we have says that the WB, apart from amendments to the Labour Law, also demands a solution for workers' social protection. In Croatia this issue is not active yet.

The stand-by arrangement with the IMF has not been signed yet. The Government claims that we need it in order to retain credit rating and that this is the last stand-by arrangement to be signed. They also claim that they will not retrieve any of resources resulting from the arrangement (app. 140 million USD). The IMF conditions its arrangement with putting amendments to the Labour Law into parliamentary procedure, which the Government, despite of unsolved issues with trade unions, decided to do anyway.