Mistakes That Can Cost You A Fortune! Find Out How To Avoid A Labor Dispute In Serbia

If you are an employer, you must have felt uneasy about a labor dispute with an employee at least once, because once it knocks on your door, you will have no other choice but to struggle for a long and painstaking solution through the courts. The consequences of labor disputes are almost impossible to predict, and they can hit your entire business hard and cost a lot of money. That is why any prevention of labor disputes is better than any judicial settlement of them.

In order to prevent labor disputes, it is crucial to determine what may be causing them. Therefore, in the following article, we will look at some of the most common causes of labor disputes and tell you how you can prevent them.

  1. Illegal termination of the employment contract

Termination of the employment contract by the employer leaves the most room for labor disputes to arise. This kind of dismissal is, of course, allowed, but only if the conditions stipulated by the Labor Law (the “Law“) are met – that there is a justified reason for it and that the procedure stipulated by the Law is followed.

The law stipulates that a justified reason for termination of the employment contract by the employer exists when the employee:

  • does not achieve work results or does not have the necessary knowledge and abilities to perform the tasks he is working on;
  • committed a violation of the work obligation through his own fault;
  • does not respect work discipline.

Even when there is a justified reason for the termination of the employment contract, the employer is obliged to respect the right of the employee to defend themselves. More precisely, if the employee does not achieve work results, the employer is obliged to inform them in writing about the shortcomings in his work, to give them additional instructions, and to give them a deadline to improve their work. That is, if the employee violates their work obligations or does not respect work discipline through their own fault, the employer must warn them in advance of the existence of a specific reason for dismissal and allow them to express themselves about it.

Court practice is too rich with disputes in which the employee’s right to defense has been violated. Therefore, if you plan to cancel the employment contract of one of your employees, carefully study the procedure provided by the Law.

  1. Non-payment of salaries

It often happens that employers refuse to pay the employee’s earned salary or fail to pay the salary within the time limit provided by law. According to the Law, salaries are paid at least once a month, and no later than the end of the current month for the previous month.

Due to the violation of this right by the employer, the employee can initiate court proceedings by filing a lawsuit for the payment of unpaid wages.

  1. Non-payment of severance pay

The law stipulates that, if the employment relationship has been terminated due to retirement or because the employee has been declared technologically, economically, or organizationally redundant, the employee has the right to severance pay.

The severance pay in case of retirement of an employee is paid in accordance with the general act, and at least in the amount of two average wages in the Republic of Serbia. The amount of severance pay for an employee who is made redundant is determined by a general act or employment contract, with the fact that it cannot be lower than the sum of a third of the employee’s salary for each completed year of employment with the employer where he is entitled to severance pay.

We also draw attention to the fact that no one can waive the right to severance pay. Namely, in some cases, employers try to avoid paying severance pay by signing agreements with employees who retire or are made redundant, in which that person waives severance pay. However, the courts made a series of decisions confirming that no one can waive the right to severance pay, as well as the amount determined in the decision on termination of employment.

  1. Unused annual leave

An employee has the right to annual vacation in accordance with the Law and acquires the right to use it after one month of continuous work from the day the employment relationship with the employer is established.

An employee cannot waive the right to annual leave, nor can that right be denied or replaced with financial compensation – except in the case of termination of the employment relationship in accordance with the Law. With this, the employee will be able, if they did not use the annual vacation due to the fault of the employer, to claim compensation from the employer through the court.

P.S. Bearing in mind the possible omissions, consider hiring an expert in labor law matters who will help you to fulfill your obligations under the Law without any mistakes.

For more information on this or any other legal, tax, or business topic, feel free to write to us at [email protected] at any time or call us at phone number +381113281914 every working day from 08:30 to 16:30.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your AK STATT representative, or other competent legal counsel.

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