Government to Withhold Pay Increase for Public Services Employees

By 20 July 2017

Unlike their public services colleagues, state employees will get a raise.

A 2-percent increase in the base for calculating salaries, which will be applied to salaries paid out starting in September, will be implemented only to state employees, but not to public services workers. This is the second 2-percent increase in the base salary, which was agreed with the government by the state employees’ unions at the end of last year; the first increase was applied starting from February, the second will be paid in September, and the third one in December, reports Jutarnji List on 20 July 2017.

Although the agreement has been reached only with trade unions representing state employees (while negotiations with the unions of public services have collapsed), in February the government paid increased salaries to everyone. “In February, we showed our good will. The government then made a decision and increased the wage base for everybody. However, there has been no progress in negotiations since then, and in September we will not do that again. There is no binding agreement which could force us to do it,” said a government source.

If this actually happens, this will be the first time in recent history that salaries of state employees (police officers, taxpayers, customs officers, tax inspectors, state and local government employees) will be calculated from a different base than salaries of public services employees (teachers, doctors, social workers, professors, nurses...).

“We do not have any official information on this, and we believe that the government will not make such a decision. If it were really to decide to divide the public and government sector, this would open Pandora's box and motivate all public services employees to respond in the autumn,” said Branimir Mihalinec, head of the Independent Union of High School Employees.

He added that a strike would certainly be one measure which would be seriously considered. A decision to pay salaries calculated from two different bases would be, according to Vilim Ribić from the Independent Trade Union of Science and Higher Education Employees, a sign of a complete misunderstanding of the system. “The unions will meet this week with Labour Minister Marko Pavić, and we will see what this is all about,” said Ribić.

State employees and public services workers have always had the same base for salaries and the same benefits. “Salaries of state employees and public services workers have always been aligned, and we expect it to continue. This is something we will insist on at all costs; anything else would be discrimination,” said Ivica Babić, president of the Croatian Medical Union. Since the number of state employees is just one-third of the number of public services workers (60,000 versus 180,000), such a decision would be far cheaper for the state budget, but it could cause serious social unrest.

The three increases in the salary base for state employees in 2017 are part of an agreement that part of the trade unions concluded with the government at the end of last year, which is an “implementation plan” for an agreement signed in 2009, when both state employees and public services workers agreed for their base salary to be reduced by six percent due to the economic crisis. The trade unions insisted that the base salary should increase again when economic conditions improve.

Since the fulfilment of the agreed conditions would bring a grave cost to the state budget, the last three governments have sought ways to avoid the payment. During 2016, protracted negotiations were conducted, which were finalised last December with the agreement between the government and state employees that the base salary would increase three times by two percent during 2017.

The government offered the same agreement to public services workers, but it simultaneously demanded that they should fully renounce the benefits for 2016 and all the other increases, which their trade union representatives did not accept.