What you should know about temporary employment

Employment contract for definite period

 

The employer and the employee can conclude an employment contract for an indefinite or definite period. According to the Labor Law (“Official Gazette of RS”, no. 24/2005, 61/2005, 54/2009, 32/2013, 75/2014, 13/2017 – decision of the CC, 113/2017 and 95/2018 – authentic interpretation, “Law“), the general rule is that the employment is established on an indefinite period if the contract does not define the time for which it is concluded.

 

Therefore, an employment contract for a definite period is an exception to the rule, and the conditions for concluding a contract are prescribed by Law. International labor standards provide for more flexible forms of work and employment. This was, among other things, due to increased mechanization, new production systems and the labor requirement with the development of technology. Consequently, contracts for a definite period are increasingly present in the regulation of employment. In this way, employers have the opportunity to avoid the dismissal procedure and its costs, and at the same time, to satisfy their needs.

 

Conditions for concluding an employment contract for a definite period

 

An employment contract may be concluded for a definite period, for the establishment of an employment whose duration is determined in advance by objective reasons that are justified by the deadline or execution of a certain job or occurrence of a certain event, for the duration of those needs. The employer may conclude one or more employment contracts for a definite period on the basis of which the employment with the same employee is established for a period that cannot be longer than 24 months with or without cease. A cease is considered to be a period of 30 days or longer. This is a very important legal provision because it specifies that an employment for a definite period with the same employee can last a total of 24 months, regardless of the number of contracts signed, possible change of job description and the like. In case of cease between two contracts lasting less than 30 days, the cease itself is calculated within 24 months period. Therefore, after the expiration of a total of 24 months of employment for definite period with one employee, the employer can choose between two options: termination of employment or the establishment of employment for an indefinite period.

 

Cease longer than 30 days, changes in job descriptions and similar measures that employers sometimes apply in practice in order to extend an employment for a definite period beyond the legal maximum period are not allowed by Law.

 

However, the Law prescribes exceptions to the rules and provides for the possibility of concluding an employment contract for a definite period for a period longer than 24 months if:

 

1) it is necessary due to the replacement of the temporarily absent employee, until his return.

 

Replacement of a temporarily absent employee, until his return to work, is done in situations when it is known that the permanently employed person will be absent from work for some time for reasons such as e.g. maternity leave, childcare leave, public office, temporary incapacity for work due to illness, etc. The person engaged in these jobs will work until the return of the absent worker, or until the absent worker’s employment is terminated, e.g. if the employee terminates the employment contract.

 

2) it is necessary to work on a project whose duration is determined in advance, no later than the end of the project;

 

If an employment contract for a definite period is concluded in relation to the realization of a specific project that is limited in time, it is possible to sign an employment contract for a definite period that will last until the end of the project, even if the project lasts longer than 24 months. Therefore, if it is not possible to determine in advance the duration of the contracted work within the project, there is no legal impediment to stating in the contract that the employees will perform the work as long as the need to perform those work lasts, until the end of the project. Therefore, the Law prescribes the possibility to conclude employment contracts for a definite period for a period longer than 24 months, but their duration is limited to the period up to the end of the project, which means that contracts within that period, by the end of the project, can also be terminated earlier.

 

The Ministry of Labor, Employment, Veteran and Social Affairs, Labor Sector interprets and explains in more detail what is considered a project in terms of the Law: “Although the Labor Law does not define what is considered a project that is the basis for an employment for a definite period, except the fact that the duration of the project should be limited in advance, we believe that the project can be considered a unique process composed of a series of activities, with pre-defined general and specific objectives, deadlines for their implementation, as well as human, financial and other resources.

 

The project defines general and specific goals in advance, identifies activities that contribute to achieving the goal, as well as human and financial resources for project realization, which are provided by the project holder or from other sources. At the same time, we believe that the project holder should meet all the conditions for its realization, including the necessary human resources, and can exceptionally establish an employment for a definite period with persons to work on the project only if for certain activities or jobs does not have employees who possess the necessary qualifications or if the employer does not have a sufficient number of employees needed to work on the project.

 

We point out that in each specific case it is assessed what the project is considered to be and whether certain activities, ie jobs are related to the project realization.” (Opinion of the Ministry of Labor, Employment, Veterans and Social Affairs, Labor Sector, No. 011-00-103 / 2017-02 from 10/02/2017).

