Analysis

What's Cooking in the Parliament?

Legal news, May 2014

NEWS

Consumer Protection

A new Consumer Protection Act has been published in National Gazette No. 41/14 (”CPA”). It introduces some new rules related to consumersprotection.

The CPA will enter in to force gradually in three stages. The fist part already entered into force on 8 April 2014, while the following part of CPA provisions will enter into force on 13 June 2014. The last set of provisions will enter in to force on 1 January 2015. Until the full implementation of the CPA, adequate provisions of old CPA will be applicable.

Comparing to the old CPA, the new CPA brings most novelties with respect to sale of products at reduced prices (discounts) and with respect to definition of distance contracts.

In that sense the CPA imposes the obligation to traders, which conduct the sale under discount, to declare two types of prices – regular and reduced.

This obligation is applicable to all types of discounts i.e. seasonal discounts, which may be applied within three prescribed time periods (in December/January, April and August) and may last up to 60 days, special sales, general sales, related to termination of a traders work or to retail closure, and sales of default products or products that will expire soon.

CPA provides additional rules for every specific sale. Some of the sales are time limited and omission to meet the prescribed requirements may lead the misdemeanor liability.

With respect to distance contracts, CPA provides additional provisions on definition, execution and cancelation of such contracts. Consumer may generally cancel every distance contract within 14 days without obligation to state the reason for contract cancelation.

With respect to provision of public service, new obligation has been imposed on public service providers to inform consumers of their unpaid obligations when issuing invoices. It will be no longer possible to begin enforcement proceedings if a consumer has disputed an invoice, until judicial or extrajudicial proceedings have been completed, which is intended to encourage consumers to actively protect their consumer rights.

The CPA also regulates the payment in advance in cases when the trader is unable to deliver the goods or services i.e. the trader is obliged in such a case to return to the consumer the amount of advance payment with interest.
CPA prescribes the rules for bearing of expenses of court expert advice in the event of dispute between the consumer and trader related to product defect.

Packaging material, (plastic bags, paper bags, etc.) that bears a trader’s logo is no more considered as marketing material and traders may charge the consumers for such packaging material as any other product.

Employment of persons with disabilities

From 1 January 2015, employers who employ at least 20 workers will have to start applying the Law on Vocational Rehabilitation and Employment of Disabled Persons (Official Gazette 157/13 ). Employers can calculate their obligation to employ people with disabilities based on the total number of workers they currently employ and their main registered business activity (according to National classification of activities - NKD). Depending on type of business activity, the employers will be required to employ the number of persons with disabilities in the range of 2-6 % of the total number of workers with the same employer. Details on the obligation of employment are published in the Regulation on fixing a quota for the employment of persons with disabilities (Official Gazette 44/14).

According to the provisions of the Act and the Regulation it shall be deemed that an employer fulfills its obligation in terms of these rules if he hires persons with disabilities or engages them in some similar manner, not only by entering a full-time employment contract. Acceptable manners of engagement are also entering into agreement on business cooperation, contract for practice, scholarships for students, professional training for work without execution of an employment contract as well as service contract.

In addition, all employers, regardless of the number of workers, which already employ persons with disabilities, should report the data on employed workers with disabilities into the system of Croatian Health Insurance Institute (HZZO) using the form M - 3P. The form should be filled in a way that in the characteristic 22 - Status of Persons with Disabilities they circle that information and enroll the date of the change (which may not be earlier than the date of acquisition of the insured person status based on the form M-1P). If the date of establishment of disability is later than the date of acquisition of the insured person status, enter the date of establishment of disability.

Strengthening the rights of mobile workers within the EU

On the EU level, a new Directive 2014/54/EU of 16 April 2014 has been adopted on measures facilitating the exercise of rights conferred on workers in the context of freedom of movement for workers.

The new rules aim to bridge the gap between rights and reality and will make it easier for people working or looking for a job in another country to exercise their rights in practice. Member States now have two years to implement the Directive at national level.

The Directive aims to remove existing obstacles to the free movement of workers, such as the lack of awareness of EU rules among public and private employers and the difficulties faced by mobile citizens to get information and assistance in the host Member States. To overcome these barriers and prevent discrimination, the Directive requires Member States to ensure:

  • one or more bodies at national level will provide support and legal assistance to EU migrant workers with the enforcement of their rights
  • legal protection of rights (including for example protection from victimisation for EU migrant workers who seek to enforce their rights) and
  • easily accessible information in more than one EU language on the rights enjoyed by EU migrant workers and jobseekers.

