Living and working in Croatia

Consumer prices in Croatia increased by 4.5% in December 2023, while inflation for the entire year was 8.0%. Compared with December 2022, the prices of restaurant and hotel services on average increased the most (by 12.4%). Labour market trends in 2023 were very positive, with a further decrease in unemployment of around 2.4% compared with 2022.

The government’s job-preserving policy, by keeping a stable labour market, and various other measures that have enabled further growth in the average wage, contributed to the economic recovery and a relatively large increase in personal consumption.

There were no significant changes in collective bargaining structures and frameworks. There is no comprehensive database, and no reliable sources on trade union membership and collective agreements exist. A new sectoral collective agreement for the wood and paper industry was signed. This is the third collective agreement signed at sector level (other two are in construction and tourism), and it may contribute to the development of collective bargaining at this level. It guarantees joint action in order to protect the industry and improve working conditions, preserve jobs and raise the competitiveness of the entire sector. The Economic-Social Council in 2023 had nine meetings and discussed various economic and political issues.

All three trade union federations demanded that the actual value of pay be adjusted in accordance with inflation, but this is difficult to achieve since strained budgets in the public sector limit employers’ options, and higher production costs in the private sector make it difficult to meet such demands. Employers argue that aligning pay with inflation is not possible without a significant increase in productivity.

The social partners participated in the process of developing amendments to the Labour Act (OG 151/22). These amendments include provisions to regulate working from home and to address fixed-term term employment contracts. Regarding the latter, with certain exceptions, both the duration (a maximum of three years) and the number (a maximum of three consecutive contracts) of fixed-term employment contracts are now limited, which was not the case previously. New provisions on probationary periods resolve the situation where an employee needs to be absent from work during the probationary period due to reasons such as sick leave, maternity leave or parental leave.

The Act on Elimination of Unregistered Work entered into force on 1 January 2023 and sets out the rules aimed at combating non-payment of salaries, salary add-ons and contributions as well as hidden or unregistered employment.

Accumulating problems in the judiciary culminated in an almost two-month strike by court officials and state employees that began on 5 June with a request to increase the salaries of judicial officials.