Serbia: Amendments to the Labor Law

Employment

Uroš Popović

Publisher: Bojović & Partners

The Labor Law has been substantially changed by its amendments which will come into force on 29 July 2014. The general conclusion is that these amendments represent a positive step in the Serbian labor legislation, in terms of flexibility as well as with regards to clarification of certain matters. Below is a short overview of some of the most important novelties, as well as the note on harmonization with these amendments.

Novelties 

Content of Rules on Organization and Systematization of Works and employment agreement – The mandatory content of these labor-related documents is somewhat changed comparing to the previous legal solution. The employers are now obliged to keep the employment agreement at the place where the employee works. 

Employment agreement on definite term – The maximum duration of employment agreement on definite term is now extended to 24 months, whereas in certain specific situations the duration may be even longer (within a newly established employer 36 months, for work on a specific project up to the end of this project, etc.). 

Annual vacation and paid leave – The employees may now use annual vacation in more than two parts. In case of termination of employment, the employer pays to the employee who did not use his/her annual vacation a remuneration for unused annual vacation. The decision on use of annual vacation may now be delivered in electronic form. Further to that, the total duration of paid leave is decreased from seven to five working days, excluding certain specific cases.

Past time work – Increased salary for past time work will be paid only for work spent in employment relationship with the current employer (including the employer precedent as defined by the law and the employer’s related entities). 

Calculation and record on salary – Calculation of salary may now be delivered in electronic form, and it represents an enforcement document on the basis of which enforcement proceedings can be initiated. The obligation that employee signs the record on salary is abolished. 

Severance payment in case of redundancy – Severance payment in case of redundancy termination is calculated on the basis of the period of employment within the current employer (including the employer precedent as defined by the law and the employer’s related entities), and not on the basis of the total period of employment as it has been the case until now. 

Notice period by employee – In case of unilateral termination of employment relationship by the employee, the notice period cannot be longer than 30 days. 

Termination of employment by employer – This part of the Labor Law has been regulated in a more detailed manner, primary with respect to précising certain termination grounds. In that respect, the law now prescribes certain most frequent breaches of work duty and work discipline, the termination due to failure to achieve work results, i.e. lack of required skills and knowledge is now regulated more thoroughly. Further to that, the subjective and objective terms for termination in these cases are increased to six month and one year. 

Measures for disrespect of work discipline and breach of work duty – By way of introduction of these measures the institute of discipline responsibility is reintroduced in the Serbian labor legislation. Instead of termination, the employer may impose a certain measure against the employee such as temporary suspension without salary, pecuniary penalty, warning notice. 

Decision process – Other authorized persons (e.g. lawyers) may decide on employmentrelated rights, obligations and liabilities. 

Extended application of collective agreements – The conditions for extended application of collective agreements to the employers which are not members of the respective employers’ organization are now stricter. Hence, it may be expected that extended application of collective agreements will become an exemption rather than a rule, as it was in the previous period. 

Labor inspection and penalties – Authorities of the labor inspection are more extensive in order to enable its overall supervision over application of the law, whereas the maximum amounts of pecuniary penalties for breach of certain provisions of the law are also increased. 

Other – There are also other important novelties with regards to distance work, working hours, salary, retirement severance payment, annex of employment agreement, working booklet, etc. 

Harmonization 

Within 60 days from coming into force of the subject amendments to the Labor Law the employers and the employees may enter into the new employment agreements or amend the current employment agreements. The same term applies for harmonization of the Rules on Organization and Systematization of Works. A similar obligation is prescribed with respect to collective agreements and work rules which continue to apply unless they contradict the subject amendments, but no longer than six months from coming into force of the subject amendments to the Labor Law.