Types of employment contracts in Croatia

Image by Pexels

PUBLISHED: 24/11/2021

There are 3 different types of employment contracts in Croatia. Each has its own limitations and implications, so it’s important to understand the difference if you plan to work in Croatia.

When working for a company, you will usually conclude a worker’s contract. If someone hires you for a specific service, you might work under a service contract or author’s contract.

In this post, we cover:

The facts are these…

Types of employment contracts in Croatia

There are 3 types of employment contracts:

  • Worker’s contract – Standard contract between a worker and employer within a company
  • Service contract –  Contract where a performer obliges to perform a certain job for a client who will pay a fee
  • Author’s contract – Contract concluded for an original intellectual creation from the fields of literature, science, and art

What is a worker’s contract (ugovor o radu)

The worker’s contract is called “ugovor o radu” in Croatian which translates as “contract of employment” or “contract on work”. A worker’s contract is concluded in written form. When we talk about the contracts between workers and employers in Croatia, we usually refer to this type of contract.

Most people in Croatia who have regular jobs work under worker’s contracts. Read: [How to find a job in Croatia]

There are 2 types of worker’s contracts:

  • Worker’s contract for a definite/specified period called “ugovor na određeno”
  • Worker’s contract for an indefinite/unlimited period called “ugovor na neodređeno”

Each contract can be concluded on a full-time or part-time period.

If you want to get a work and stay permit in Croatia, you need a worker’s contract from your employer. [Read: How to apply for a work permit]

Ugovor na određeno

A worker’s contract “na određeno” defines the exact period of time for which the contract is concluded or a date of termination of the contract. It can also terminate after the performance of the job or the occurrence of a particular event. The total duration of all consecutive contracts including the first can’t last for more than 3 years. If a worker continues to work after the expiration of the contract, it is considered that a contract is concluded for an indefinite period of work.

An example of a contract for a definite period is available here.

Ugovor na neodređeno

Worker’s contract “na neodređeno” binds all parties until the contract is terminated under the manners defined in the Labor law. If the exact period of time for which the contract is concluded is not specified in the contract, it is considered that a contract is concluded for an indefinite period.

An example of a contract for an indefinite period is available here.

Before you start to work, your employer must:

#1 Give you a written confirmation of the concluded contract

If they don’t issue this certificate or sign a worker’s contract with you within a prescribed period, it is understood that you have a worker’s contract for an indefinite period.

#2 Register you for obvezno health insurance

Your employer must sign you up for Croatian compulsory health insurance called “obvezno osiguranje”. They must provide a copy of the application for obvezno health insurance within 8 days from the expiry of the application deadline. [Read: Croatia’s state health care obvezno insurance, what it costs and what is included]

#3 Register you for pension insurance

Your employer must also sign you up for Croatian pension insurance called “mirovinsko osiguranje”. They must provide a copy of the application for mirovinsko osiguranje within 8 days from the expiration of the application deadline. [Read: Everything you need to know about Croatia’s pension system]

Worker’s contract content

Every worker’s contract must contain the following data:

  • Name of the parties of the contract
  • Address of residence or the registered office of parties
  • Work place – if there is no permanent or main place, note that work is performed in different locations
  • Name, nature, or type of work OR a shortlist of work OR job description
  • Start date
  • Expected duration of the contract – for a definite contract
  • Duration of paid annual leave and manner of determining the duration
  • Notice period called “otkazni rok”
  • Basic salary, salary supplements, and periods of payment of incomes to which the employee is entitled
  • Duration of a regular working day or week

This contract must be in the Croatian language for it to be binding. [Read: How to create a legally binding contract in Croatia.]

Worker’s contract is defined by the Zakon o radu (Labor law) which is available here.

What is a service contract (ugovor o djelu)

The service contract is called “ugovor o djelu” in Croatian and a performer of the work is called “izvođač”. A service contract is a type of contract where the performer obliges to perform a certain job for the client who will pay them an agreed fee.

For example, a service contract can be concluded for making or repairing something or performing certain physical or mental work including furniture making, car repair, field work, draft of a legal work, short-term sale of Christmas cards at the booth, for example.

During the performance of work, the client has the right to supervise the performance. They can also give instructions to their performers if it is appropriate and performers are obliged to enable them to do so.

The work status of the employee is not important. They can already have a full-time job, or be an unemployed or retired person.

An example of a service contract is available here.

