Status of Employee

Serbian labour legislation generally does not differentiate between blue-collar and white-collar workers, men and women or domestic citizens and foreigners. Whether employed as general managers or production machine operators, all employees are uniformly subject to the provisions of the Serbian Labour Law (Zakon o radu, Official Gazette of the Republic of Serbia, Nos 24/2005, 61/2005, 54/2009, 32/2013, 75/2014, 13/2017, 113/2017, 95/2018 – authentic interpretation and 109/2025 – other law) (the “Labour Law”) regarding fundamental labour institutes, including minimum wage, minimum rest and leave periods, termination conditions, employee protection, etc. However, the Labour Law also recognises engagement models that do not establish an employment relationship, meaning that the mandatory minimum protections afforded to employees do not apply. Work performed outside an employment relationship may take place through temporary and occasional work, service contracts, professional training and development and supplementary employment.

Additionally, labour legislation recognises the concept of an assigned employee – a natural person who enters into an employment relationship with a temporary employment agency for the purpose of being temporarily assigned to a beneficiary employer to perform work under its supervision and management. Although regulated by a separate Law on Agency Employment (Zakon o agencijskom zapošljavanju, Official Gazette of the Republic of Serbia, No 86/2019), the assigned employee’s position in relation to the agency, as their formal employer, is subject to general mandatory provisions. At the same time, their actual work at the beneficiary employer is subject to the obligation of ensuring equal treatment with a comparable employee directly employed by the beneficiary employer.

Regardless of the aforementioned distinctions, given that both instances in essence refer to employees, labour legislation generally does not classify employees into different categories and instead strives for the unification of their legal status.

Employment Contracts

In Serbia, an employment relationship may only be established through an employment contract. The contract must be concluded in writing before the employee commences work and becomes valid and binding once signed by both the employer and the employee.

Types of Employment Contracts

Serbian labour legislation recognises various types of employment contracts. Depending on the terms stipulated in the contract, the material position of the employee will vary. Therefore, with certain reservations, the classification of employees mentioned earlier may be determined according to the type of employment contract concluded. Based on the relevant criteria, Serbian labour legislation distinguishes between the following types of employment contracts outlined below.

Duration of the Contract

• Indefinite-Term Employment Contract: As a general rule, employment contracts are concluded for an indefinite term. If the contract does not specify its duration, it is deemed to have been concluded for an indefinite term.
• Fixed-Term Employment Contract: A fixed-term contract may be concluded where its duration is justified by objective reasons, such as a specific deadline, completion of a project or occurrence of a particular event. Fixed-term employment generally cannot exceed 24 months. Exceptions apply, among others, to the replacement of temporarily absent employees, project-based work, foreign employees, newly established companies and employees who are within five years of retirement eligibility.

Working Hours Duration

Employment contracts are either full-time or part-time.

Place of Work

• Work at Employer’s Premises: This represents the standard form of employment contract.
• Work Outside Employer’s Premises: This form establishes an employment relationship for performing work outside the employer’s premises, either as remote work or working from home. Contracts for work outside the employer’s premises must contain additional provisions concerning working hours and performance standards, supervision and quality control, equipment provided by the employer, the use of the employee’s own equipment and reimbursement of related expenses.

The Labour Law also recognises certain specific forms of employment. These include internship contracts, under which an intern may receive 80% of the basic salary applicable to the relevant position, and domestic worker employment contracts, under which up to 50% of the basic salary may be paid in kind.

Mandatory Terms of the Employment Contract

Pursuant to the Labour Law, each employment contract shall contain the following elements:

• business name and registered seat of the employer;
• full name and place of residence (or temporary residence) of the employee;
• type and level of education or professional qualification required for the position;
• job title and job description;
• place of work;
• type of employment (indefinite or fixed-term);
• duration of a fixed-term employment agreement and the legal basis for its conclusion;
• date of commencement of work;
• working hours (full-time, part-time, or reduced working hours);
• amount of base salary as of the date of agreement conclusion;
• elements for determining base salary, performance-based compensation, salary compensation, increased salary, and other employee entitlements;
• deadlines for salary payments; and
• duration of daily and weekly working hours.

Working Hours

The Labour Law recognises different types of working hours:

• Full-time work generally consists of 40 hours per week. The employer’s Work Rules may prescribe shorter full-time working hours, but not less than 36 hours per week. As a standard workweek consists of five working days, employees usually work eight hours per day.
• Part-time work means working fewer hours than full-time employees. Part-time employees are generally entitled to salary and other employment-related rights in proportion to their working hours. However, certain rights may be regulated differently by law, the employer’s by-laws or the employment contract. The employer must provide part-time employees with the same working conditions as comparable full-time employees.       
• Reduced working hours apply to particularly demanding, strenuous or hazardous jobs where an increased health risk remains despite appropriate occupational health and safety measures. Working hours may be reduced proportionally to the harmful effects of such work by up to ten hours per week.

