used without permission, for "fair use" only

Bread and Police

by Ivan Polan

Feral Tribune, Split, Croatia, October 14 1996

Today in Croatia, 150,000 of workers work for employers who pay the salaries with a delay of five months. They work because they have to. Otherwise they would automatically loose their jobs and any hope of finding alternative employment in the future together with their unemployment benefits. Therefore, we can conclude that 150,000 Croatian citizens are on forced labor. The state, on the other hand, has sided with those of its citizens who benefit from the results of that forced labor.

Recently, a book, "Labor law with commentary", by a group of authors (among whom are Prof. Zarko Potocnjak, the author of the law, Jozo Skara, the minister for labor in the Croatian government and Vera Babic, assistant to Mr. Skara) was published. Prof. Potocnjak and the representatives of the executive authorities are in agreement when the problems of the 150,000 persons on forced labor are concerned. The authors believe that article 210 of the Labor law (Sindicates or associations of syndicates have a right to call a strike with the goal of protection of economic and social interests of their members) actually means that the aforementioned 150,000 people on forced labor who hadn't received their salaries in 5 months do not have a right to strike. Therefore, if they do call a strike, a court can ban it and police act against the striking workers!

In short, the arguments of the authors are as follows: the right to fair salary is protected by the law. Workers should enforce that right through courts.

Grammatical attack on Strike

Having in mind that the president of Croatia has announced the formation of a legal system which will serve to implement the state policy, one is justified in doubting that the Supreme Court of Croatia has recently taken the side of the employer in the case concerning company Pobest from Ploce in order to implement the state policy, as defined in the order given by the president to professor Potocnjak and the opinions of the Ministry for labor published in the aforementioned book.

The Supreme Court banned the strike giving the same reasons as in the book "Labor law with commentary", with an additional comment that the court has reached its decision through gramatical interpretation of article 210 of the Labor law. I invite the readers and especially lawyers and judges, to carefully read article 210 (quoted at the start of this article) and try to understand how it was possible to reach the conclusion that a strike because of huge wage arrears is illegal. Furthermore, article 60.1 of the Croatian Constitution states: The right to strike is guaranteed.

Detrimental influence of the state authorities and the aforementioned book is obvious from the verdict of the County court in Zagreb. The court banned the strike in Oroslav company Prajs in which the employees hadn't received their salaries for 4 months. The court didn't even bother to justify its decision but took it as self evident that a strike because of wage arrears is illegal. It remains to be seen whether the Supreme Court will insist on the same interpretation of the Labor law when this case comes to its attention.

This interpretation of the Labor law doesn't make sense for several reasons. First, it cannot be reached by the grammatical analysis of the text. Secondly, such interpretation contravenes article 60.1 of the Croatian Constitution. Third, by making such a decision, judicial authorities have overstepped their jurisdiction: they aim to regulate social relations in accordance with the state policy while this should be the prerogative of the parliament. The Parliament should solve the problem either by truthfully interpreting or amending the labor law.

Fourth, and most important, this reading of the law makes it impossible to fairly resolve strike related problems in Croatian conditions, and this judicial practice will unavoidably lead to anarchy. Then, the employers will beg unions to organize strikes, because strikes are, after all, organized actions and protect their property. One of the possible responses of the syndicates to such practice may be to dissolve union locals in those companies where courts ban strike; that way, unions will absolve themselves of responsibility and let employers deal with a mob.

Suggestion to 150,000 workers who haven't received their pay for months, to protect their rights in courts is highly cynical, although such advice may work in legal theory. Unfortunately, we are not engaging in theoretical discussions but are dealing with raw practice. Workers are forced to work without pay for a few more years until the overwhelmed judicial authorities resolve their own and worker's problems!

The example of Krapina textile industry (KTI) is a good illustration of how all this works in practice; Feral has already written about this company several times in the past.

Secret Documents

All together, 598 workers of this company have filed suits with the municipal court in Krapina because of illegal dismissals. A presiding judge almost fainted when he heard that his court had received 598 new cases. There are no judges and those who should be there still haven't been appointed. Due to the political "weight" of KTI and the forthcoming elections, political struggles about who will be the "savour" of the 598 KTI workers have begun in Krapina. One of the judges claims that the workers shouldn't have filed their suits with the assistance of their syndicate because "the people from the syndicate are incompetent"; Court president now claims that suits are counterproductive since they do not protect workers' rights. The cases still haven't entered the regular procedure in the court. They are the object of a political struggle between left and right in Krapina. Only after several months, the president of the municipal court concurs that the main purpose of the court is to pass judgements and not, as he claimed until recently, to protect workers' rights. Workers are protected by their lawyers and syndicate, employers by their lawyers and their association, and the court is there to pass a verdict.

Isn't this another case of implementation of the state policy? There are indications that this might be the case. Recently, during the Krapina arts festival, dissatisfied KTI workers announced a demonstration in front of the invited officials. Allegedly, because of that, unavoidable guest Franjo Tudman this time passed the festival. Instead, minister Ivan Jarnjak and other guests experienced the wrath of the workers. The situation calmed down after the promises by the Interior minister, Ivan Jarnjak, that he himself will come to Krapina and talk to the workers. He kept his promise and, several days later, together with minister Skaro and other collaborators he came to a meeting with approximately 500 KTI workers. According to several people who were present at that meeting, Krapina police chief, Mr. Fruk tried to convince present workers that their suits were useless and that their powerful minister will make sure that KTI problem is resolved by the end of the year; by then all workers will be receiving 500 kunas per month.

