Almost every employer is struck by the situation with the declared pandemic of the COVID-19 virus; whether the work is conducted from home, or the business is completely closed down by the decision of the competent authorities, or by the fact that workers are scared of the virus.

Considering that the Ministry of Labour and the Pension System gave its Opinion on Labour Relations for the duration of the COVID-19 epidemic on 13 March 2020, CLASS: 110-01/20-01/48, NUMBER: 524-030-0-/3-20-2, under which it is clearly stated that employers, despite the newly emerged extraordinary circumstances, are obliged to apply the institutes governing labour relations as prescribed under the Labour Act and the legal sources under which those institutes are prescribed, below we provide an overview of the option on the Employers’ disposal, pursuant to the Labour Act (Official Gazette 93/2014, 17/2017, 98/2019).

a / Work from Home:

Most employers who have the technical capacity to do so, and where the work process allows, have sent workers to continue their work from home.

Work from home may be conducted in full-time or part-time, which will be discussed later.

b / Remuneration under Article 95 of the Labour Law:

Article 95 (3) of the Labour Law stipulates that a worker is entitled to a salary remuneration during the termination of work caused by the fault of the employer or by other circumstances for which the worker is not responsible.

Pursuant to paragraph 5 of the same article, a worker is entitled to a salary remuneration equal to the average salary paid to him in the previous three months.

c / Annual Leave:

Many employers have opted to send their workers on an annual leave or even decided on having a collective annual leave due to these extraordinary circumstances.

Employers opted for this measure since the workers are entitled to an annual leave, and the employer benefits from sending them to the annual leave at the time when there is no work. The workers are paid wages, at least in the amount of their average monthly salary in the previous three months (including all receipts in cash and in kind constituting a remuneration).

Considering that Article 85 (4) of the Labour Act stipulates that the employer must inform the worker at least fifteen days before the use of annual leave on the duration of the annual leave and the period of its use, we are of the opinion that in this case the Decision on annual leave should state that it is handed to the worker because of the epidemiological crisis situation and that the worker agrees with the use of annual leave and the fact that the legal deadline of 15 days has not been respected.

Of course, every worker can only go for an annual leave only for as many days as he has left for years 2019 and 2020.

d / Part-time work:

Full-time or part-time employment is governed under the employment contract and employers cannot change the fact of full-time or part-time work without the consent of the worker.

If the workers do not agree, the employer must go into the process of cancelling the existing employment contract with the offer of the amended contract, where then the employment contract is cancelled and the employee is offered a new one with half-time or part-time employment. In doing so, the employer must remain vigilant in carrying out the prescribed procedure before terminating the employment contract, regardless of the extraordinary circumstances.

If the worker does not agree to the offered new conditions, the termination takes effect in the part in which the employment is terminated and the worker shall be entitled to both termination deadline and severance pay, since this is a business conditioned termination of the employment contract.

e / Salary reduction:

e.1. Employers who, as a result of this pandemic, will not have enough cash to pay all workers’ wages and will not want to cancel the employment contracts may have to move towards reducing workers’ pay in the event of a pandemic.

In this case, too, amendmends to existing employment contracts and wage provisions would not be possible without the consent of the workers.

If the workers do not agree, the employer must go to the procedure of termination of the existing employment contract with the offer of the amended contract, where then the previous contract of employment is cancelled and the worker is offered a new one with a reduced salary. In doing so, the employer must remain vigilant in carrying out the prescirbed procedure before terminating the employment contract, regardless of the extraordinary circumstances.

If the worker does not agree to the offered new conditions, the termination takes effect in the part in which the employment is terminated and the worker shall be entitled to both termination deadline and severance pay, since this is a business conditioned termination of the employment contract.

e.2. Minimum Wage Amount for 2020:

What employers must keep in mind, in any case, is that the salary may not be contracted for less than the minimum wage. In Official Gazette no. 106/19. A Regulation on the Minimum Wage has been published. For the period from 1 January to 31 December 2020, the minimum gross wage was set at HRK 4,062.51.

f / Unpaid leave:

Article 87 of the Labour Act stipulates that an employer may grant unpaid leave at the worker’s request.

During the unpaid leave, rights and obligations arising from employment or in connection with employment shall be suspended, unless otherwise provided by law.

Therefore, without the request or consent of the worker, the employer cannot decide on the unpaid leave.

While explaining the institute of idle time, we state that idle time means that the content of the employment relationship is not practically realised, that is, during the idle time, no rights or obligations can be acquired based on the mere fact of the idle time. However, the idle time involves retaining existing rights and obligations from the time preceding it and anticipates them to be exercised further.

g / Termination of Employment Contract:

If none of the above options are feasible, the employer is left with the final measure provided for by the Labour Law, which is the termination of the employment contract.

We are of the opinion that the majority of employers who will be forced to dismiss in this particular case are going to use business terminated employment contracts, while it is still being discussed whether or not it shall be possible to use extraordinary termination of employment contracts due to the important fact in relation to those employers who have been forbidden to conduct business under the order of the competent authority.

In any case, before the cancellation, the entire cancellation procedure must be carried out, and if it is a business-conditioned termination of the employment contract, workers are entitled to both a notice period and severance pay in accordance with the conditions prescribed under the Labour Law.

This brief overview of legal options did not enter into other sources of law (rulebooks, collective agreements, employment contracts, employer and the workers’ council agreements, etc.), which all must be observed by the employer before using any of the aforementioned institutes.