Overtime

Overtime work is permitted in circumstances prescribed by law but may not exceed eight hours per week. In addition, an employee’s total working time, including overtime, may not exceed 12 hours per day.

Overtime must be compensated by an increased salary of at least 26% of the employee’s basic hourly salary. Employees cannot waive their statutory rights relating to overtime work.

Work Schedule and Redistribution of Working Hours

The employer determines the work schedule, which generally consists of five eight-hour working days per week, although a different schedule may be introduced due to operational needs.

Employees must be informed of their work schedule and any changes at least five days in advance, except in the case of overtime work.

Working hours may also be redistributed for business or organisational reasons, provided that average weekly working hours over a six-month period do not exceed the agreed working hours. During redistribution, employees may work up to 60 hours per week without such hours being considered overtime.

Night Work and Shift Work

Night work is work performed between 22:00 and 06:00. Shift work involves employees alternating according to a predetermined schedule. Where shift work includes night work, employees may not work night shifts continuously for more than one working week unless they consent to a longer period.

Wages

Payment of the minimum wage represents an exception and must be justified by the employer’s general act or the employment contract.

The minimum hourly wage is determined annually for the entire territory of Serbia by the Social and Economic Council or, if it does not reach an agreement within the prescribed period, by the government.

The minimum wage currently amounts to RSD371 net per working hour (approximately EUR3.16). The employee’s monthly minimum wage therefore depends on the number of working hours in the relevant month.

Mandatory Wage Increase and Other Mandatory Payments Beyond Wages Increases

The Labour Law provides for mandatory wage increases in the following cases and amounts:

• For work performed on a public holiday, which is otherwise a non-working day, the employee is entitled to an increase of at least 110% of the base wage.
• For night work, where the work is not already included in the basic wage, the employee is entitled to an increase of at least 26% of the base wage.
• For overtime work, the employee is entitled to an increase of at least 26% of the base wage.
• Employees are also entitled to a seniority allowance based on their length of service with the employer, amounting to at least 0.4% of the base wage for each full year of employment.

Mandatory Payments

The Labour Law also provides for the following mandatory payments in addition to wages:

• a severance payment upon retirement, amounting to at least two average monthly salaries;
• compensation for funeral expenses in the event of the death of a close family member, as well as compensation to close family members in the event of the employee’s death; and
• compensation for damage resulting from work-related injuries or occupational diseases.

Additionally, the employee is entitled to reimbursement for the following expenses:

• commuting expenses (equivalent to the price of a public transportation ticket, unless the employer provides its own transport);
• per diem allowances for business trips within Serbia;
• per diem allowances for business trips abroad;
• accommodation and meal expenses during fieldwork if the employer does not provide these without charge;
• meal allowance during work unless provided in another form; and
• annual leave allowance.

Wage Compensation

Employees are entitled to wage compensation based on their average wage from the previous 12 months for certain absences, including holidays, annual leave, paid leave and compliance with public authority orders. Sick leave compensation is generally 65% of the average wage (but not below the minimum wage), or 100% in cases of workplace injury or occupational disease.

Wage Protection

Serbian labour legislation protects wages, and any wage reduction must follow prescribed legal procedures. Deductions from wages may be made only on the basis of a final court decision, where provided for by law, or with the employee’s consent, and may not exceed one-third of the employee’s wage.

Annual Leave

In accordance with the Labour Law, employees are entitled to at least 20 days of paid annual leave per year, which may be extended under the employer’s Work Rules or employment agreement. The right to annual leave is acquired after one month of continuous employment, with employees earning one-twelfth of their annual entitlement for each month worked.

Annual leave can be taken in one, two, or multiple parts. If used in parts, the first portion must last at least two consecutive workweeks and must be used within the same calendar year, while the remaining days must be used no later than 30 June of the following year.

Employees cannot waive or be denied annual leave, nor can it be replaced by financial compensation, except upon termination of employment, when the employer must compensate unused leave days.

Public Holidays

According to the Law on State and Other Holidays (Zakon o državnim i drugim praznicima u Republici Srbiji, Official Gazette of RS, No 43/2001, 101/2007 and 92/2011), the number of non-working public holidays varies annually. Fixed public holidays include 1, 2 and 7 January, 15 and 16 February, 1 and 2 May and 11 November, while Easter holidays are also non-working days. Employees are entitled to leave for their respective religious holidays, and those working on public holidays are entitled to increased pay.

