Majority of Newly-Employed Work on Fixed-Term Contracts

Total Croatia News

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ZAGREB, January 27, 2019 – Statistics provided by the Croatian Pension Insurance Fund (HZMO) show that a quarter of Croatian employees have fixed-term contracts, while the lion’s share of the newly employed, that is 90% of them, are temporary workers, which is why unionists warn that the government-sponsored measures to boost employment are inefficient.

In November 2018, a total of 387,633 Croatians worked on fixed-time contract basis, making up 25% of all employed persons, and the portion of temporary employees ranged between 22% and 26% over the past three years.

The leader of the SSSH trade union, Mladen Novosel, has told Hina that precarious employment and low wages are the most important reasons for the emigration of Croatians from their homeland.

In the European Union, the average share of fixed-term workers in 2016 stood at 14.22% as against 22.6% in Croatia.

Novosel warns that the government’s measures designed to increase employment, which cost 4.5 billion kuna in the past two years, are actually inefficient.

The Labour Ministry has recently stated that an additional two billion kuna has been set aside in 2019 for employment incentives. The ministry also notes that the ratio between fixed-term and permanent employment contracts has been steady for years. It underscores that under the contribution legislation, the authorities offer fiscal relief for employment of people under 30 on a permanent basis.

There are two types of fiscal incentives for employers: the first refers to exemption from paying contributions on the pay base in the first year of employment of newly-employed persons, and the other is about exemption from payment of contributions for the first five years of employment of a young permanent worker.

As a result, the number of young employees with permanent contracts rose to 45,277 in 2018 from 11,953 in 2015, the ministry says.

The SSSH insists that statistics on the number of employees alone do not mirror the real state of affairs on the labour market.

Seasonal employment in tourism is one thing and the fact that as many as 90% of the newly employed have fixed-term contracts is quite another, Novosel says.

Croatia is the champion in the European Union in terms of employment contracts for a three-month period, says the unionist. According to the figures provided by Eurostat, in 2016, 2.3% of employees in the EU had a precarious job, meaning that the work contract did not exceed three months duration, while in Croatia it stood at 8.4%.

“The share of precarious employment has remained relatively stable over the last 10 years, varying between 2.0% (in 2009) and 2.3%. Precarious work contracts are most common in agriculture, forestry and fisheries affecting 8.1% of the employees in the sector,” Eurostat reported in 2018.

Among the EU member states, the share of precarious employment was highest in Croatia (8.4%), followed at a distance by France (4.8%), Spain (4.7%), and Poland and Slovenia (both 4.5%). Short work contracts were less common in Romania (0.2%), the United Kingdom and the Czech Republic (both 0.4%), as well as in Germany (0.5%).

The Croatian Employers’ Association (HUP) says that the share of precarious contracts is due to seasonal needs, for instance in tourism and construction industries. Furthermore, the generally high share of temporary employment contracts is a consequence of unstable business climate, HUP says.

More news on the employment situation in Croatia can be found in the Business section.


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