"We got a good basic collective agreement with very few rights having been restricted. Practically, we were only left without Christmas bonuses for one year, as these funds are to be allocated to the unemployed," the leader of the trade union of workers in the health and social welfare sector, Spomenka Avbersek, said after talks in the government's offices.

Finance Minister Ivan Suker and Transport and Infrastructure Minister Bozidar Kalmeta also expressed satisfaction with the deal.

Kalmeta said that after the recent skirmishes about a referendum on amendments to labour legislation, the time had come for reconciliation between the government and the unions in the light of the prospective resumption of the work of the Economic and Social Council (GSV).

Under the new basic collective agreement, the unions will give up their Christmas bonuses for this year, amounting to HRK 1,250 per employee (170 euros). The money envisaged for Christmas bonuses will go to the unemployed.

Public sector workers will keep their holiday cash grants and children's bonuses.

In return, the government accepted that the new basic collective agreement should last three years and that it cannot be cancelled unless economic circumstances change significantly, such as in case of a further deepening of the current economic crisis and further GDP decline.

The government scrapped a motion under which the collective agreement could also be cancelled due to fiscal circumstances, such as in case of declining budget revenues.

The unions accepted that travel expenses would no longer be paid for workers who live less than one kilometre from their workplace.

The basic collective agreement for the public sector expired on July 31, and the government and union negotiating committees resumed negotiations on a new agreement recently.