Paid Leave

The Serbian labour system recognises paid leave in addition to annual leave and public holidays. Employees are entitled to up to five working days of paid leave for certain personal circumstances, five days in case of the death of an immediate family member, and two days for each blood donation.

Unpaid Leave

Unpaid leave is not a statutory entitlement in Serbia but may be granted at the employer’s discretion. During unpaid leave, employment rights and obligations are suspended unless otherwise provided by law or the employment agreement.

Sick Leave

Employees in Serbia are entitled to sick leave and wage compensation whenever they are unable to work due to illness or injury, without any predefined limitations.

Under the Labour Law, there are no restrictions on the total duration of sick leave, as long as the employee is genuinely ill or injured, this has been confirmed by a physician or after 30 days of leave by the medical commission, and the employer has received proper medical documentation covering the period of absence.

In cases of extended inability to work, an employee must be referred to a disability commission if they have been continuously unable to work for six months or have accumulated 12 months of sick leave within 18 months. The commission assesses the employee’s work capacity and determines further steps.

Maternity Leave, Paternity Leave, and Special Care Leave

The Labour Law grants maternity leave to pregnant employees, which includes:

• pregnancy leave, starting between 45 and 28 days before the due date (based on a medical certificate) and lasting until three months after childbirth; and
• childcare leave, starting immediately after the end of pregnancy leave.

For a first or second child, pregnancy leave and childcare leave jointly last for a total of 365 days. For a third child or subsequent children, the combined leave lasts for two years. In both cases, compensation during leave is fully covered by the state.

As an exception, the father may use maternity leave (ie, paternity leave) if the mother abandons the child, dies, or is unable to use maternity leave for a justified reason, such as illness or imprisonment.

The Labour Law also entitles adoptive parents of a child under five years old to up to eight months of leave, during which salary compensation is provided.

Either parent of a child requiring special care due to a serious illness may take full- or part-time leave until the child reaches five years of age, with compensation paid by the state. Parents, guardians, or caretakers of persons with certain serious conditions may also request part-time work of at least half of full-time hours.

Pregnant and breastfeeding employees enjoy special protection and are exempt from hazardous work, night shifts, and overtime that may endanger their health or the child’s health. Employers must provide suitable alternative work or paid leave if none is available. Pregnant employees are entitled to paid time off for prenatal check-ups. Employees returning within one year after childbirth are entitled to breastfeeding breaks or reduced working hours of 90 minutes per day, counted as working time and fully paid.

Employees on maternity leave are protected from termination, and the Labour Law explicitly designates pregnancy, maternity leave, childcare leave, and special childcare leave as protected periods during which employees cannot be dismissed.

Confidentiality

Confidentiality obligations are not regulated under the Labour Law but are typically addressed through employment contracts or separate agreements. In practice, they are widely used and often continue beyond the termination of employment.

Relevant to this issue is the Law on Protection of Business Secrets (Zakon o zaštiti poslovne tajne, Official Gazette of the Republic of Serbia, No 53/21) which provides that information is considered a trade secret if it is not generally known, has commercial value due to its secrecy, and if measures have been taken to preserve its confidentiality.

Breaching of Confidentiality Obligations

Breach of confidentiality obligations during or after employment may result in the employee’s liability for damages and, during employment, may also lead to disciplinary liability.

Non-Disparagement Requirements

A non-disparagement clause is not regulated under the Labour Law. In practice, this is not commonly addressed through clauses in employment contracts, although it is possible to do so.

Employee Liability

Employees are liable for damage caused to the employer at work or in connection with work, intentionally or through gross negligence. If several employees are responsible, each is liable for their share, or equally if the share cannot be determined. Employees who cause damage through a premeditated crime are jointly and severally liable. The employer determines the existence and amount of damage and compensation, while the court decides if the damage is not compensated.

Non-Competition Clause

Under the Labour Law, an employment contract may include a non-compete clause prohibiting an employee from performing certain activities without the employer’s consent. Such clauses are common but are permitted only where the employee gains significant technological knowledge, a network of business partners, or important business information and trade secrets.

The territorial scope of a non-compete clause may be determined by the Work Rules or employment agreement, with no statutory geographical limits. The obligation may last up to two years after termination of employment, and the employer must provide agreed compensation to the former employee.

Breaching Non-Competition Obligations

The Labour Law stipulates that if an employee breaches a non-competition clause, the employer has the right to claim damages. The burden of proving the causal link between the breach of the non-compete obligation and the damage incurred lies with the employer.

