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.
Articles 137 (4, 5, 6), 229 (1.49)
In the case of business transfer
Previous employers are obliged to inform new employers in writing, fully and accurately, about the rights of employees whose employment contracts are being transferred. In case of failure to comply, the previous employer is charged with fines ranging from €8,090 to €13,270 for employers who are legal persons and €920 to €1,320 for employers who are natural persons (article 229, 1, 2). Where the mentioned offence is committed in respect of a minor worker (younger than 18 years), the fine shall be double the amount prescribed (article 229, 2,15). According to article 226, referring to the article 137 (6,7), the previous employer is obliged to notify in writing, timely and prior to the date of transfer, the works council and all employees affected by the transfer about the transfer to a new employer. The referred notification must contain information on: • date of transfer of the employment contracts; • reasons for the transfer of the employment contracts; • legal, economic and social implications of the transfer for the employees; • any measures envisaged in relation to the employees whose employment contracts are being transferred. During labour inspections, an inspector verbally informs the employer about his or her decision and instructs the latter to perform, within the time limit determined by the inspector, the activities of consultation with the works council on important matters regarding employees' social and business conditions.
Consequences of minor offences by employers
A fine ranging from €1,320 to €3,980 is imposed on the employer (legal person) for concluding an employment contract in which the duration of the probationary period or the duration of the traineeship is longer than permitted by law (article 53, 3). If the employer is a natural person, the responsible staff member who holds the legal responsibility shall be fined for an amount ranging from €530 to €790. Where the referred offence is committed against an underage employee, the amount of the fine is doubled.
Consequences of serious offences by employers
An employer is charged from €8,090 to €13,270 if among others: 1. He or she does not keep records of workers and working hours or does not keep them in the prescribed manner, or if he does not submit data on workers and working hours at the request of the labor inspector (Article 5) 2. He or she temporarily assigns his or her employee to a company that is not related to him or her in terms of the special regulation on commercial companies, or assigns him or her for a duration longer than a continuous six months, or assigns him or her without an agreement and written consent of the employee to the agreement (Article 10, paragraph 3) 3. In the case when the employment contract is not concluded in writing, before starting work, he or she does not issue a written confirmation of the concluded contract to the worker (Article 14, paragraph 3) 4. He or she does not provide the employee with a copy of the employment contract and a copy of the mandatory pension and health insurance application within the prescribed time limits (Article 14, paragraph 5) 5. He or she concludes a work contract at a separate workplace for tasks for which he or she may not conclude it (Article 17, paragraph 4) 6. He or she directs his or her employee, who, within the framework of temporary and occasional cross-border provision of services, to work abroad in a company related to him or her in the sense of a special regulation on commercial companies without the written consent of the employee (Article 18, paragraph 5) 7. Does not submit to the worker a copy of the application for mandatory health insurance during the period of work abroad to the worker before going abroad, if he or she is required to provide this insurance according to a special regulation (Article 18, paragraph 7) 8. A contract on additional work is concluded with a worker who works on jobs with special working conditions in accordance with the regulations on occupational health and safety, a worker who works in reduced working hours according to Article 64 of this Act, and a worker who, according to the special regulation on pension insurance, account insurance for an increased duration (Article 18.a paragraph 2.) 9. He or she concludes a contract with the employee on additional work with contracted working hours for a duration longer than prescribed (Article 18.b paragraph 4.) 10. The work of a worker who performs additional work, and the working time schedule is not determined as unequal, lasts longer than eight hours per week, including overtime, or if the work of a worker who performs additional work in an unequally determined working time schedule lasts longer than 16 hours per week , including overtime work (Article 18.b paragraph 5.) 11. In a period of four consecutive months, or six months, if this is agreed in a collective agreement, it determines the work of the worker in additional work that would last longer than the average eight hours per week, including overtime (Article 18.b paragraph 7.) 