“Members of the American Chamber of Commerce welcomed the Government's measures for economic relief due to the pandemic, which were announced in the spring of this year, as they were adopted promptly and did not burden companies administratively. Given that the measures, due to the current epidemiological situation, will be needed in the coming period, AmCham supports all Government activities aimed at continuing these measures and supporting the most affected sectors,” said Andrea Doko Jelušić, AmCham Executive Director, at a meeting with the Minister of Labor, Pension System, Family and Social Policy Josip Aladrović.

“The outflow of the labor force from Croatia, together with the difficulty of finding an appropriate profile of employees, will negatively affect the economic growth and weaken Croatia's competitiveness, along with the existing high tax burdens on labor. AmCham considers that favorable conditions have arisen for changes of not just the Labor Act, but also changes in how the entire labor market functions through a range of reforms which would contribute to a more functional system”, added Doko Jelušić, and presented AmCham’s Position Paper on the Necessary Changes to the Labor Act.

In the circumstances brought about by the COVID-19 pandemic, the need has arisen for a more flexible labor law framework that could help regulate employment in exceptional circumstances without special regulations or ad hoc measures being required.

It is exactly the situation in the past few months, where the only possible form of work was working from home, that demonstrated not only the willingness of employers and employees to operate in more flexible forms of work, but also the practical feasibility and benefit of such a form of work. Therefore, AmCham is committed to simplifying the regulations on working hour records for work from home, aligning legal terminology with current regulations in the area of occupational safety, and allowing the introduction of a paragraph on the tax-free fixed compensation of expenses which occur when an employee uses their own equipment. AmCham is also advocating for the introduction of a new institute in the Labor Act – Occasional work from home on the explicit request of the employee.

In the position paper a few proposals were also made for improving the system for determining salary and its definition, limiting the number of days for being temporarily unable to work at the expense of the employer, the impact of temporary inability to work on the notice period, expanded reason for regular termination, flexible working time and the possibility of setting up a flexible work time schedule, and the reallocation of working time.

Therefore, AmCham believes that, besides the proposals relating to the minimal improvement of the existing Labor Act, which were put forward in the position paper, it would be necessary to open a dialogue on more comprehensive changes to the labor law that would make it resistant to exceptional situations and at the same time suited to the requirements of modern times and the need for more flexible types of work.