 

3) the contract is concluded with a foreign citizen, on the basis of a work permit, no later than the expiration date of issued permit;

It is also possible to conclude an employment contract for a definite period with a foreign citizen for a period longer than 24 months, but no longer than the expiration of the period for which the work permit was issued in the Republic of Serbia.

 

4) the contract is concluded for work on jobs with a newly established employer whose registration with the competent authority at the time of concluding the employment contract is not older than one year, for a period whose total duration does not exceed 36 months;

 

Newly established employers have the opportunity to conclude an employment contract for a definite period with employees lasting up to 36 months. Newly established employers are considered to be legal entities and entrepreneurs who have been registered for a maximum of one year. Only in the first year from the day of registration, they have the opportunity to conclude one or more employment contracts for definite period with the same employee, on the basis of which an employment for a definite period can last up to 36 months. After the expiration of one year from the day of registration, the legal entity and the entrepreneur are no longer considered newly established employers.

 

5) a contract is concluded with an unemployed person who lacks up to five years until the fulfillment of one of the conditions for exercising the right to an old-age pension, the longest until the fulfillment of the conditions, in accordance with the regulations on pension and disability insurance.

 

With an unemployed person who lacks a maximum of 5 years of pension experience until one of the conditions for old-age pension is met, an employment contract for a definite period may be concluded until the conditions for old-age pension are met for a period longer than 24 months, but for a maximum period of 5 years.

 

The employer is allowed to conclude a new employment contract for a definite period with the same employee after the expiration of the period specified in the case under 1), 2) and 3), on the same or other legal basis.

 

This practically means that after the expiration of the period for which an employment contract for definite period was concluded in order to replace a temporarily absent employee, due to work on a project whose time is determined in advance, ie after the end of the contract with a foreign citizen, it is possible to conclude a new employment contract for definite period of time with the same employee, in accordance with the Law. For example, it is allowed, after the completion of a certain project, to conclude an employment contract for a definite period of time with the same employee to work on another project, or to replace a temporarily absent worker.

 

When and how does an employment contract for a definite period become a permanent employment?

 

If the employment contract for a definite period is concluded contrary to the provisions of this Law or if the employee remains to work for the employer for at least five working days after the expiration of the time for which the contract was concluded, the employment is considered to be based on indefinite time. In order to preserve the right to work as a fundamental human right, international standards express a desire for permanence of employment. Permanent employment is the rule, and employment for a definite period is the exception. Due to that, the Law also limited the duration of employment for a certain period of time with the same employer on the same jobs to a period of 24 months. Therefore, we distinguish two possibilities for the transformation of an employment contract for a definite period into a permanent employment.

 

The first legal situation that leads to employment for an indefinite period of time is when the employee establishes employment for a definite period of time outside the cases when it is possible by Law. This usually happens if he performs permanent jobs provided for in the act on job systematization, as well as employees for an indefinite period of time, and the employer still signs an employment contract for definite period, as if they were jobs that are limited in time, or whose duration is predetermined with objective reasons. Although many companies use employment contracts for definite period for “projects” related to their ongoing activities, the Law does not allow an employment contract for a definite period to be used to fill jobs related to the company’s ongoing operations. This is also confirmed by the Supreme Court of Cassation in Decision Rev2. 2912/19 of 21 October 2020: “When assessing the existence of conditions for the transformation of employment from a definite to an indefinite period of time, it must be assessed what work the employee actually performed, because that fact has precedence over what is written in the employment contract for definite period. “. In the explanation, the court states that it is important to evaluate the work that the employee actually performs and determine whether these jobs are defined by the act on job systematization with the employer, and in the case of an affirmative answer it is concluded that there is a constant need for specific employee, so permanent employment with an employee is mandatory.

 

Another possibility exists when the employee, in accordance with the Law, has established an employment for a definite period, and after the expiration of that time he continues to work for at least five working days, and the employer does not inform him about the termination of employment. Then, the originally established employment for a definite period grows into an employment for an indefinite period, on the first day after the expiration of the term. Therefore, it is necessary to cumulatively meet two conditions for the transformation of an employment contract for a definite period into an employment for indefinite period: that the employee whose employment contract for a definite period has expired continue to work for the employer for at least another 5 working days and that the employer did not deliver the decision on termination of employment to the employee.