What to know if you are a performer

A performer has to respect the following:

  • Work must be performed as agreed and according to the rules of the profession
  • Work must be performed within a defined period of time
  • If a period is not determined, work must be performed within a period reasonable for certain type of work
  • Work doesn’t have to be performed by the contractor personally unless this is specified in the contract
  • Performer is responsible for the execution of the work
  • Performer is responsible for people who work on their behalf

What to know if you are a client

If you are a client, you have to inspect the work as soon as possible. If you find issues, you have to inform the performer. If the performer asks you to inspect the work before accepting it, the work is considered to be accepted. After the acceptance, the performer is no longer responsible. However, if you notice an issue that couldn’t be discovered with the initial inspection, you have the right to ask the performer for a repair.

During the performance, you might notice that a performer is not performing work according to the obligations determined by the service contract. For example, they might give you poor service or you may notice issues.

In this case, you can warn a performer and give them a reasonable deadline to fix the work according to the contract. If they don’t do it, you have the right to terminate the contract and ask for a damage fee.

If you notice that a performer is significantly late in starting or finishing the work, you have the right to terminate the contract and ask for a damage fee regardless of the deadline.

A service contract is defined by the Zakon o obveznim odnosima (Law on obligatory relationships). It is available here.

What is an author’s contract (autorski ugovor)

The author’s contract is officially called “autorskopravni ugovor” in Croatian or “autorski ugovor” in short. An author’s contract is a contract concluded for an original intellectual creation from the fields of literature, science, and art. This work called “autorsko djelo” must have an individual character regardless of the expression manner and form, type, value, or purpose.

An example of an author’s contract is available here.

What is considered to be an author’s work

The author’s work is an original intellectual creation created by the author. It has to be original, creative, and subjective, and it is considered an original work if the author does not imitate another work or author.

An author’s work includes the work from the following fields:

  • Linguistic – writing, speech, computer programs, etc.
  • Music
  • Drama
  • Choreography
  • Pantomime
  • Fine art – paintings, sculptures, graphics, etc.
  • Architecture
  • Applied arts
  • Industrial design
  • Photography
  • Audiovisual – cinematography, etc.
  • Cartography
  • Scientific and technical reviews – drawings, sketch plans, tables, etc.

The author’s work which is an original intellectual creation of an individual character is protected as an independent author’s work. This includes:

  • Translations
  • Adaptations
  • Musical arrangements
  • Other adaptations of the author’s work.

The author’s contract is defined by the Zakon o autorskom pravu i srodnim pravima (Copyright and related rights act). It is available here.

Differences between employment contracts

Worker’s contract

  • Concluded for the performance of work from the working activity of the employer
  • Employee must work according to the instructions of the employer and their needs
  • Employer must provide the means of work
  • Employee works within defined working hours
  • Employer pays a salary to the employee
  • A foreigner can receive a work and residence permit based on this type of contract

Service contract

  • Concluded for the performance of work from the working activity of the worker
  • Performer works independently
  • Performer can perform a job personally or another person can do it for them
  • Working hours are not defined and performer works according to their own schedule
  • Performer works in their own space
  • Employer only has the right to supervise the work of the performer and ask for corrections if something goes wrong
  • Employee performs the work with his own private means of work
  • Employer pays a fee to the performer
  • Employee must have the right to work freely to perform under this contract

Author’s contract

  • Concluded for the performance of work from the working activity of the worker
  • Employee performs the work with his own private means of work
  • Author transfers copyright to their work on the client through the contract
  • Employer pays a fee to the author
  • Employee must have the right to work freely to perform under this contract

View our other work articles


Sources:
https://www.iusinfo.hr/aktualno/u-sredistu/45240
https://gov.hr/hr/ugovor-o-radu/832
https://gov.hr/hr/rad-na-odredjeno-i-neodredjeno-vrijeme/836
https://seminar.hr/ugovor-o-djelu/
https://www.poslovni-savjetnik.com/aktualno/ugovor-o-autorskom-djelu-autorski-ugovor-primjer-obrazac-porez-izracun-honorara

Please note: All information provided by Expat in Croatia is only for the purposes of guidance. It does not constitute legal advice in any form. For legal advice, you must consult with a licensed Croatian lawyer. We can recommend one if you contact us.

Sharing is Caring:

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to the Expat in Croatia Newsletter and get a FREE GUIDE to the 9 Tips for Battling Croatia's Bureaucracy.