It is also not uncommon for individual employment contracts to include a contractual penalty for breaching this clause as a form of sanction. However, the enforceability of such provisions in practice is uncertain, given the inconsistent practice of Serbian courts regarding the application of contractual penalties in employment relations. The predominant view is that such a provision is not enforceable. Finally, violating this obligation during the course of employment generally constitutes grounds for disciplinary liability.

Non-Solicitation Clauses

Non-solicitation clauses are not explicitly regulated under Serbian labour legislation but are used in practice to prevent former employees from soliciting clients, business partners, or employees. Their enforceability is uncertain due to the lack of direct legal recognition.

Employers may claim damages for breach of a non-solicitation clause but must prove the causal link between the breach and the damage suffered. The same rules on contractual penalties apply.

Non-solicitation clauses with reference to customers are not formally recognised nor common.

Data Privacy Law and Employment

The processing of employees’ personal data in Serbia is governed primarily by the Law on Personal Data Protection (Official Gazette of the Republic of Serbia, No 87/2018) (the “Law on Personal Data Protection”), which is aligned with the European Union’s General Data Protection Regulation (GDPR), while the Labour Law provides additional protection.

Protection of Employees’ Personal Information

Employers must implement appropriate technical and organisational measures to ensure the security and confidentiality of employees’ personal data. The Law on Personal Data Protection mandates that personal data be processed only when there is a valid legal basis, which includes:

• compliance with legal obligations (eg, tax reporting, social security contributions);
• performance of an employment agreement; and
• employees’ consent, where required, for specific data processing activities.

Sensitive personal data, such as information related to health, biometric data, or trade union membership, is subject to stricter processing conditions. Processing such data is allowed only if it is necessary for employment-related obligations or when explicit employee consent is obtained.

Other Rules and Restrictions

Employees’ rights

Under the Law on Personal Data Protection, employees are entitled to the following rights concerning their personal data:

• Right to Access: Employees can request information on whether their personal data is being processed, the purpose of processing, and who has access to their data, etc.
• Right to Rectification: Employees can request corrections to inaccurate or incomplete data.
• Right to Erasure: Employees can request the deletion of their data if it is no longer necessary for the original purpose or if processing is based solely on consent.
• Right to Restriction of Processing: Employees can request that their data be restricted in certain circumstances, such as when its accuracy is contested.
• Right to Data Portability: Employees can request that their data be provided to them in a structured, commonly used format or transferred to another employer where technically feasible.
• Right to Object: Employees can object to data processing based on legitimate interests unless the employer demonstrates compelling reasons to continue processing.

If an employee believes their data protection rights have been violated, they can file a complaint with the Commissioner for Information of Public Importance and Personal Data Protection, the supervisory authority in Serbia.

Prohibition

The Law on Personal Data Protection prohibits unauthorised disclosure, alteration, or destruction of personal data. Employers may disclose employee data to third parties only where there is a valid legal basis, such as consent, contractual necessity, or legal obligation. Unauthorised processing or misuse may result in legal consequences. Serbian law recognises anonymisation, whereby data that can no longer identify individuals and cannot be restored is no longer subject to data protection requirements.

Foreign Workers

The employment of foreign workers in Serbia is regulated by a set of immigration laws, with the most significant ones being the Law on Employment of Foreigners (Zakon o zapošljavanju stranaca, Official Gazette of the Republic of Serbia, No 128/2014, 113/2017, 50/2018, 31/2019, and 62/2023) and the Law on Foreigners (Zakon o strancima, Official Gazette of the Republic of Serbia, No 24/2018, 31/2019, and 62/2023).

Under the Law on Employment of Foreigners, foreign nationals may work in Serbia if they hold an appropriate visa, temporary or permanent residence, and a unified residence and work permit. Non-compliance may result in sanctions for both the employer and employee.

In general, foreigners who meet these conditions are entitled to the same treatment as domestic employees, enjoying all the rights and obligations provided under the Labour Law.

Additionally, the Law on the Employment of Foreigners authorises the Serbian government to introduce quotas limiting the number of single permits that may be issued to foreign nationals in the event of labour market disturbances.

Requirements

The statutory requirements for a foreigner to legally work in Serbia are as follows:

• The foreigner must possess a valid passport that is valid for at least three months beyond the duration of the required permit or visa.
• The foreigner must have secured accommodation in which they will reside.
• The foreigner must provide evidence supporting the justification for the issuance of a unified permit for residence and work, and must meet the legal requirements for employment.
• The employer must not have dismissed employees within 90 days prior to submitting the application for a single work and stay permit due to technological, economic, or organisational changes for positions for which the permit is being requested.
• The employer must prove that there is no suitable candidate available on the domestic labour market for the position being offered.
• The foreigner must have a signed employment agreement with a domestic employer.