ECJ JURISPRUDENCE

Protection of acquired workers' rights during parental leave

The ECJ in C-588/12 dealt with a case in which an employee with a full-time contract of indefinite duration took part-time parental leave. During that period, the employer terminated her employment contract without compelling or sufficient reason to do so. According to Belgian law, the latter is therefore required to pay the worker fixed-sum protective compensation equal to six months’ salary. During appeal, the Higher Labour Court of Antwerp, lodged a question to the Court of Justice whether, in such a situation, the fixed-sum award must be determined on the basis of the reduced salary earned by the worker at the date of his dismissal due to part-time parental leave, or the full salary based on the employee’s regular full-time contract.

The ECJ stated that where a worker is unlawfully dismissed during part-time parental leave, the fixed-sum protective award to which a full-time worker is entitled must be calculated on the basis of full-time salary. After all, a calculation based on part-time salary makes nugatory much of the protective system established by EU law (among which the Council Directive 96/34/EC of 3 June 1996 on the Framework Agreement on Parental Leave) and affects the rights acquired by the worker.

Intellectual Property- deep linking and deep framing generally approved

In its recent decision from February 2014, the Court of Justice of the European Union (“CJEU”) decided that providing clickable links to protected works published on the second site, without any access restrictions, shall not immediately represent an act of infringement.

The CJEU repeated the general principle whereby it is not allowed to publish protected work without permission of the author. However, if we consider articles legally published on the Internet with no restriction access, these are generally available to any user having the Internet access. The CJEU therefore took the view that by adding clickable links to such protected works (articles) published on the second site, manager of the first site does not infringe copyright in these works i.e. that the deep-linking is allowed. However, in case link from one site makes it possible to circumvent restrictions put in place by the site on which the protected work appears (e.g. only available to subscribers) or the article is no longer available on the original site, the linking could present copyright infringement.

Furthermore, the CJEU stated that such a finding could not be called in question in case when Internet users would click on the link at the issue and the work would appear in such a way to give impression that it is appearing on the site on which the link is found i.e. when it would not be clear to the Internet user that the article is published on the second site (deep-framing). And although it seems that it is allowed in the same way as deep-linking, deep-framing might be controversial from the trademark perspective. Note that in the case at hand, the CJEU was asked to give interpretation only in relation to the copyright protection.

NAJAVE

European Account Preservation Order

After its publication in the EUOfficial Journal, which is expected in June 2014, the European Account Preservation Order (“EAPO”) will be directly applicable in the Member States (except in the UK and Denmark).

EAPO is intended to be alternative for cross border debts to procedures existing under national law. It will enable the creditor to block the debtor's account although it will not allow money to be paid out to the creditor as an interim protection procedure. To actually get hold of the money, the creditor will always have to obtain a final judgment on the case in accordance with national law or by using one of the simplified European procedures.

Draft Act on Expropriation and Fee Determination

According to the Parliament, the necessity of implementation of the new Expropriation Act is due to the shortcomings identified during application of the Act in force which was amended on several occasions.

The practice e.g. shows that the majority of disputes between owners and expropriation applicants is triggered by the determination of the fee for the expropriated real estate. Therefore, according to the new expropriation regime, the value of the real estate should be determined by the expert appraiser acting in accordance with the regulations that are still to be adopted. The parties shall have the right to appoint the expert appraiser unanimously, only in case of failure of their agreement, an expert appraiser from the list of appraisers for the area where the real estate is located, shall be appointed. The latter is explained that as a local person, the appraised knows the local situation.

Other material amendments are the following:

  • The contents and attachments to the application for expropriation is being set in detail. In case when an applicant fails to provide all the required documents, he will be called to submit the missing documents, and in case he fails, the application shall be rejected. However in case when the missing document is the one referring to terms and price for the real estate (forming part of the all real estate comprised by a respective location permit) for which it settled with the owner, the investor is facing a misdemeanour of app. EUR 10,000 for legal entity.
  • It is being expressly stated that the decision on determination of the project being of interest for the Croatia is an administrative act, and it can be contested by means of an administrative lawsuit;
  • Because of its importance, the Expropriation Resolution shall only be made following a site visit and a hearing;
  • A registry of expropriated real estate is being established in order to increase transparency. Amongst other information, the registry shall include information on the fee paid for expropriation.
  • It is being expressly stated that the owners of the building built without a valid construction or other adequate permit is not entitled to an expropriation fee for the building. Furthermore, it is stipulated that the expropriation proceedings shall be aborted until the final settlement of the matter according to the Act on Dealing with Unlawfully Constructed Buildings. We consider that the latter could be addressed in a more appropriate manner, e.g. the expropriation proceedings could be proceeded, the fee for the land paid to the owner immediately, whereas the fee for the building should be deposited in case where the appropriate request for legalisation was filed, and until the legalisation is not finally resolved.
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