CMS Expert Guide on discrimination in the workplace in Croatia

The matter is regulated by three main acts:

• The Anti-Discrimination Act as of 2008 (amended in 2012) prohibits both direct and indirect discrimination. Furthermore, the Anti-Discrimination Act recognises various forms of discrimination such as: (i) harassment and sexual harassment; (ii) incitement to discrimination; (iii) failure to make a reasonable adjustment; (iv) segregation; and (v) multiple, prolonged and repeated discrimination.
• The Labour Act as of 2014 (amended in 2017 and 2019) explicitly prohibits direct or indirect discrimination in the field of work and working conditions, including selection criteria and conditions for employment, promotion, professional guidance, professional training and development, and retraining. Furthermore, the employer is obliged to protect the dignity of the employee during work from any conduct of managers, colleagues and persons with whom the employee comes into regular contact, which could be deemed as contrary to the applicable legislation and would constitute unwanted conduct towards the employee.
• The Gender Equality Act as of 2008 (amended multiple times, most recently in 2017) regulates the method of protection against discrimination based on gender. Prohibited conduct under this Act includes: (i) exclusion or limitation made on the basis of gender, the consequence or purpose of which is to endanger or prevent the recognition, enjoyment or use of human rights and basic freedoms in the political, economic, social, educational, social, cultural, civil or other fields; (ii) less favourable treatment of women on the basis of pregnancy and maternity; (iii) inciting another person to discriminate; and (iv) harassment and sexual harassment.

The Anti-Discrimination Act protects a wide range of characteristics, including: (i) race, ethnicity or skin color; (ii) gender; (iii) language; (iv) religion; (v) political or other belief; (vi) national or social origin; (vii) wealth status; (viii) trade-union membership; (ix) education; (x) social position; (xi) marital or family status; (xii) age; (xiii) health; (xiv) disability; (xv) genetic inheritance; (xvi) gender identity; (xvii) expression; and (xviii) sexual orientation.

The Anti-Discrimination Act refers to all areas of activity, not just employment. Therefore, the above-mentioned characteristics are protected in all kinds of relationships including employment. 

When it comes to the Labour Act, it currently covers only “classic” employment relations (i.e. workers engaged on the basis of a service agreement). Platform workers are not included yet. 

In organisations, that employ 20 or more employees, an internal reporting system must be established, and a dignity officer duly appointed. Complaints can be made (and resolved) internally by the dignity officer.

If such an option is unavailable or if the issue was not satisfactorily resolved within a set timeframe, the employee can seek protection before the courts. In certain cases, the employee can cease further work with the employer until adequate protection is granted either by the employer or the courts.

The employee can make a request to the court to: (i) make a finding that the conduct represented discrimination; (ii) prohibit all activities that constitute discrimination (i.e. resolve the case and its consequences); (iii) award damages incurred by the violation of the employees’ rights in accordance with the applicable civil law rules; and (iv) publicise the court decision in which there was a finding of discrimination.

In court proceedings, the burden of proof lies with the employer (i.e. the employer must prove that there was no conduct constituting discrimination against the employee).

The level of compensation varies, depending on the specific situation. For example, if the discrimination led to loss of profit, the compensation corresponds to the amount that could reasonably have been expected in the regular course of things or due to special circumstances, and was prevented by the subject discrimination. Furthermore, in case of non-material damages, fair monetary compensation will be awarded. This compensation will be calculated according to, inter alia, the intensity and duration of the pain (physical and mental) and fear caused by the discrimination. 

In addition to the above, complaints can be filed with the Ombudsman, who is further authorised to forward the complaint to the competent authorities (if applicable) or can recommend other measures to mitigate any unwanted behavior (if deemed necessary).

Employers are required to ensure a safe work environment, which includes the protection of employees’ dignity during work from any acts by their managers, colleagues and persons with whom the employee comes into regular contact, which could be deemed as contrary to the applicable legislation and would constitute unwanted conduct towards the employee.

