At its first session on Thursday, the Croatian government formulated a set of legislative amendments extending a ban on the payment of salary bonuses of 4%, 8% and 10% based on years of service for public sector employees.
Labour and Pension System Minister Nada Sikic recalled that under the existing law, the suspension of said salary bonuses was in force until 31 December 2015.
Considering the fact that the law is no longer in force, as of January 1 this year civil servants would have the right to a salary bonus based on their years of service, in line with collective agreements applicable to them.
However, considering the fact that the current budget is temporary, covering the first three months of this year, and that outlays for public sector employees for the remaining months of 2016 would have to be lower than in 2015, the suspension has to be extended for the period until the end of the year.
Taking into account the fact that the salary bonus based on years of service in the public sector is not a constitutional category but a privilege, the government believes that that privilege is subject to changes depending on the country's economic situation.
Even though the suspension will affect the financial rights of a certain category of public sector employees, there is a legitimate goal that justifies it - the need to preserve the stability of the state financial system in the economic crisis by taking short-term measures concerning the revenue side of the budget, said Sikic.
Budget outlays projected for 2016 will be lower than in 2015, and the continued suspension of said salary bonuses is envisaged by those projections, Sikic said, adding that "the financial effect of this structural measure is expected to be around HRK 250 million."
Finance Minister Zdravko Maric warned that until the amendments entered into force, the state would nonetheless have to pay the salary bonuses to avoid complaints of unconstitutionality, and that the temporary budget did not envisage funds for that.
We will take action to secure the funds in question and make the payments, said Maric.
"We believe that it is good that this law has been formulated at the first government session already, but we also believe that the dialogue with the social partners should continue considering the situation with salaries and the budget," Maric said, adding that he was preparing for a meeting with unions of public-sector employees.
Health Minister Dario Nakic stressed that the government's decision would not result in a salary cut but rather that salaries would not rise, which he said should be emphasised as otherwise the government would be accused of starting its term with salary cuts.