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 127, 128 (2)
According to article 127, a collective dismissal must prompt the employer to begin consultations with the works council in a timely fashion and in the manner prescribed by the labour act, with a view to reaching an agreement aimed at avoiding redundancies or reducing the number of affected workers.
The mentioned redundancies concern those employees whose employment contract is to be terminated due to business reasons and where there is an agreement between the employer and the employee, as proposed by the employer. The employer is obliged to provide the works council a written notification with all relevant information (see Selection of employees for (collective) dismissals).
During the consultations with the works council, the employer is obliged to consider ways and means of avoiding the projected collective redundancies. The employer is also obliged to notify the public employment service of the mentioned consultations and provide information on the duration of consultations with the works council, outcomes and conclusions resulting therefrom, with a statement of the works council attached thereto, should he/she receive it.
Article 128 (2) stipulates that for employees who are proclaimed as surplus, the employment relationship may not be terminated within 30 days from the date of delivery of the information to the competent public employment service (PES). The PES may instruct in written form the employer to postpone dismissal to all or individual workers for a period of a maximum 30 days, if the company can ensure continuation of the workers' employment for the extended period.
The employer can start with the preparation of the cancellation of employment relations, but cannot implement this decision before the expiry of the mentioned deadlines. Furthermore, in some circumstances the local government may informally seek to put pressure on employers and lobby the central government to find alternative ways to keep the employees in jobs as long as possible.
Rozman (2023) elucidates that according to Labor Act (OG 93/14, 127/17, 151/22, 64/23), Article 127, paragraph 1, an employer with whom, within a period of ninety days, the need for the work of at least twenty workers could cease to exist, of which the business-conditioned notice would terminate the employment contracts of at least five workers, is obliged to consult the works council in a timely manner and in the manner prescribed by this Act. in order to reach an agreement for the purpose of eliminating or reducing the need for the termination of the work of workers. Mentioned redundancy includes workers whose employment relationship will be terminated by the business-conditioned notice and the agreement between the employer and the worker at the proposal of the employer. Paragraph 3 determines that in order to implement the obligation of mentioned consulting, the employer is obliged to provide the works council with appropriate information in written form on the reasons why the need for workers' work could cease, the number of total employed workers, the number, occupation and jobs of workers for whose work the need could cease, the criteria for the selection of such workers, the amount and manner of calculation of severance pay and other benefits to workers and the measures taken by the employer to take care of redundant workers. Paragraph 4 stipulates that during the consult procedure with the works council, the employer shall consider and explain all possibilities and proposals that could eliminate the intentional termination of the need for workers' work. According to paragraph 5, the employer shall inform the competent public employment service of the conducted consult and submit to it the needed data.
Article 128, paragraph 12, defines that the competent public employment service may, no later than the last day of the 30 days period, order the employer in written form to postpone the implementation of the dismissal of all or particular workers determined by redundancy for a maximum of thirty days, if during the extended period he or she can ensure the continuation of the worker's employment relationship.
Eurofound (2015), Croatia: Obligation to consider alternatives to collective dismissals, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/obligation-to-consider-alternatives-to-collective-dismissals/croatia
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