All questions

Discontinuing employment

i Dismissal

The EA envisages in Article 115 that the employer is allowed to terminate employment contracts for legitimate reasons by giving statutory notice or notice stated in the employment contract (i.e., regular dismissal), if:

  1. the need to perform certain work ceases for economic, technological or organisational reasons (i.e., dismissal on business grounds);
  2. employees are not able to fulfil their employment obligations as a result of their permanent characteristics or capacities (i.e., dismissal on personal grounds);
  3. employees violate their employment obligations (i.e., dismissal because of misconduct); or
  4. employees did not satisfy their probationary period.

When making a decision about a dismissal on business grounds, an employer that employs 20 or more employees has to take into account an employee's tenure, age and maintenance.

Also, an employer who has dismissed an employee for business reasons shall not employ another employee in the same post for six months following the date of giving notice of dismissal. Should a need for employment for the same work arise within that period, an employer is obliged to offer an employment contract to the employee that it dismissed for business reasons.

A fixed-term employment contract is terminated upon its expiry (Article 112.1.2 of the EA). It may be terminated by means of regular notice only if this option is provided for by the contract (Article 118 of the EA).

Pursuant to Article 116 of the EA, an employer has just cause to terminate employment without a notice period (i.e., extraordinary dismissal) in cases where continuation of employment is regarded as impossible as a result of a severe breach of employment obligations or any other fact of critical importance, and recognising all the circumstances or interests of both contracting parties, but solely within 15 days of the date when the employer gained knowledge of the fact constituting grounds for extraordinary dismissal.

Prior to regular dismissal because of an employee's misconduct, an employer is obliged to alert the employee in writing of his or her employment obligations indicating possible dismissal should the breach of obligations persist, and prior to regular or extraordinary dismissal because of the employee's misconduct, the employer is obliged to give the employee the opportunity to present his or her defence (Article 119 of the EA).

The notice of dismissal has to explain in writing the reasons for dismissal (Article 120 of the EA).

By virtue of Article 121 of the EA, a notice period begins on the date of notice of dismissal. However, the notice period is suspended during:

  1. pregnancy;
  2. maternity;
  3. parental or adoption leave;
  4. half-time work;
  5. part-time work because of intensive childcare;
  6. leave of a pregnant or breastfeeding employee;
  7. leave or part-time work to take care of a child with severe developmental disabilities;
  8. treatment or recovery from injury at work or an occupational disease; and
  9. service in national defence forces.

In case of suspension of the notice period as a result of temporary incapacity for work, employment shall be terminated, at the latest, six months after the date of notice of dismissal.

Unless otherwise provided for by collective agreement, working regulations or employment contract, the notice period is not suspended during annual and paid leave, and the period of temporary incapacity for work of the employee who is released from obligation to work during the notice period.

According to Article 122 of the EA, a notice period depends on the length of tenure with the same employer. It is a minimum of two weeks (for less than one year) and a maximum of three months (for 20 years). In case of an employee who has continuously worked for the same employer for 20 years, the notice period is extended by two weeks if the employee has reached 50 years of age, and by one month if the employee has reached 55 years of age. In case of dismissal because of an employee's misconduct, the notice period is halved. The employer is obliged to pay compensation and recognise all other rights to the employee released from the obligation to work during the notice period, as if the employee had worked until the expiry of the notice period.

An employer may not dismiss employees during their pregnancy, maternity, parental or adoption leave, periods of part-time work, periods of short-time work resulting from intense childcare, leave of pregnant women or a breastfeeding mother, and periods of leave or short-time work as a result of caring for a child with serious developmental disabilities, and within 15 days of the end of pregnancy or the end of use of such entitlements (Article 34 of the EA), as well as employees who have suffered from injury at work or occupational disease during temporary incapacity for work resulting from medical treatment or recovery (Article 38 of the EA).

Article 126 of the EA prescribes that when an employer dismisses an employee following two years of tenure, unless dismissal is given as a result of an employee's misconduct, the employee is entitled to severance pay for each year of tenure with the employer. It may not be lower than one-third of the average monthly salary earned by the employee in the period of three months prior to dismissal and, unless otherwise provided for by the law, collective agreement, working regulations or employment contract, it may not exceed six average monthly salaries earned by the employee during three months prior to dismissal.

Finally, an employment contract may be terminated by a written agreement between the employee and employer (Articles 112 and 113 of the EA).

ii Collective redundancies

According to Article 127 of the EA, an employer that may have at least 20 redundancies, out of which at least five employment contracts would be terminated on economic grounds, over 90 days, is obliged to begin consultations with the works council in order to avoid or reduce the number of redundancies and supply the works council with all the relevant information in writing.

The employer also has to notify the Croatian Employment Service (CES) of the consultations. Projected collective redundancies notified to the CES may take effect no earlier than 30 days after the notification; however, the CES may, until the last day of the respective time limit, request that either collective or individual redundancies are postponed for a maximum of 30 days, if the employer is able to ensure the continuation of employment for employees during this extended period (Article 128 of the EA).