September 07, 2009

Adopted New Employment Related Laws

In May 2009, Serbian Parliament enacted two new laws in respect to employment: 1. Law on Employment and Insurance in Case of Unemployment (“Official Gazette of the Republic of Serbia” no. 36/09) (hereinafter referred to as: the “Law on Employment”) which replaced the Previous Law on Unemployment (hereinafter referred to as: “Previous Law”), and 2. Law on Professional Rehabilitation and Employment of Handicapped Persons (“Official Gazette of the Republic of Serbia”, no: 36/09) (hereinafter referred to as: the “Law on Employment of Handicapped Persons”)

The Law on Employment regulates the measures regarding employment in Serbia, participants in the employment process, rights and obligations of unemployed persons and of employers, the active employment policy, the insurance in case of unemployment, employment abroad, etc.

The Law on Employment determines that employment activities are:

  • 1. Notification on possibilities and conditions for employment;
  • 2. Intermediation in employing in the Republic of Serbia and abroad;
  • 3. Professional orientation and counseling on career planning;
  • 4. Conduction of active policy employing measures;
  • 5. Issuance of work permits to foreigners and stateless persons;

The Law on Employment determines that the National Employment Service ("NES") and the employment agencies have the main role in employment in Serbia, conducting the activities such as: informing on potential employers' and employment conditions, intermediation in employment, professional orientation and career counseling, execution of the active employment measures and issuance of the work permits for foreigners working in Serbia.

Additionally, NES is competent for insurance in case of unemployment, keeping records on employing etc. NES is also obliged to provide the employer and unemployed person with the information on regulations in force and rights, obligations and liabilities of employer and employee and theirs associations related to employing and insurance within the period of unemployment as well as the advices on method and procedure of realization of relevant rights and fulfillment of obligations thereof.  

An employment agency may be established by the individuals and legal entities and it must obtain a permit from the competent Serbian Ministry in order to start conducting its business operations.

Unlike Previous Law, this Law on Employment precisely defines the rights and obligations of unemployed persons and of the employer.

Rights and obligations of unemployed persons - Unemployed person has generally the following rights: rights before NES in respect of his/her employment, rights to participate in programs and measures of active employment policy, rights related to the insurance in case of unemployment, etc. The obligations of the unemployed person are to actively look for employment, to set their own individual employment plan with NES, to participate in the active measures of employment policy, not to refuse offered adequate employment and adequate education and training, etc.

The Law on Employment also defines the rights and obligations of an employer. The employer has rights to chose whether it wants to employ person with or without provided services of the NES or agencies and to select freely the persons it wants to employ. This Law on Employment introduces the possibility of an employer to participate in the programs and measures of active employment policy.

In respect to employer's obligations, the Law on Employment determines that the employer is obliged to secure the equal treatment for persons that have responded to an invitation for job interview. The employer also has the obligation to inform the NES on every job interview which involves unemployed person.

Insurance in case of unemployment - This right includes the financial assistance for certain period of time, health, pension and disability insurance, as well as other rights in compliance with the Law and general act of NES. Compared to the Previous Law, adopted solutions regarding financial assistance are more restrictive in respect to entitlement to financial aid, length of its payment and its amount. Thus, the employees whose employment has been terminated on the basis of mutual agreement initiated by the employer are not anymore entitled to receive the financial assistance. Also, the amount of financial assistance, for its whole duration, is now limited to 50% of the employee's average salary in the six months prior to termination. Finally, unlike Previous Law, the new Law on Unemployment determines that the amount of financial assistance cannot exceed 160% or be lower than 80% of minimal income determined in the Republic of Serbia.

Depending on the years of unemployed person's insurance, the Law on Unemployment determines the following durations of financial assistance:

  • 3 months for 1 to 5 years;
  • 6 months for 5 to 15 years;
  • 9 months for 15 to 25 years;
  • 12 months for period longer than 25 years;
  • 24 months if unemployed person needs 2 years of insurance to fulfill the conditions for retirement (new law).

During the period of financial assistance, the unemployed person is also entitled to health, pension and disability insurance. The basis for payment of these contributions is the amount of financial assistance, while their calculation and payment is conducted by the NES.

The Law on Unemployment also contains provisions on the procedure for employing Serbian citizens abroad. It determines that it is conducted on the basis of reporting the need for employment abroad, submitted to the competent Ministry, NES or Agency. NES or Agency can intermediate in employment abroad in the same manner as intermediating for employment within Serbia. Their obligation is also to ensure protection of Serbian citizens who are employed abroad. This protection assumes that the Serbian employee abroad enjoys minimum the same labor/employment treatment as the citizens of the country where he/she is working, during whole duration of that employment. Additionally, obligations regarding protection of Serbian citizens working abroad include ensuring the following: work and residency permit abroad, expenses related to health checks and issuance of certificate on health capability, transportation expenses, informing on living and working conditions, etc.

The Law on Employment of Handicapped Persons has introduced the obligations to the employers to employ handicapped persons starting as of May 23, 2010, in the following manner:

  • - Every employer who has between 20 - 49 employees has to employ minimum two persons with handicap;
  • - Employer who has more than 50 employees is obliged to employ minimum two persons with handicap, and for starting each following 50 it should employee one person with handicap