European Restructuring Monitor (ERM)
Eurofound's ERM database on restructuring-related legal regulations provides information on regulations in the Member States of the European Union and Norway which are explicitly or implicitly linked to anticipating and managing change.
Article 120, 127, 140
Collective redundancies occur when the employer dismisses at least 20 employees (within 90 days), out of whom at least five employees are to be dismissed due to business reasons. The remainder can be dismissed on various other grounds.
This definition is applicable to companies employing at least 20 employees, which means that companies employing fewer than 20 employees can dismiss all of them for various reasons within 90 days. The threshold is the same for the constitution of a works council in the company, pursuant to article 140. In general, an employer can terminate employment contracts within the legally prescribed termination period if they can justify the reasons to do so. Justifiable reasons include not being able to assign an alternative job to employees within the same company or provide training to employees for another job within the same company.
The Labor Act in Articles 127 and 128 specifies employer’s mandatory consultation with the works council in order to reach an agreement how to eliminate or reduce the need for workers. The employer has to notify the Croatian Employment Service and provide it with information on the duration of the consultation with the works council, the results and the conclusions of the conducted consultation. The employers has to attach a written declaration of the works council, if it has been delivered to him or her. The works council can send its remarks and proposals to the Croatian Employment Service and to the employer on the notification provided.
In the current Labor Law, the legal institution of collective dismissal has been significantly changed compared to the previous Labor Law (OG 149/09, 61/11, 73/13) in such a way that the entire procedure is simplified and accelerated. The employer's obligation to draw up a redundancy program has been abolished, and the duration of the collective redundancy procedure has been reduced in such a way that the 30-day period in which the employer is not allowed to cancel the employee's employment contract is not counted from the delivery of the redundancy program (because such the program does not even have to be prepared anymore) to the Croatian Employment Service. However such period is counted from the date of delivery of the notification to the Croatian Employment Service about the end of the need for the workers.
Even after such a change, this institute remained in line with the Collective Redundancies Directive 98/59/EC of 20 July 1998, on the harmonization of the legal regulations of the Member States on the collective dismissal of redundant workers. The mentioned Directive is focused on the participation of workers' representatives in the entire procedure of collective dismissal in all its phases and enabling the application of active employment measures to reduce or prevent the adverse consequences of the cancellation of the employment contract. However, the procedure in Croatia has been simplified for employers, because they no longer have to create a program for taking care of redundant workers, which was usually extremely complex and required a lot of time and caused problems. Furthermore, the results in terms of actually solving workers' problems, such as new employment elsewhere, were negligible.
The provisions in the Croatian law do not explicitly address whether business-related dismissal cover situation in which an employer accept changes in geographical assignment resulting in the termination of the contract. The CJEU (Case C-249/24, Ineo Infracom, 11 July 2024) case clarifies these cases, any termination of the employment relationship that is not initiated by the worker, including cases where the worker refuses a unilateral and substantial modification of an essential element of the employment contract (such as a change of workplace), must be treated as a “redundancy” or as a termination to be included in the calculation of collective redundancies.
Eurofound (2015), Croatia: Definition of collective dismissal, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/definition-of-collective-dismissal/croatia
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