Municipal court president admitted that he gave a photocopy of one of the suits, to which only the involved parties are supposed to have access, to minister Jarnjak; Minister Jarnjak used that photocopy for a political showdown with the leftist parties in Krapina. After a long conversation, court president failed to understand that by giving a copy of a suit to the minister, he blatantly broached the principle of the independence of the judiciary, and that minister Jarnjak damaged the integrity of the court by demanding a copy from it.

What position should the lawyer who represents those 598 workers take when the Minister of police and local police chief are reading his documents and publicly trying to convince his clients to give up their suits? And the court doesn't see anything wrong in that! I believe that it is my duty to inform the public about these events, whatever the consequences. I also expect a public apology from Minister Jarnjak and Mr. Fruk.

Plan for a Robbery

Several days before the festival, Krapina textile workers' syndicate organized a round table discussion which was supposed to clarify problems at KTI and hopefully offer some solutions. Although Ministers Jarnjak and Skara and some of their collaborators were invited, none of them took a place at the round table. During the discussion, the full truth about KTI was revealed for a first time in the presence of several journalists (unfortunately, Feral journalists didn't attend the discussion). The truth wasn't published although the journalists were given the original documents, which back up the following statements about KTI:

  1. At the end of the eighties, socialist company Krateks had 2700 employees.
  2. At the start of 1991, several companies ("Krateks predionica cesljane prede" or "Krateks-PCP", "Tkanine", "Energetika i usluge" and "Krapincanka"), previously owned by Krateks, at the same time start bankruptcy proceedings, seceded from Krateks, joined "Krateks-PCP" and established a new company, KTI (?!)
  3. Book value of "Krateks-PCP" with added companies was estimated at DM 25,777,000 , approximately equal to the estimated worth of KTI. Therefore, all the property of "Krateks-PCP" and added companies passed to KTI.
  4. According to some experts, actual book value of "Krateks-PCP" was DM 62,688,791
  5. At the time of founding, the company owed DM 11,819,940 (far less than the actual value of the company) to the Zagreb Bank and DM 1,982,990 to other lenders.
  6. On April 22, 1991, (two months after heated debates in the parliament about the Privatization law and only one day after the law was published in Narodna Novine) "Krateks-PCP" goes into bankruptcy. "Krateks-PCP" was sold for DM 2,292,307 to the Zagrebacka Bank. Taking into account fluctuations of the exchange rate at the time it is possible that the Zagrebacka Bank bought "Krateks-PCP" for mere DM 541,818. The sale contract was signed by bankruptcy administrator Stjepan Horvat who was at the time the director of the Zagrebacka Bank branch in Krapina (?!), and Frano Lukovic, director general of the Zagrebacka Bank(?!). By this contract, Zagrebacka bank also bought the rights to KTI, worth DM 62 million (!!!).
  7. Newly founded KTI takes over the control of "Krateks-PCP". KTI re-employs 713 workers, while the remaining 960 were fired on April 22, 1991.
  8. Soon after the sale of "Krateks-PCP" was completed, Zagrebacka Bank founded another, fictive, company, Krateks Ltd.
  9. "Krateks-PCP" is at this time run by Zagrebacka Bank
  10. KTI is also run by Zagrebacka Bank. Before the sale of "Krateks-PCP", KTI was run by the bankruptcy administrator, already mentioned director of the Krapina branch of the Zagrebacka Bank, Stjepan Horvat.
  11. Krateks Ltd., a fictive company, is also run by Zagrebacka Bank, its founder.

And now the final malversation:

KTI, with its 700 employees and the property valued at DM 62 million comes under control of the fictive company Krateks Ltd. (!!!) instead of going through the lawful privatization process. At the same time, Krateks Ltd. changes its name to KTI (!!!). With this transaction, Zagrebacka bank, tried and succeeded in avoiding privatisation of KTI, and hence cheated the remaining 700 workers.

Last Dismissals

All the events described here took place in accordance with the document entitled "PLAN FOR IMPLEMENTATION OF THE BANKRUPTCY PROCEDURE" which was written on April 18, 1991, by a Zagrebacka Bank team whose members were Stjepan Horvat, Drago Spajic, Viktor Tusek, Franjo Malaric, Vesna Ceres, and Mirjana Jurman. The "plan" was approved at a meeting which took place on April 22, 1991, in Zagreb at the Zagrebacka Bank headquarters. Besides already mentioned authors, the meeting was attended by Franjo Filipovic, assistant director general of the Zagrebacka Bank, Vlado Velic, legal adviser to the Zagrebacka Bank, Milan Jurinjak, president of the local authorities in Krapina, and Ivan Jarnjak (at the time) president of the Krapina municipality.

In 1995, Zagrebacka Bank sold KTI to alleged fighter for the Croatian state, Zvonimir Rilovic for DEM 4,200,000 (according to some versions for DEM 2,700,000 , by exchange of shares in the Zagreb hotel Esplanade).

At the start of 1996, Zvonimir Rilovic fired all the remaining workers.


The author is a lawyer from Zagreb, specialist for labor laws


translated on 1/13/97


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