12. He or she determines an unequal work schedule of the worker in additional work without his written consent on voluntary consent to work longer than eight hours per week or if, at the request of the labor inspector, he or she does not submit a list of workers who have given a written statement on voluntary consent to such work (Article 18. b paragraphs 10 and 12) 13. He or she employs a person younger than 15 or a person aged 15 and older than 15 and younger than 18 who attends compulsory elementary education or if he allows the work of children and minors who attend compulsory elementary education (Article 19 and Article 19.a paragraph 3.) 14. In jobs related to work and carrying out activities with children and minors, he employs a person who has been legally convicted of one of the criminal offenses against sexual freedom, sexual abuse and exploitation of a child, which before they were committed, were prescribed by law or international by law, or criminal proceedings are being conducted against her for the aforementioned offenses, or she does not prevent contact with a child or a minor to a person for whom she has knowledge that there is an obstacle (Article 19.b paragraphs 1 and 3) 15. if he employs a minor without the written authorization of his legal representative or the approval of the authority responsible for social welfare affairs (Article 20, paragraphs 1 and 2) 16. He or she employs a minor in jobs that may endanger his safety, health, moral order or development, or if he employs him before the prior determination of his medical capacity (Article 21, paragraphs 1 and 3) 17. He or she refuses to employ a woman due to pregnancy or, contrary to the provisions of this Act, because of pregnancy, birth or breastfeeding of a child, in the sense of a special regulation, offers her an amended employment contract under less favorable conditions (Article 30, paragraph 1) 18. During pregnancy, use of maternity, parental, adoptive and paternity leave or leave which in terms of content and method of use is identical to the right to paternity leave, work half-time full-time, work half-time full-time for increased child care, leave pregnant workers, leave of a worker who has given birth or a worker who is breastfeeding a child and leave or work half-time for the care and nursing of a child with severe developmental disabilities in accordance with a special regulation, i.e. within 15 days from the day the pregnancy ends or use of these rights, cancels the employment contract of a pregnant woman or a worker who uses some of these rights (Article 34, paragraph 1) 19. To a worker who is temporarily unable to work due to an injury at work or an occupational disease, due to treatment or recovery, cancels the employment contract … 47. The dismissal is not in writing, is not explained or if it is not delivered to the employee (Article 120) 48. The employment certificate, in addition to information on the type of work and the duration of the employment relationship, indicates something that would make it difficult for the worker to enter into a new employment contract (Article 130, paragraph 3) 49. In the case of transferring an employment contract to a new employer, he does not fully and truthfully, in writing, inform the new employer about the rights of workers whose employment contracts are being transferred (Article 137, paragraph 4).
Although fines are prescribed in detail, the procedure for employees to report to competent labor inspection authorities is not touched upon in the law, making the control mechanisms for these measures weak. In addition, there are no objective criteria on the choice of the appropriate amount of fines within the range provided (lowest, middle, highest). According to the report by the labor inspectorate for 2018, around 110 in 2,756 cases (4%) of violations of provisions involved employers that did not provide a notice of dismissal in writing, failed to explain the grounds for dismissal or failed to hand over the notice of dismissal to the employee. The report by the labor inspectorate for 2019 is not anymore publicly available, but according to the unofficial information from the inspectorate, the situation regarding the number of cases did not change in 2019. The structure of violations is not particularly specified in the Report by the Inspectorate for 2021 (Izvještaj Inspekcije za 2021), but it looks like there were no significant changes.
The purpose of the transfer of the employment contract is to preserve the continuity of the worker's employment relationship so that he or she retains all acquired rights as if he had continuously worked for the new employer. In order for employment contracts to be transferred to a new employer, the conditions prescribed by the Labor Act must be met, and in that case the transfer of a part of the company to a new employer does not constitute a justified reason for the termination of the employment contract. Therefore, the admissibility of the termination can be challenged in court. A workers’ employment contract that is not related to the performance of an economic activity or part of an economic activity that is transferred to a new employer cannot be transferred to a new employer (Gović Penić, 2019).
Eurofound (2015), Croatia: Effects of non-compliance with dismissal regulations, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/effects-of-non-compliance-with-dismissal-regulations/croatia
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