Prime Minister Jadranka Kosor called upon the trade unions to return to the negotiating table, expressing hope that that would happen in the coming days. She added that the best place for dialogue was the Economic and Social Council.

Under the proposed bill, collective agreements would not be automatically extended as has been the case so far, but would be applicable for no longer than six months after their expiry, before the signing of a new agreement.

A notice period would be defined by the parties to the collective agreement, and if they fail to do so, the notice period would be one month.

The Minister of the Sea, Transport and Infrastructure, Bozidar Kalmeta, dismissed the view of trade union leaders that the amendments were abolishing the collective agreements.

"That's not true. The collective agreements are not being abolished, but the institute of extended application of the collective agreement after its expiry is being changed," Kalmeta said.

He cited cases of collective agreements that had expired 10 years ago still being applied.

"The amendments encourage negotiation. Both trade unions and employers are given an opportunity to negotiate within six months what's best for the workers and the companies," Kalmeta said.

Kalmeta said that the union leaders had been invited twice for talks on amendments to labour legislation, on May 12 and 27, but did not respond.

Prime Minister Kosor recalled that a year and a half ago the government had invited the social partners to sign an agreement on social partnership in time of crisis.

"The trade unions did not respond despite our repeated calls," Kosor said, noting that last year GDP declined by 5.8 per cent and that the conditions were no longer the same as they had been at the time of collective bargaining.

"The government will meet all its obligations before the amendments to the Labour Act take effect," the prime minister said.