engleski

Segmentation of the Labour Market and the Protection of Employee Rights in Croatia

The paper analyses the institutions that define employment contracts (laws, collective bargaining, and individual contracts), and the corresponding levels of protection of employee rights. The level of flexibility of industrial relations is neither economically nor socio-politically neutral. Although laws and contracts are both legally enforceable, they differ in their levels of generality, design processes, flexibility they offer to employers and employees, and in implications for different groups of employees. More general instruments (laws and collective bargaining) predominantly define the position of relatively vulnerable groups of employees. The better positioned categories of employees display stronger tendencies towards individual contracting. All these institutions require an effective legal system offering not only sufficient legal provisions, but also prompt resolution of labour disputes and sanctioning of rights violations. These institutions are discussed in relation to the Croatian labour market. Hereby the analysis of legal provisions is combined with analysis of the available data on (un)employment, wages, unionisation and labour disputes. Despite all-encompassing applicability of the relevant laws, Croatian labour market is in practice segmented. Employees in different sectors tend to experience substantial differences in protection of their legal and contractual rights. Due to the institutional insufficiency of the judicial system, segmentation largely results from the patterns of unionisation and the outcomes of collective bargaining. Employees of highly unionised public sector and state-owned enterprises, or some larger companies, tend to enjoy job security, above-average wages, and good working conditions. In the cases of various state-owned companies, such conditions hindered the necessary restructuring, and fuelled similar wage claims within the public sector. On the other hand, there are workers in the SME sector and some larger privately-owned companies, whose legal rights are generally poorly protected, and where unionisation is ineffective or even discouraged by employers. We discuss the effects of such segmentation on the labour market, particularly focusing on the current reforms aimed at increasing the levels of flexibility of industrial relations, and, finally, offer some policy recommendations.

institutions; labour market; employee rights protection; Croatia

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