Background information

The legal framework for insurance of workers’ claims consists of following acts and decisions:

1. The Act on insurance of workers’ claims (OG 70/2017)
2. The Rulebook on the content of the worker's request form for exercising rights in the case (OG 92/2017)
3. The Rulebook on the content and method of submitting forms in the procedure for exercising rights in case of stalling the employer's account (OG 92/2017)
4. The Act on General Administrative Procedure (OG 47/2009; 110/21)
5. The Labour Act (OG 93/2014; 127/2017; 98/2019)
6. The Bankruptcy Act (OG 71/2015; 104/2017)
7. The Enforcement Act (OG 112/2012; ... 131/2020) 8.The Act on Enforcement of Funds (OG 68/2018; 02/2020)
8. The Statute of Agency for ensuring workers’ claims in the event of an employer’s bankruptcy (OG 112/2017).

Content of measure

The Croatian bankruptcy law guarantees the payment of workers’ claims for three earned, yet unpaid, gross salaries, for employees (regardless of their employment contract) whose employer has been declared insolvent or bankrupt. Other claims arising from the employment contract for the last three months before the initiation of a bankruptcy process, regardless of the type of employment contract are also included. An employee whose contract was terminated during the three months before the opening of bankruptcy proceedings, but has not been successfully compensated for wages earned, is also entitled to avail of this instrument.

The fund for ensuring workers’ claims in the event of an employer’s bankruptcy is a special fund established by an agency [Agencija za osiguranje radnickih potrazivanja u slucaju stecaja poslodavca] and financed from the state budget to cover bankruptcy costs if the funds available from the bankruptcy estate are not sufficient. Claims can be paid to workers provided that they have reported them to the agency or the governing office of the Croatian employment service within 30 days of the governing court's decision on the bankruptcy estate or starting from the 8th day after the announcement of the bankruptcy process in the Official Gazette. In 2017, the agency changed the name to the Agency for Insurance of Workers' Claims.

Use of measure

According to the Annual report for the Agency responsible for the fund, in 2017, there were 1,110 paid demands for a total amount of HRK 18.7 million (€2.5 million), while the total received from bankruptcy procedures was HRK 13.7 million (€1.8 million). The number of requests decreased from 2,526 in 2016 to 940 in 2017. Particularly high expenditures were in July 2017, HRK 6.1 million (€0.81 million) for 331 workers. In 2018, there were 1,775 paid demands for a total amount of HRK 33.1 million (€4.4 million), while the total received from bankruptcy procedures was HRK 9.2 million (€1.3 million).

The Agency responsible for Workers' Claim Insurance in its Annual report for 2021 (table 2 on page 11), states that in 2021, it paid out the claim insurance for 507 workers, what is significantly lower than in 2020, when the claim insurance was paid out for 1,275 workers. The biggest firms-users were ORLJAVA from the City of Požega for 166 workers, OPEKA from the City of Osijek for 99 workers and MEISO from the City of Goričan for 79 workers. While in 2020, a total paid out amount was HRK 22.5 million (€2.8 million), in 2021, it was paid out HRK 5.7 million (€744 thousand). In 2021, a total amount of a reimbursement from the bankruptcy assets (table 7 on page 15), was HRK 38.5 million (€4.98 million) what is better than in 2020, when HRK 12.4 million (€1.60 million) was collected.

Target groups

Workers	Businesses	Citizens
Employees in standard employment	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement	No involvement
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Unknown

Involvement

No involvement.

Views and reactions

The trade union in Croatia expressed interest of participating in bankruptcy and pre-bankruptcy proceedings, both in an effort to achieve a more favourable position for workers, and when giving assessments on the course of the proceedings, as well as on the prices achieved in the bankruptcy proceedings when selling assets, or the company as a whole.

Sources

• 23 July 2008: Zakon o osiguranju potraživanja radnika u slučaju stečaja poslodavca (The Act, OG 86/08) (narodne-novine.nn.hr)
• 29 June 2015: Bankruptcy Act (Stečajni zakon, OG 71/15) (narodne-novine.nn.hr)
• 19 July 2017: Decision on Proclamation of the Law on Insurance of Workers' Claims (Odluku o proglašenju Zakona o osiguranju radničkih tražbina) (narodne-novine.nn.hr)
• 13 September 2017: Ordinance on the content of the employee's claim form for exercising rights in the event of bankruptcy of the employer (Pravilnik o sadržaju obrasca zahtjeva radnika za ostvarivanje prava u slučaju stečaja poslodavca - OG 92/17) (narodne-novine.nn.hr)
• 16 October 2017: Amendments to Bankruptcy Act (Stečajni zakon, OG 104/17) (narodne-novine.nn.hr)
• 16 February 2018: Yearly report for 2017 by the Agency (Agencija za osiguranje radnickih trazbina) (www.aort.hr)
• 05 February 2019: Yearly report for 2018 by the Agency (Agencija za osiguranje radnickih potrazivanja u slucaju stecaja poslodavca) (www.aort.hr)
• 11 November 2020: ERM database on restructuring related legislation (www.eurofound.europa.eu)
• 04 February 2021: Monthly report by the Agency for January 2021 (Agencija za osiguranje radnickih potrazivanja u slucaju stecaja poslodavca isplate u siječnju 2021.). (www.aort.hr)
• 10 March 2022: Godišnji izvještaj Agencije za 2021 (Annual Report by the Agency) (www.aort.hr)
• 25 October 2023: Agencija za osiguranje radnickih potrazivanja u slucaju stecaja poslodavca (Agency for ensuring workers’ claims in the event of an employer’s bankruptcy) (www.aort.hr)
• 09 February 2024: Yearly Report by the Agency for insurance of the claims protected by law (www.aort.hr)