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ILO Convention No 132 (ratified by the law published in
the SFRY Official Gazette No 52/73), which stipulates that
“Unless otherwise provided in an agreement applicable
to the employer and the employed person concerned,
one of the parts shall consist of at least two uninterrupted
working weeks” (Article 8);
The provisions of the current Labour Law stipulate that
severance payment in the case of redundancy is based
on the employee’s total years of employment service.
This means that a current employer that terminates an
employment contract by reason of redundancy is required
to make a severance payment not only for the
length of employment under the most recent employment
contract, but also for the period of the employee’s
service with previous employer(s). Such provisions, inter
alia, encourage potential employment discrimination
against older people, i.e. people with long work experience;
The length of the suspension measure up to 3 working
days (Article 170 of the Labour Law) is very short and inefficient
in most cases;
The employer is obliged to offer the employee an annex
to the employment contract even if that employee
is only temporarily and for a very short period of time
transferred to another appropriate job position – as required
by the needs of the work with that employer (e.g.
when performance is necessary to carry out the work of
an employee who is on vacation, short-term sick-leave,
etc.);
The only “disciplinary” measure stipulated by the Labour
Law is temporary removal of an employee from work;
According to Article 48 of the Labour Law, a general
manager may either conclude a management contract
(which does not constitute employment) or an employment
contract which is tied to his/her term of office,
which means that a general manager’s management
contract or employment contract may be automatically
terminated upon removal from the position in question.
However, it is not clear whether this may also apply to
companies that have a management board instead of
the general manager. Additionally, it is not clear whether
this may apply to executive directors who may also be
removed from their positions at any time, without any
reason whatsoever;
Overall, the provisions of the existing Labour Law reduce
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the flexibility in special forms of business engagement (as
it does not recognise staff leasing and limits possibilities
of engagement outside employment), which has a negative
impact on the employment rate and the increase in
the grey market.
the industry-Wide collective agreements
(for construction and construction materials
industry, and for agriculture, food, tobacco industry
and water management)
The recent conclusion of industry-wide collective agreements
for agriculture, food, tobacco industry and water
management, as well as for construction and construction
materials industry, came as an unexpected development for
employers performing their activity in these industries, but
not being members of the Association of Employers which
participated in the conclusion of the respective branch collective
agreements. Such employers found out about the
outcome of social dialogue only once these industry-wide
collective agreements were published and followed by the
decision of the Minister of Labour and Social Policy on the
extended application to all employers in the respective areas.
This way, employers who did not participate in negotiations
and the conclusion of these industry-wide collective
agreements were forced to abide by various obligations
prescribed by them. This raised new concerns among foreign
investors (some of them being the largest companies within
the respective industries), who had already objected to the
extended application of the GCA and addressed their criticism
to competent authorities on several occasions. Therefore,
all arguments previously raised against the extended
application of the GCA refer to the extended application
of the industry-wide collective agreements as well: (i) the
agreement of two parties can be extended to a third party
which did not participate in it, which creates additional legal
uncertainty in an already unstable Serbian market; (ii)
such extended application gave the industry-wide collective
agreements the legal status of a law without undergoing the
regular parliamentary procedure for passing a new law; (iii)
the decision on extended application is of a political nature,
and it is questionable if the legal requirements for its adoption
have been met; (iv) the content of the industry-wide collective
agreements is not in line with the principles of modern
market economy (e.g. determining the base salary based
on coefficient and minimum price of labour etc.).
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