Summary of significant changes in Labour Law of the Republic of Serbia by Živković Samardžic Law Office

by ZS Law

I – The Introduction

National Assembly of the Republic of Serbia on its session on July 18th, 2014 adopted the Law on Amendments to the Labour Law (hereinafter referred to as: the Act) which makes substantial changes to the Labour Law (”Official Gazette of the Republic of Serbia” no. 24/2005, 61/2005, 54/2009 and 32/2013) (hereinafter referred to as: LL), which is a framework law for labour relations in the Republic of Serbia.

The new Act enters into force on the eighth day after its publication in the Official Gazette of the Republic of Serbia [/29th of July 2014] and leaves employers in the Republic a deadline of 60 days from the effective date to harmonize its rules of organization and systematization of jobs and employment contracts with provisions of new Labour Law (”Official Gazette of Republic of Serbia” no. 24/2005, 61/2005, 54/2009, 32/2013 and 75/2014).

The employer can conclude an employment contract or annex to the contract with the employees who were prior employed to the entry into force of the Law, within 60 days from the date of entry into force of the Law, and this contract does not make employment relation, since it exists from before.

The provisions of the collective agreement or the employment Bylaw which are in force on the date of entry into force of the Act, an which are not contrary to Act, shall remain in force until the expiry of the collective agreement or the conclusion of a collective agreement, or the adoption of Employment Bylaw in accordance with the Act, and maximum of 6 months from the date of entry into force.

II – The most important innovations in the Act

The Act obliges employers with more than 10 employees to adopt Rules of the organization and systematization of job positions, and so far this obligation existed for employers with more than 5 employees.

An important novelty is that work for a definite period of time can take up to 24 months, by the conclusion of one or several employment contracts for a definite period of time. Exceptionally, an employment contract for a definite period of time may be concluded for a longer period, in the situations enumerated in the Act (e.g. for work on a project whose time is predetermined, no longer than until the end of the project).

The Act provides that the employee will be entitled to annual leave in a calendar year after a month of continuous work from the date of employment (up to now it was after 6 months). Employees will be able now to use annual leave in more than two parts (if agreed with the employer), but the first part must be used for at least two weeks. In the event of termination of employment, the employer shall pay the employee who did not use annual leave with compensation in lieu of annual leave.

Instead of 7 working days during the calendar year of paid leave, the employee now has 5 working days available.

The increased salary is abolished for working in shifts.

Increased salary for years of service now accounts only for the time spent working at the employer’s (and not for the full years of service), minimum 0.4% of the base.

An important change is that when an employee retires, severance pay shall be paid in the amount of not less than two times the average salary, instead of the current three.

Calculation of salary and salary compensation can be delivered to the employee in electronic form (this rule will take effect in 30 days of the Act coming into force). Salary and salary compensation is now the executive document, which the employee may bring into court proceedings for enforced payment.

The Act provides that severance benefits paid to an employee who is made redundant, cannot be lower than the sum-thirds of the employee’s salary for each full year of employment at an employer where he is entitled to severance pay. Until now, it was a sum of third of salary for each completed year of service for the first 10 years and a quarter of salary for each year of service over ten, for the entire length of service, not only to work with the employer to fire him.

The novelty is that the employee may be temporarily transferred to another job on the basis of the decision, without procedure for the annex offering and maximum 45 working days over a period of 12 months, but only if it is needed to get some work completed without delay.

The reasons for termination in the new Act are systematized differently and are provided with specific examples of violation of duty and violations of labour discipline. Measures are introduced for non-compliance with labour discipline that may be imposed by the employer in lieu of cancellation, under certain conditions, and these are: temporary suspension from work, a fine and a warning announcing the cancellation.

New are the terms in which the employer can terminate the employment contract: within a period of six months upon becoming aware of the facts constituting the grounds for termination (so far it was three months), i.e. within a period of one year following the occurrence of the facts constituting the grounds for termination (so far it was six months).

Certain categories of employees were previously protected from termination. Now the employer in Serbia can cancel the employment contract to employees who are active as representatives of employees, union members or participants in union activities. However, there is a prohibition of termination in this category if the contract is terminated because of these activities, or membership in a trade union.

The Act provides a new rule – if the court during proceedings concerning illegal termination determined that there were grounds for termination, but the employer has not complied with the procedure, the court will reject the request of the employee to return to work and for the damages he will award him the sum of six salaries.

Instead of 90 days, a new deadline to initiate a case before court by an employee against a ruling that he violated the right is 60 days from the date of delivery.

Act in a comprehensive way modifies the provisions of LL that extends the validity of collective agreements.

Penalties are also significantly stricter and can provide much stricter penalties for employers who violate provisions of the Act.

Finally, the Act changes the system of the employment booklet. Namely, the provisions of the LL on employment booklet and Labour Regulations booklet cease to be in force from 1th January 2016. Employment booklets issued until 31th December 2015 will continue to be used as a public documents.

III – The Conclusion

Considered as the reformist one, the Act regulate the issues of importance to the socio- economic status of employees, provides a legal framework for higher employment and investment in the economy, provides the execution of obligations to international financial organizations and performs harmonization with legal regulations of the European Union.

We are at your disposal for any additional information regarding the Act, as well as services related to harmonization of company’s documents with the Act.

In Belgrade on 23.07.2014

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