 

In circumstances in which the employee did not continue working after the expiration of the employment contract for a definite period, the employment terminates automatically on the day of the expiration of the employment contract, and it is not necessary for the employer to decide on that by a decision. This was confirmed by the Court of Appeals in Nis in the decision Gž1. 1355/18 of 1 June 2018: “Transformation of an employment for a definite period into an employment for indefinite period occurs according to the law itself, if the employee continues to work for at least five working days after the expiration of the agreed period, ie for more than 24 months on the same or similar jobs, on the same basis, in which case the employee can protect his right with a lawsuit to determine the employment for an indefinite period. ”

 

For the sake of legal security, employers usually make a decision on termination of employment, stating the expiration of an employment contract for a definite period as a reason for passing, but this act is not obligatory and is declarative, because employment actually terminates by Law after the expiration of the period it was established on. Employers make such decisions so that there would be no doubts about the termination of employment, but basically it is enough that after the expiration of the employment contract for a definite period, the employer deregisters from the Central Registry of Compulsory Social Insurance and provides proof to the employee. If the nature of employment for a definite period is such that it is not possible to determine the exact date of termination of employment in the employment contract itself, but these are determinable circumstances, the employer is obliged to make a decision on termination of employment and deregister from social insurance.

 

However, if an employee whose employment for definite period has expired continues to perform his / her work obligations and regularly performs his / her tasks for at least five working days after the expiration of the employment contract for a definite period, and the employer does not object, it is considered that the employer tacitly agreed that the employee may continue to work, for an indefinite period of time. If the employer subsequently tries to deny that right to the employee, the employee may seek through the court to establish the existence of an employment relationship for an indefinite period of time, even though no special employment contract has been concluded.

 

After the expiration of the employment contract for definite period

 

There are two ways to extend an employment relationship based on an employment contract for a definite period. The first way is to conclude an annex to the employment contract, which will be an integral part of the contract which established the employment with the employee, but only within the period of 24 months of hiring the same employee. In this case, continuity of employment is ensured.

 

Another way is to conclude a new employment contract for a definite period, instead of doing so through an annex to the previous contract. The employment contract which establishes the employment also determines the type of employment, for an indefinite or definite period. In the case of an employment contract for a definite period, the duration of the contract is limited in advance to 24 months in total, unless these are the exceptions we discussed earlier. A new employment contract for a definite period with the same or other jobs represents a new employment, regardless of whether the employment was established immediately on the day following the day of termination of the previously established employment.

 

Employee protection

 

Misuse of an employment for a definite period means that the employer concludes employment contracts for a definite period with the employee, even though there is no legal basis for that, and it is evident that the need for that employee’s work is constant.

 

A person who performs work on the basis of an employment contract for a definite period concluded contrary to the provisions of the Law should contact the Labor Inspectorate and initiate a labor dispute with a lawsuit to determine the existence of an indefinite employment relationship, all in order to protect their legal rights.

 

If the employment was terminated due to the expiration of the employment contract for a definite period, and before that there was a minimum of 12 months of uninterrupted work experience or 12 months of interrupted service in the last 18 months, the former employee is entitled to money benefits that he can realize at competent branches of the National Employment Service within 30 days from the date of termination of employment, in accordance with the Law on Employment and Unemployment Insurance (“Official Gazette of RS”, No. 36/2009, 88/2010, 38/2015, 113/2017, 113/2017 – other law and 49/2021). This benefit has the character of financial help to an unemployed person while actively looking for a job, and its purpose and goal is to help a person to overcome the period of unemployment more easily and return to work as soon as possible.

 

Special protection against termination of employment during pregnancy and maternity leave

 

There is a legal rule according to which the employer cannot terminate the employee’s employment contract during pregnancy, maternity leave, leave from work for child care and leave from work for special child care, regardless of whether it is a contract for definite or indefinite period. An employee who has established an employment contract for a definite period, it is extended until the expiration of the use of the right to leave by force of Law. The decision on termination of the employment contract is null and void, and does not produce legal effect, if on the day of the decision on termination of the employment contract the employer was aware of the circumstances listed or if the employee within 30 days from the date of termination notifies the employer the existence of these circumstances and submit an appropriate certificate from an authorized doctor or other competent authority.