Permit

The employment of foreigners is contingent upon obtaining the necessary visas or permits. The issuance of visas is within the jurisdiction of the Ministry of Foreign Affairs, the Ministry of the Interior, and the National Employment Service (NES), while the Ministry of the Interior and NES issue the unified permits for residence and work.

Long-Term Visa

Foreign nationals requiring a visa must obtain a long-term employment visa, allowing them to work in Serbia for up to 180 days. To continue working, they must apply for a unified residence and work permit before the visa expires, allowing them to remain employed while the application is pending.

Unified Permit for Residence and Work

Citizens of visa-exempt countries may apply for a unified residence and work permit during their legal stay in Serbia if they intend to work. The permit may be issued for up to three years, subject to meeting legal requirements.

Work Without Unified Permit

Foreigners with a permanent residence permit are also allowed to work legally in Serbia, as are those with residence permits based on family reunification, property ownership, etc, without the requirement to obtain unified permit for residence and work or separate work permit.

As an exception, foreigners staying in Serbia up to 90 days within a 180-day period may work without a unified residence and work permit in certain cases, including business activities, conferences, research, cultural or sports activities, technical services related to machinery, and participation in trade fairs.

Mobile Work

The basic legal framework governing remote work and work from home, including the mandatory contractual requirements applicable to such arrangements, is described in 1.2 Employment Contracts.

No special data privacy rules apply to remote work. The general provisions of the Law on Personal Data Protection apply, and employers remain responsible for protecting personal data and confidential business information through appropriate technical and organisational measures.

Occupational safety and health obligations also apply to remote workers, taking into account the nature of such work. Under Serbian law, remote work may only be agreed for jobs that are not hazardous or harmful to health and do not endanger the environment.

Remote work does not affect an employee’s mandatory social security coverage. Employees working remotely remain subject to the same mandatory pension, health insurance and unemployment insurance schemes as employees working at the employer’s premises.

Sabbaticals

The Labour Law does not recognise sabbatical leave as a statutory employment entitlement. Employees do not have a general right to take an extended period of paid or unpaid leave for personal development, research, travel or similar purposes.

An employer may grant unpaid leave at the employee’s request, at its discretion and subject to internal policies or collective agreements. The duration and conditions are determined by agreement, while internal acts or collective agreements may provide additional paid or unpaid leave.

Other New Manifestations

Serbian labour legislation does not specifically regulate modern workplace concepts such as desk sharing, hot-desking, activity-based working or similar flexible workplace arrangements.

Employers may introduce such organisational models if they comply with the Labour Law, occupational safety and health regulations, data protection requirements, and applicable internal acts.

Status/Role of Unions

Trade union organisation in Serbia is constitutionally protected and further regulated by the Labour Law. Employees have the right to organise and act through trade unions without prior approval, subject to registration in the relevant register, which grants unions legal entity status.

Trade union freedom under the Labour Law includes employees’ right to organise, unions’ autonomy to form federations and confederations, and limited statutory restrictions. A trade union is an autonomous and independent organisation formed voluntarily to protect employees’ interests and may be established without employer approval.

The Role of Representative Bodies

Serbian law does not generally provide for mandatory works councils or other employee representative bodies comparable to those existing in certain other European jurisdictions. Accordingly, employee representation is primarily exercised through trade unions.

Trade unions represent employees in relations with employers and in tripartite negotiations with the government and employer associations. Their main purpose is to protect and promote collective labour, economic, and social interests and improve employee rights through dialogue.

Where a trade union exists, it represents employee interests in collective bargaining. Since more favourable provisions of collective agreements prevail over the Labour Law, this role is particularly significant.

The protective and advisory role of trade unions is also codified in Serbian law, requiring employers to seek union opinions in specific circumstances prescribed by law. These situations include decisions on setting the minimum wage, termination of employment due to disciplinary breaches, and other relevant labour matters.

Collective Bargaining Agreements

Under the Labour Law, collective agreements regulate employment-related rights, obligations, and responsibilities, including procedures for amendments, relations between parties, and other relevant matters.

The parties involved in negotiating and concluding collective agreements depend on the level at which these agreements apply, as outlined above. Additionally, all participants must meet the criteria for representativeness, as precisely defined by the Labour Law.

