The termination of employment must be made in writing.

Termination of employment by mutual agreement means that the employer and the worker have agreed on the terms of that termination, including the rights and obligations of both parties (when precisely the employment relationship ends, whether the worker must work during the notice period, whether severance pay is to be paid and in what amount, etc.). Everything agreed must be stated in writing.

Workers who wish to terminate an employment contract do not have to give a reason.

Employers must have a valid reason for terminating the contract. That reason must be explained in the decision on dismissal which must be delivered to the worker.

The notice period which, according to the law, cannot be shorter than two weeks, begins on the day the notice is delivered.

During the notice period, workers have the right (and the obligation) to work and receive a wage for their work. Employers can release workers from their work obligations during the notice period but must still pay them their wage.

Valid reasons for termination include:
•    a cessation of the need to carry out the work (dismissal on economic grounds); or
•    the worker’s inability to perform their duties properly due to certain permanent characteristics (dismissal on personal grounds).

Both cases are instances of the termination of the contract through no fault of the worker.

Valid reasons for ending the contract also include the violation of obligations from the employment relationship (termination due workers’ conduct) and a failure to meet the requirements of the probationary period.

Before ending an employment contract due to the conduct of the worker, the employer must provide a written warning of the obligation with which there has been a failure to comply, point out the possibility of termination and allow workers the opportunity to present a defence.

Employment contracts may also be terminated extraordinarily where either party commits an especially serious violation of their obligations under the employment relationship or if some other particularly important fact occurs preventing the continuation of the employment relationship. Regardless of which party initiates such a termination, it must do so within 15 days of the extraordinary situation arising.

Extraordinary termination also means that the party terminating the contract has the right to compensation from the other party for violating their obligations.

In the event of an extraordinary dismissal, workers do not have the right to notice and dismissal takes place immediately on the day of receipt of the decision.

Sickness and pregnancy are not valid reasons for terminating an employment contract.

Where workers have worked for the employer for more than two years and the reason for the dismissal is not their conduct, they are entitled to severance pay. Severance pay cannot be less than one-third of the wage for each completed year of employment with that employer.

Employers are obliged to issue workers with a certificate on the type of work performed and the duration of the employment relationship.

Workers who believe that their dismissal is not valid must submit a request for the protection of rights within 15 days. If they fail to do so they lose the right to challenge such a decision in the courts.

Workers who have been employed for at least nine months in the last two years are entitled to unemployment benefit paid by the Croatian Employment Service, but only in the following cases:
•    dismissal on economic or personal grounds;
•    an agreement on the termination of the employment relationship was concluded solely on the proposal of the employer; or
•    extraordinary resignation due to the non-payment of wages. 

Applications for unemployment benefit must be submitted to the Croatian Employment Service within 30 days. In the same timeframe, it is necessary for the worker to report their unemployment status to the Croatian Health Insurance Fund in order not to lose the right to health insurance.