Mistakes That Can Cost You A Fortune! Find Out How To Avoid A Labor Dispute In Serbia
📍 labor disputes Serbia, 📍 employment termination, 📍 unpaid wages, 📍 severance pay Serbia, 📍 employee rights, 📍 labor law Serbia
Labor Disputes in Serbia: Why Prevention Matters
If you’re an employer in Serbia, chances are you’ve worried about the risk of a labor dispute. Once a claim is filed, there’s often no quick or easy resolution—just a long, costly legal battle that can damage your business reputation and finances.
The truth is, labor disputes are difficult to predict and even harder to control. That’s why preventing them is always better than resolving them in court.
To help you stay one step ahead, we’ll walk you through the most common causes of labor disputes and show you how to stay legally compliant and avoid them altogether.
1. Illegal Termination of Employment
Termination of an employee is the leading cause of labor disputes. While the Labor Law allows employers to dismiss employees, strict conditions and procedures must be followed.
When is termination justified?
According to the Law, a justified reason for dismissal exists when the employee:
Fails to meet work performance expectations
Lacks the necessary qualifications or skills
Violates work obligations through personal fault
Disregards work discipline
Even if one of these reasons applies, the employer must respect the employee’s right to defend themselves.
- ✅ You must notify the employee in writing about the issue
- ✅ Provide specific instructions and a reasonable deadline to correct performance
- ✅ If it’s a disciplinary matter, you must warn them and allow a response
⚠️ Court decisions in Serbia repeatedly show that violations of an employee’s right to defense lead to employer liability.
2. Non-Payment of Salaries
Failing to pay salaries on time—or at all—is one of the most direct paths to a labor lawsuit.
Under Serbian labor law:
Salaries must be paid at least once per month
Payment must be made no later than the end of the current month for the previous one
If you violate this rule, the employee can file a lawsuit for unpaid wages, and you may face interest charges, penalties, and court fees.
3. Non-Payment of Severance Pay
Severance pay is not optional—it is a legal right in cases of:
Retirement
Redundancy due to economic, technological, or organizational changes
How much severance must you pay?
For retirement: At least the equivalent of two average monthly salaries in Serbia
For redundancy: At least one-third of the employee’s salary for every full year of service
⚠️ Some employers try to avoid this obligation by having the employee sign a waiver. But under Serbian law, no one can waive the right to severance pay, and courts regularly invalidate such agreements.
4. Unused Annual Leave
All employees in Serbia are entitled to paid annual leave, which becomes available:
After one month of continuous work from the start of employment
The law strictly prohibits:
Waiving the right to annual leave
Substituting leave with financial compensation (except at termination)
⚠️ If the employee misses their vacation due to the employer’s fault, they can file a claim for financial compensation in court.
How to Avoid a Labor Dispute
If you want to protect your business and reputation, here’s what to do:
- ✅ Follow the legal procedure before terminating any employee
- ✅ Pay salaries on time, every time
- ✅ Ensure severance payments comply with legal minimums
- ✅ Track and grant all annual leave entitlements
- ✅ Never ask employees to sign waivers of their legal rights
- ✅ Consult a labor law expert before taking disciplinary action
Final Thought: Compliance Saves You More Than Court Ever Can
Labor disputes are expensive, time-consuming, and damaging. By staying informed and acting in line with the law, you can protect your business from unwanted lawsuits and financial penalties.
⚖️ Need Expert Labor Law Guidance?
Contact STATT – Stojković Attorneys
📍 Cara Dušana 55/3, 11000 Belgrade, Serbia
📧 [email protected]
📞 +381 11 328 1914
🌐 www.statt.rs
📘 Ultimate Guide to Serbian Labour Law – Don’t Miss It!
If you’re running a business in Serbia and want to stay compliant with employment regulations, the “Ultimate Guide to Serbian Labour Law” is your go-to resource. It breaks down everything you need to know—from hiring and contracts to termination, leave entitlements, and dispute prevention—all in one clear, easy-to-follow guide.
Stay informed, stay compliant: 👉 Ultimate Guide to Serbian Labour Law