The levels of collective agreements include:

• company-level collective agreements concluded between an employer and a representative trade union within that company;
• general collective agreements signed between a representative employer association and a representative trade union at the national level;
• sectoral collective agreements negotiated between representative employer associations and trade unions within a specific industry, group, or sector; and
• regional collective agreements established between representative employer associations and trade unions at the level of a territorial unit.

Serbian labour legislation generally favours employees, meaning employers may terminate employment unilaterally only on specific grounds prescribed by law.

Unilateral Termination by Employer

The employer may unilaterally terminate employment relationship only for a limited number of grounds specified in the Labour Law. These grounds are:

• the employee’s failure to achieve the work results or to have the necessary knowledge and skills to perform his/her duties (incompetence);
• the employee has been sentenced by a final judgment for a work-related crime;
• the employee’s failure to return to work within 15 days of the expiry of a period of suspension of employment or unpaid leave;
• intentional breach of work duty;
• breach of work discipline;
• redundancy; and
• refusal to conclude certain annexes to the employment agreement (eg, transfer to another job position or change of salary).

Termination based on statutory grounds requires compliance with prescribed procedures. Failure to follow these procedures may result in a court declaring the termination unlawful, making proper documentation essential.

Employee’s Incompetence

Under the Labour Law, an employer may terminate employment if an employee fails to achieve required work results or lacks necessary knowledge and skills, provided the employee has first received written notice of deficiencies, guidance, and a deadline for improvement, but fails to improve.

Under this ground for the employment termination, the employer must carry out the following procedure:

• The employer must provide the employee with a written notice regarding the deficiencies in his/her work, guidance and an appropriate deadline to improve work performance. The notice should contain, inter alia, the following:
1. a detailed description of deficiencies in the employee’s work;
2. clear and precise instructions to improve work performance; and
3. an appropriate deadline to improve work performance.
• After the improvement period expires, the employer must assess the employee’s work results. If performance has not improved, the employer may terminate employment in accordance with the Labour Law, with a notice period of eight to 30 days. Due to the complexity of the procedure, such dismissals are relatively rare in practice.

Intentional Breach of Work Duty or Breach of Work Discipline

Pursuant to the Labour Law, the employer may terminate the employment agreement of an employee who, due to their own fault, commits a breach of a work duty, or of an employee who breaches work discipline.

If the employer terminates the employment agreement due to an employee’s intentional breach of work duty or work discipline, the employer must issue a formal written warning letter stating:

• the grounds for termination;
• the relevant facts and evidence; and
• the deadline for response within which the employee can respond to allegations, which cannot be less than eight days.

After receiving the employee’s response or expiry of the response deadline, the employer may issue a decision on termination. The decision must be reasoned, include information on legal remedies, and be personally delivered to the employee.

This termination reason must be considered in the case of a breach of work duty or discipline stipulated by the Labour Law or employment agreement, and the facts and circumstances of each potential breach must be carefully reviewed and assessed.

Instead of terminating employment for breach of work duties or work discipline, the employer may impose alternative measures if there are mitigating circumstances or the breach is not serious enough to justify termination:

• temporary suspension from work without compensation of salary, for a period of one to 15 working days;
• fine of up to 20% of the base salary of the employee for the month in which the fine was imposed, for a period of up to three months, which is executed by deductions from salary, based on the decision of the employer on the measure imposed; or
• a warning with a threat of dismissal, stating that the employer will terminate the employee’s employment agreement without issuing a further warning if, within the following six months, the employee commits the same breach of work duties – ie, fails to comply with work discipline.

Redundancy

Redundancy occurs when the need for certain work is eliminated or reduced due to economic, organisational, or technical changes. Depending on the number of affected employees, the employer may be required to adopt a redundancy programme.

The procedural requirements include the following:

• adopting the decision on redundancy;
• implementing a redundancy programme, if applicable;
• amending the rules on the organisation and systematisation of work posts (this general enactment must be changed if certain work posts are terminated due to redundancy); and
• adopting the individual decisions on termination of employment.

In the case of redundancy, the employer cannot employ another person for the same position before the expiry of three months from the date of the dismissal.

In cases of redundancy, employees are entitled to a severance payment of at least one-third of their average salary from the previous three months for each full year of employment with the employer. Employment with related entities and previous employers is also considered. The statutory minimum severance payment is not taxable.

Collective Redundancy

A collective redundancy exists when, due to technological, economic or organisational changes that occur at the level of the employer, the employer decides to terminate, within a period of 30 days, the employment agreements of at least:

• ten employees (if the employer has more than 20 and less than 100 permanent employees);
• 10% of employees (if the employer has between 100 and 300 permanent employees); or
• 30 employees (if the employer has more than 300 permanent employees).

