Labor relations under scrutiny: How to properly cancel an employment contract without the risk of a lawsuit?
Termination of an employment contract is one of the most sensitive segments of labor law in Serbia. Whether you are an employer wishing to end cooperation with an employee due to a breach of work discipline, or an employee who doubts the legality of their management's decision, the rules of the game are strict.
Just one procedural error in the termination process can turn a justified reason for contract termination into an expensive and lengthy labor dispute. Case law in Serbia shows that courts interpret form and procedure with extreme rigor, and employers most frequently lose disputes not because they lacked a reason for termination, but because they failed to comply with the legal procedure.
In this text, we reveal the most common legal grounds for termination, the steps an employer must take, and how to successfully distance yourself from the risk of a lawsuit for unlawful termination.
Legal Grounds for Termination: When Does an Employer Have the Right to Act?
The Labor Law of the Republic of Serbia precisely defines the situations in which an employer may terminate an employee's employment contract. They can generally be divided into several key categories:
Reasons relating to the employee's work capacity and conduct: Poor performance or a lack of the necessary knowledge and skills to perform the job.
Breach of work duty and violation of work discipline: Lateness, unexcused absence, non-compliance with management decisions, or arriving at work under the influence of alcohol/psychoactive substances.
Technological, economic, or organizational reasons: When the need to perform a specific job ceases due to a reduction in the volume of work or reorganization (so-called "technological redundancy").
Important Note: Verbal termination does not legally exist in the Republic of Serbia. The sentence "From tomorrow, you don't need to come to work" is the fastest route to losing a labor dispute and being obligated to pay serious financial compensation (back pay, social security contributions, damages).
Procedure is Everything: Three Key Steps Before the Termination Notice Itself
If you are terminating an employment contract due to a breach of work duty or non-compliance with work discipline, the Law obligates you to conduct a strict and formal procedure:
1. Warning Before Termination (Warning of the Existence of Reasons for Termination)
Before you draft the final Termination Notice (Decision), you must deliver a written Warning to the employee. In it, you must clearly state:
What exactly the employee did (time, place, and manner of the breach of duty).
Which specific provisions of the Law, Collective Agreement, or Work Regulations they violated.
The evidence confirming these allegations.
2. Deadline for the Employee's Response
The employee has a legal deadline of at least 8 working days from the day the warning is delivered to respond to the allegations in the Warning. They may do this personally or accompanied by the opinion of a trade union (if they are a member). The employer is obliged to consider this response before making a final decision.
3. Proper Delivery of Documents
The delivery of the Warning and the Termination Notice itself is the area where employers most frequently make cardinal mistakes. If the employee refuses to receive the document on the employer's premises, the law dictates a strict procedure of making a written note, sending it via registered mail with an acknowledgement of receipt, and eventually posting the document on the bulletin board after a failed delivery.
Termination as Technological Redundancy: The Most Common Pitfalls
When termination is given due to company reorganization and a reduction in the volume of work, the rules are different but equally strict.
Rule 1: The employer cannot immediately hire another person for the same position. If, within three months from the day of the termination of employment, a need arises to perform that same job, the employee whose employment was terminated as technological redundancy has priority for concluding an employment contract.
Rule 2: Severance pay is mandatory. The payment of severance pay must be executed prior to the termination of employment. If you are late with the payment by even a single day after the employee's employment has ended, the termination becomes unlawful.
How to Minimize the Risk of a Labor Dispute?
Whether you manage a small enterprise or a large corporate system, prevention is the best shield.
Update internal acts: The Work Regulations and the employment contracts themselves must clearly and precisely define what constitutes a breach of work duty and a violation of work discipline in your company. Generic templates from the internet often do not provide adequate protection.
Secure irrefutable evidence: If you claim that an employee is not achieving results, you must have written reports, performance standards, and proof that they were provided with the necessary working conditions. If alcohol is involved, the testing procedure must be conducted strictly according to internal protocol.
Consult a lawyer before signing any document: A legal analysis of the situation before you hand a Warning to an employee saves time, money, and your company's reputation.
Legal Support in Labor Disputes – Miković Bosilj Law Office Pančevo
The regulation of labor-legal relations requires surgical precision. The Miković Bosilj Law Office from Pančevo provides comprehensive legal services in the field of labor law, including:
Drafting general acts for employers (Work Regulations, Regulations on Organization and Job Systematization).
Drafting lawful employment contracts and contract annexes.
Guiding and advising through employment contract termination procedures.
Representing employers and employees before competent courts in labor disputes.
Protect your business in time or realize your employment rights with expert legal assistance. Contact us to schedule a legal consultation.