In addition, as previously mentioned, an employer with 20 or more employees is obliged to appoint a dignity officer responsible for handling all types of complaints from employees regarding violations of their dignity.

Furthermore, it is it is common for employment by-laws within companies (in some cases even an obligation) and collective bargaining agreements (CBA) to tackle the matter. However, by-laws and CBAs usually contain only a general prohibition of discrimination and reference to the legislation referred to above. It is rarely seen that CBAs contain any additional protection or measures other than those prescribed by law.

At the moment, an employer is not required to adopt D&I Policy (refer to question 9 for exceptions to this). Therefore, having D&I Policy would be considered best practice.

No legal risks exist for employers not having a D&I policy in Croatia (refer to question 9 for exceptions). However, reputational risks and ESG consequences are expected to become a topic in the near future.

Employers are not yet required to report on pay transparency or report on the gender/ethnic/disability pay gap.

Croatia is subject to EU data protection rules, including the General Data Protection Regulation (GDPR). Therefore, any processing of diversity data that constitute personal data must be done in full compliance with the principles and obligations of the GDPR. This includes defining a legal basis for processing, providing a clear notice to data subjects, only processing what is strictly necessary (e.g. restricting access, defining appropriate retention periods, anonymising data when possible), potentially conducting a data protection impact assessment, etc.

If diversity data fall within the category of sensitive data (e.g. racial or ethnic origin, sexual orientation, disability), it is also necessary to identify one of the exemptions from Article 9(2) GDPR. The processing is otherwise prohibited. Exemptions that might apply in the given context are (i) explicit consent; (ii) the need to carry out the obligations and exercise specific rights of the controller or the data subject in the field of employment, social security and social protection law; or (iii) reasons of substantial public interest.

In general, the Croatian Personal Data Protection Agency (AZOP) has taken a position that consent should be avoided in the employment context, except in exceptional circumstances. Following that logic, certain legal (e.g. anti-discrimination) obligations may be considered as the most appropriate basis for exemptions. However, since there is no express guidance at the local level for the processing of diversity data, a separate case-by-case assessment is advisable. This is especially the case since the processing of diversity data is rarely expressly required by law.

Besides the GDPR, additional data protection rules are prescribed by the Employment Act. For example, it is prescribed therein that employee personal data can only be processed if prescribed by the law or necessary for the exercise of rights and obligations from or in connection with the employment relationship. Any such data processing must be predefined by the employment bylaw.

There are no legally prescribed D&I quotas at the level of the management board, supervisory board, or other corporate governing bodies.

However, in certain sectors, diversity is achieved through other less direct means. For example, credit institutions are obliged to adopt internal policies on promoting the diversity of their management and supervisory boards, which must consider aspects such as gender, geographical origin, etc. Larger credit institutions are also obliged to set a goal for the representation of the underrepresented gender, as well as determine the strategy and timeframe for achieving this goal. Reference trends and practices related to diversity are overseen by the Croatian National Bank. Similarly, diversity obligations are prescribed for management boards of investment companies. There are also other examples such as the Corporate Governance Code mentioned below (see question 10).

At the employee level, quotas are prescribed for persons with disabilities, but only if the employer meets certain conditions (e.g. employs at least 20 persons in total and is not one of the ''exempt'' employers such as the police, the armed forces). The quota is currently 3% and can be avoided if the employer pays a monetary fee instead.

Generally, corporate governance rules relating to D&I are adopted internally by companies and other entities.

However, an example of corporate governance rules that have a wide reach in Croatia is the Corporate Governance Code issued by the Croatian Financial Services Supervisory Agency (HANFA). It applies to companies whose shares are admitted to trading on the regulated market of the Zagreb Stock Exchange. The code mentions the importance of diversity in the context of forming the companies’ management and supervisory boards, stating that it is “an important consideration to ensure that different perspectives are taken account of in the board’s decision-making”. It also envisages the setting of targets for the percentage of female members on the supervisory and management boards to be achieved within a five-year period, etc.

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