In the event of a collective redundancy, the employer must implement a redundancy programme. The employer must also implement a redundancy programme if it determines that at least 20 permanent employees will be dismissed within a period of 90 days, regardless of the total number of employees.

A redundancy programme is rather formal and includes certain procedural steps (for example, drafting a programme that contains all the mandatory elements set out in the Labour Law, seeking the representative trade union’s opinion on the draft programme, etc). This programme is adopted in co-operation with the National Employment Service.

Termination by Employees

Employees in Serbia can resign at any time by submitting a written notice. The notice period must be at least 15 days but no longer than 30 days. An exception applies to employees on probation, who can resign with a minimum of five working days’ notice.

Notice Period

For employee-initiated resignations, the notice period ranges from 15 to 30 days, while during probation, it is at least five days.

In the case of unilateral termination of employment by the employer, the notice period will depend on the particular ground for termination. Where the employer decides to terminate the employment on the ground that the employee failed to achieve certain work results (that is, incompetence, where the employee does not have the required knowledge and/or competence to perform the tasks required of the job), the employee is entitled to a notice period which should be determined by the work rules or the individual employment agreement (depending on the length of social insurance coverage), but which cannot be shorter than eight days or longer than 30 days. This is the only ground for termination of employment that requires a notice period. There are no mandatory notice periods for other legal grounds of termination of employment (the employment relationship is terminated on the day when the decision on termination is properly delivered to the employee).

Severance

Severance pay is not mandatory for all types of termination. It is only required in cases of redundancy, where the severance amount must be at least one-third of the employee’s average salary (from the previous three months) for each full year of service. If employment is terminated for other reasons, there is no legal obligation for severance pay.

There are no specific statutory requirements or formalities beyond the general rules prescribed by Serbian labour legislation.  No external advice, approval or authorisation is required. The applicable notice period, severance (where required), and termination procedure depend on the legal ground for termination and must be implemented in accordance with the Labour Law.

Dismissal for (Serious) Cause

The Labour Law does not expressly recognise the concept of “summary dismissal” or “dismissal for serious cause”. The closest equivalent is termination of employment by the employer for statutory reasons attributable to the employee, particularly for culpable breach of work duties or failure to observe work discipline under Article 179 of the Labour Law. Such termination is subject to a mandatory statutory procedure, including a prior written warning and an opportunity for the employee to respond, before the employer may issue a dismissal decision.

Termination Agreements

An employer and employee may mutually agree to end an employment relationship. In such cases, the employee does not have the right to unemployment benefits or continued social security contributions. While severance pay is not legally required, employers often offer it as an incentive for employees to agree to termination. Unlike redundancy severance, this payment is taxed as regular salary income.

Protected Categories of Employee

There are several types of protection against dismissal. Employees are protected from dismissal during:

• pregnancy;
• maternity leave;
• childcare leave; and
• special childcare leave.

Additionally, an employer cannot dismiss an employee purely on the basis of:

• the employee’s social status;
• the employee’s performance of activities in their capacity as an employee representative; or
• the employee’s membership of a trade union, or participation in trade union activities.

The period of employment of the protected category of employee employed for a definite period of time will be extended until the expiry of the right to use the leave of absence. A decision terminating the employment agreement is null and void if, on the date the decision is adopted, the employer was aware of the existence of the relevant protected circumstances. The decision is also null and void if the employee informs the employer of the existence of such circumstances within 30 days of termination of the employment relationship and submits the appropriate confirmation issued by an authorised physician or other competent authority.

Special protection also applies to employees acting as trade union representatives or participating in trade union activities.

Wrongful Dismissal Claims

A termination may be considered unlawful if the employer unilaterally terminates the employment agreement for any reason other than those prescribed by law (as described in 7.1 Grounds for Termination), or if the prescribed procedure was not followed in cases where such a procedure is required. Therefore, a termination is considered unlawful when it is based on a ground that is not legally recognised, when the facts are incorrectly interpreted as fitting within the legal grounds, when the employee is dismissed during a period of special protection, or when the applicable procedure (depending on the ground for termination) is not properly followed.

An employee who believes they have been unlawfully dismissed may initiate court proceedings and request reinstatement, compensation for damages, and payment of the corresponding contributions for compulsory social insurance for the period during which they were not employed. If the court determines that the termination was unlawful, the employee may request reinstatement, payment of lost salary for the period of absence from work, and payment of the corresponding social security contributions. If the employee does not request reinstatement, the court may award damages of up to 18 salaries, taking into account factors such as the employee’s length of service, age and family circumstances. Furthermore, if the court finds that there were valid grounds for termination, but the employer failed to comply with the prescribed termination procedure, the employee may be awarded damages of up to six salaries. Any compensation awarded may be reduced by income earned by the employee from other work after termination.

