The aim of the research was to analyse the system of labour relations in the Republic of Croatia and to suggest possible directions for the development of labour legislation. Many profound changes that the Croatian economy, just like the economy of almost all countries in the region and the world, is going through, require a strong emphasis on the issue of employment security, but also the adjustment of the legal framework to new forms of work. The project study contains a description of the methodology, an analysis of the impact of labour legislation in Croatia and possible recommendations for improving this system based on the policy used in other European Union countries.