Reform of labour legislation in Serbia: Labour Law changes adopted

Belgrade, 21.08.2014.
National Assembly of the Republic of Serbia has adopted the Law on Amendments to the Labour Law on its session from July 18th 2014. These amendments significantly change labour law, harmonizing it with EU law, allowing higher employment and investments and bringing more flexible labour law institutes.  

Government of the Republic of Serbia explained that the amendments to the Labour Law will contribute to the implementation of the fiscal policy of the Republic of Serbia, with a goal to promote domestic and foreign investments in the economy, reduce the ”black labour” and increase employment, reduce unnecessary administrative procedures, which do not contribute to securing and protecting the rights of employees but represent a significant cost to employers.

From the most important changes we highlight the following:

  • Employment for a definite period of time has been extended from 12 to 24 months. Exceptionally, a contract of employment for a definite period of time may exceed 24 months in the following cases:
    • if this is necessary for the replacement of a temporarily absent employee until his return;
    • for work on a project whose time is predetermined, up to the completion of the project and
    • employment with foreigner on the basis of work permit, no longer than the period for which the permit is issued.
  • The obligation to adopt Rulebook on job systematization is prescribed for the employers having 10 or more employees (5 or more was prescribed before this change).
  • Obligation to increase salary for each year of employment for 0.4% only for employment with the current employer (total employment time with all employers was taken before).
  • Paid leave was reduced from 7 to 5 working days.
  • There is no requirement to increase wages for work in shifts.
  • Severance pay for retirement has been reduced from three to two times the average wage.
  • Minimum wages for a business trip abroad are not prescribed anymore.
  • Calculation of the salary and wage compensation may be provided to the employee in electronic form.
  • The severance payment for surplus employees is calculated taking into account only the time employee spent with the last employer