Anti-Discrimination Issues

Direct and indirect discrimination of job seekers and employees is prohibited on the basis of sex, birth, language, race, skin colour, age, pregnancy, health status or disability, national origin, religion, marital status, family obligations, sexual orientation, political or other beliefs, social background, financial status, membership in political organisations or trade unions, or any other personal characteristic.

Discrimination as defined in the Labour Law is prohibited in relation to:

• conditions for employment and selection of candidates for a particular position;
• working conditions and all rights arising from the employment relationship;
• education, training, and professional development;
• career advancement; and
• termination of the employment agreement.

In the case of discrimination, both job seekers and employees may initiate a lawsuit before the competent court and seek compensation for damages from the employer, in accordance with the law. If, during the proceedings, the plaintiff establishes facts that make it likely that discrimination occurred within the meaning of the law, the burden of proof shifts to the defendant, who must then demonstrate that no discriminatory conduct took place.

Digitalisation of Employment Disputes

Serbian law has not introduced specific rules on the digitalisation of employment disputes. Employment disputes are conducted in accordance with the general rules of civil procedure, and hearings are generally held in person before the competent court.

Judicial Procedures

According to Serbian labour legislation, labour disputes in Serbia follow specific judicial pathways defined primarily by the Civil Procedure Law (Zakon o parničnom postupku, Official Gazette of the Republic of Serbia, No 72/2011, 49/2013 – CC Decision, 55/2014, 87/2018,18/2020 and 10/2023 – other law) (the “Civil Procedure Law”) as lex generalis and Labour Law, as lex specialis concerning the relevant aspects prescribed by this law. Labour disputes are categorised as either individual or collective disputes, with different resolution mechanisms for each type.

Labour disputes in Serbia are primarily handled through the regular court system, specifically the basic courts in the first instance. Unlike some jurisdictions, Serbia does not have specialised labour courts. Employment disputes are heard by civil chambers of the basic courts, with judges who may specialise in labour matters but are not part of a separate labour court system. This integration into the regular court system means labour disputes follow civil procedure rules with certain modifications specific to labour cases.

Court Proceedings for Labour Disputes

In Serbian Labour Law, employees typically proceed directly to court filing without mandatory preliminary procedures. The basic court, having territorial jurisdiction, is determined by either the location of the employer’s registered office or the place where the employee performs or performed work.

The Labour Law establishes specific timelines for initiating legal action:

• For wrongful termination claims, employees must file lawsuits within 60 days from the termination date.
• For monetary claims such as unpaid wages or benefits, employees have a three-year statute of limitations.
• For discrimination or harassment claims, the deadline is extended to one year from the alleged violation.

Mediation

The Law on Peaceful Settlement of Labour Disputes (Zakon o mirnom rešavanju radnih sporova, Official Gazette of the Republic of Serbia, No 125/2004, 104/2009, and 50/2018) establishes a framework for voluntary alternative dispute resolution. Employers and employees can attempt to resolve their disputes through mediation before initiating formal court proceedings.

Mediation in labour disputes can be conducted through:

• the Republic Agency for Peaceful Settlement of Labour Disputes;
• private mediators registered with the Ministry of Justice; or
• internal mediation procedures established within companies through collective agreements.

Arbitration

A general act and employment agreement may provide for a procedure for amicable resolution of disputes between the employer and employee. Disputed issues are resolved by an arbitrator determined by agreement of the parties to the dispute from among experts in the field that is the subject of the dispute. The deadline for initiating a dispute before an arbitrator is three days from the day of delivering the decision to the employee. The arbitrator is obliged to make a decision within ten days from the day of submitting the request for amicable resolution of disputed issues. The procedural deadlines from the Law on Peaceful Settlement of Labour Disputes are very short. In most cases, a deadline of three days is prescribed for individual phases of the procedure, establishing the principle of efficiency and urgency of the procedure. According to the Labour Law, the arbitrator is obliged to make a decision within ten days from the day of submitting the request for amicable resolution of disputed issues.

Costs of Proceedings

Pursuant to the Civil Procedure Law, the unsuccessful party is generally required to reimburse the successful party for the necessary costs of the proceedings. Where a party is only partially successful, the court may order each party to bear its own costs or require one party to reimburse the other for a proportionate share of the costs, depending on the degree of success achieved in the proceedings. If a party is unsuccessful only in an insignificant part of its claim that did not give rise to separate costs, the court may order the opposing party to reimburse all litigation costs.