The referendum question, however, will not be about amendments to labour legislation, but will read: "Do you agree that a referendum must be called if so requested by 200,000 registered voters and that the time for the collection of the required number of voters' signatures should be 30 days?"

The referendum is to be held in mid-2011, after Croatia completes accession negotiations with the European Union, Prime Minister Jadranka Kosor said adding that her cabinet and the trade union federations would act together with intent to see to it that Croatia joins the EU.

With today's agreement, the trade unions have managed to strengthen direct democracy as we facilitate the holding of referenda, the federations' co-ordinator, Vilim Ribic, said after the meeting.

He said that the new conditions for referenda were in accordance with unionists' position and proposals made by PM Kosor and President Ivo Josipovic.

This solution will also motivate trade unions to be engaged in implementing the referendum on Croatia's accession to the EU and in its success, Ribic said.

As regards changes to the Labour Act, the government and the trade union federations signed an agreement settling all outstanding issues.

Thus, collective agreements can be cancelled only in the event of substantially changed economic circumstances, and the extended application of rules can last only one year after the expiry of collective agreements.

The government and unions are going to propose to employers the opening of negotiations on a General Collective Agreement.

The government undertook to set up specialised labour courts in one year's time.

Negotiations between the Kosor cabinet and unions on the country's grave economic and social situation are to last by Christmas.