On 1 November 2024, the Decision on the Expanded Application of the Collective Agreement for the Trade Sector (Official Gazette, No. 126/2024) came into effect. The extension of the Collective Agreement for the Trade Sector (Official Gazette, No. 117/2024, hereinafter referred to as the “Collective Agreement”) means that its provisions apply not only to members of the Croatian Employers’ Association – Trade Association (hereinafter: CEA – TA) and those employers who subsequently join CEA – TA but also to employers classified under the National Classification of Activities in sector G – wholesale and retail trade, repair of motor vehicles and motorcycles (with a few exceptions), as their predominant area of activity. The aim of the Collective Agreement is to standardize working conditions and employee rights and ensure universal employee protection within the trade sector across Croatia, regardless of the employer’s size or their status in the economic system. Below, we present the most significant innovations introduced by the Collective Agreement.
Minimum Salaries Based on Job Complexity
The Collective Agreement classifies jobs into four levels of complexity, corresponding to four pay grades, with minimum gross salaries ranging from €840.00 to €1,500.00, or from €840.00 to €965.00 for micro-employers if classification into four complexity levels is impractical due to a small number of employees. Employers are required to define the complexity level of a job position in the employment contract.
The Collective Agreement allows salaries to be paid in two instalments per month. The first instalment must not be less than 50% of the employee’s corresponding monthly gross base salary and must be paid no later than the last day of the month for which the payment is due. The second instalment must be paid by the 15th day of the following month at the latest.
Salary Supplements
An increase in the base (contracted) salary is provided for work on Sundays (50%), holidays and non-working days established by law (50%), night work (30%), overtime (40%), and specific conditions such as split shifts with a break longer than one hour (15%) and second shift work continuously exceeding eight days, starting from the ninth day (10%).
If a performance bonus is to be paid, the employee must be informed in advance of the criteria and measures for evaluating work results and the payment of the bonus. An employee working in a position with more demanding working conditions, as determined by workplace regulations or the collective agreement, is entitled to a 10% salary increase.
Employee Material Rights
The Collective Agreement provides for the payment of at least €135.00 as holiday bonuses (Christmas bonus, vacation allowance, etc.) and the employee’s right to a gift in kind worth €55.00 annually. Employees working part-time or in additional employment are entitled to these bonuses in proportion to their work hours.
The Collective Agreement establishes the right to reimbursement of actual transportation costs, per diem allowances for official business travel at a minimum of 75% of the tax-free amount specified by the Income Tax Act, an allowance for living away from home amounting to €280.00, and compensation of at least €0.30 per kilometre if the use of a private vehicle for official travel is approved. It also stipulates the right to jubilee awards for uninterrupted service of at least ten years and severance pay for retirees ranging from €200.00 to €1,400.00.
Social Rights and Support
The Collective Agreement guarantees employees financial assistance for various situations, including death, disability, or prolonged illness. For example, in the event of an employee’s death at the workplace, the employer is obligated to provide financial assistance to the children of the deceased employee until they complete regular secondary education, provided no compensation has been paid to the family under an insurance policy.
Rest periods and Leave Rights
The Collective Agreement provides more favourable arrangements for rest periods, regulating the conditions for entitlement to proportional rest and additional rest, which are not stipulated by the Labor Act. For seasonal employees, the duration of the daily rest period to which they are entitled is increased to ten hours, with the timeframe for its provision defined as eight days. Annual leave is also more favourably regulated for employees, explicitly granting additional days of annual leave proportional to the employee’s years of service.
Unlike the Labor Act, which only provides examples, the Collective Agreement explicitly prescribes the number of days of paid leave employees are entitled to in specific situations (e.g., marriage, childbirth, serious illness, or the death of a close family member). Regarding unpaid leave, the Collective Agreement limits its duration to a maximum of 30 days.
Interpretation of the Collective Agreement
The Collective Agreement mandates the formation of a joint body for its interpretation and monitoring of its application. This joint body comprises six members: three employer representatives and three union representatives. Both employers and employees may approach either party for the interpretation of the provisions of the Collective Agreement.
Martina Višnjić, Klara Mrčela
