Introduction
An employment contract represents the fundamental and most important legal instrument governing the relationship between an employer and an employee. It regulates the mutual rights, obligations, and responsibilities of both parties within an employment relationship.
In modern working conditions, a properly concluded and lawfully implemented employment contract is essential for ensuring legal certainty and protecting employees, as well as for the efficient operation of employers.
The purpose of this article is to provide a comprehensive overview of the key aspects of an employment contract—from its essential elements and types of employment relationships, to the rights and obligations arising from it, as well as issues related to the termination of employment.
Form and Content of the Employment Contract
Form of the Employment Contract
In the Republic of Serbia, employment relations are regulated by the Labour Law (“Official Gazette of the RS”, Nos. 24/2005, 61/2005, 54/2009, 32/2013, 75/2014, 13/2017 – Constitutional Court decision, 113/2017, and 95/2018 – authentic interpretation), which prescribes the mandatory written form of the employment contract and its compulsory elements.
An employment contract must be signed no later than before the employee commences work. If the employer and the employee fail to conclude an employment contract prior to the start of work, the employment relationship shall nevertheless be deemed established as of the day the employee begins working. In such a case, it is presumed that the employment relationship has been established for an indefinite period.
An employment contract is considered concluded when it is signed by both the employee and the employer. At least three copies must be made, two of which are retained by the employer and one by the employee. The employer is obliged to keep at least one copy of the employment contract at the place of work.
Content of the Employment Contract
Pursuant to the Labour Law, an employment contract must contain at least the following elements:
- Name and registered seat of the employer
- Full name of the employee and their place of permanent or temporary residence
- Type and level of professional qualifications or education required for the position
- Job title and description of duties to be performed by the employee
- Place of work
- Type of employment relationship (indefinite or fixed-term)
- Duration of a fixed-term employment contract and the legal basis for concluding it
- Commencement date of employment
- Working hours (full-time, part-time, or reduced working hours)
- Amount of basic salary as of the date of contract conclusion
- Elements for determining basic salary, work performance, salary compensation, increased salary, and other employee earnings
- Deadlines for payment of salary and other entitlements
- Duration of daily and weekly working hours
The employment contract does not need to include the above elements if they are already regulated by law, a collective agreement, work regulations, or another employer’s internal act adopted in accordance with the law. In such cases, the contract must specify the act governing those rights at the time of conclusion.
For rights and obligations not regulated by the employment contract, the relevant provisions of the Labour Law or the employer’s general acts (work regulations or collective agreement) shall apply.
Annex to the Employment Contract
An annex to the employment contract is a legal instrument used to amend and/or supplement existing contractual provisions, such as changes to the position, salary, working hours, or other elements of the employment relationship.
It is important to emphasize that the employer may not unilaterally amend the employment contract. Amendments are permitted exclusively in cases prescribed by the Labour Law and the employer’s general acts, and only in accordance with the prescribed legal procedure. Otherwise, such amendments may be declared null and void.
Types of Employment Relationships
The Labour Law recognizes various types of contracts, depending on their duration, form of engagement, and specific conditions.
Employment Relationships Based on Employment Contracts:
- Indefinite-term employment contract
- Fixed-term employment contract
Engagement Outside an Employment Relationship:
- Contract for temporary and occasional work
- Service contract (contract for work)
- Professional training and professional development contract
- Supplementary employment contract
By concluding the above contracts, an employment relationship is not established. Consequently, persons engaged under these contracts do not enjoy the rights granted to employees under indefinite-term or fixed-term employment contracts.
Indefinite-Term Employment Contract
This is the basic and most common form of employment contract, concluded without a predetermined time limit. For this reason, it is considered the most stable form of employment.
An employment contract that does not specify the duration for which it is concluded is deemed to be an indefinite-term employment contract.
Fixed-Term Employment Contract
A fixed-term employment contract may be concluded only if there are objective reasons justified by a time limit, the completion of a specific task, or the occurrence of a specific event during which the work is required.
Additionally, a fixed-term employment contract may be concluded:
- To replace a temporarily absent employee, until their return
- For project-based work with a predetermined duration, for a maximum period until the completion of the project
- With a foreign national, based on a work permit issued in accordance with the law, for a period not exceeding the validity of the permit
- For work with a newly established employer whose registration is not older than one year at the time of contract conclusion, for a total duration not exceeding 36 months
- With an unemployed person who has up to five years remaining until meeting the conditions for retirement, for a period not exceeding the fulfilment of those conditions
An employer may conclude a new fixed-term employment contract with the same employee upon the expiry of the previous one, based on the same or a different legal ground. However, the total duration of such contracts, with or without interruptions, may not exceed 24 months (an interruption shorter than 30 days is not considered a break in employment).
Exceptions to this rule are rare and explicitly prescribed by the Labour Law (e.g. newly established employers, where the limit is 36 months).
If a fixed-term employment contract is concluded contrary to the law, or if the employee continues working for at least five working days after the expiry of the contract, the employment relationship shall be deemed to have been established for an indefinite period.
Contract for Temporary and Occasional Work
This contract is concluded for work lasting no longer than 120 days in a calendar year, in written form, with:
- An unemployed person
- An employee working part-time (up to full working hours)
- A retirement pension beneficiary
An employer may also conclude such a contract with a person who is a member of a youth or student cooperative, in accordance with cooperative regulations.
Service Contract (Contract for Work)
An employer may conclude a service contract with a person for work that falls outside the employer’s registered activity and involves the independent creation or repair of a specific item, or the independent performance of a specific physical or intellectual task.
In practice, service contracts are often concluded with persons engaged in artistic or cultural activities, in which case the contract must comply with the applicable special collective agreement, if such an agreement exists.
A service contract must be concluded in writing.
Professional Training and Professional Development Contract
A professional training contract may be concluded for the purpose of completing an internship or passing a professional exam, where required by law or internal regulations as a condition for independent work in a profession.
A professional development contract may be concluded for acquiring additional professional knowledge and skills or for specialization, for the duration specified by the relevant program, in accordance with special regulations.
The employer may provide monetary compensation and other rights to persons undergoing professional training or development. Such compensation does not constitute salary within the meaning of the Labour Law.
These contracts must be concluded in writing.
Supplementary Employment
An employee working full-time for one employer may conclude a supplementary employment contract with another employer, for up to one-third of full working hours.
The contract regulates monetary compensation and other rights and obligations arising from work and must be concluded in writing.
Rights and Obligations Arising from the Employment Contract
Regardless of whether one is an employee or an employer, both parties are obliged to respect the rights and obligations prescribed by the Labour Law, the employer’s general acts, and the employment contract itself.
Rights and Obligations of the Employee
The employee has the right to:
- Adequate salary
- Safe and healthy working conditions
- Health protection
- Protection of personal integrity and dignity, and other rights in cases of illness, reduced or lost work capacity, and old age
- Material security during temporary unemployment
- Limited working hours
- Breaks during work, daily, weekly, and annual leave
- Protection of privacy and personal data
- Protection against discrimination and harassment
The employee is obliged to:
- Perform assigned duties conscientiously and responsibly
- Respect the organization of work and business operations of the employer
- Inform the employer of circumstances that affect or may affect the performance of contractual duties
- Report any potential danger to life, health, or property
Rights and Obligations of the Employer
The employer has the right to:
- Organize the work process
- Issue work instructions
- Supervise the work of employees
The employer is obliged to:
- Pay salary for work performed, in accordance with the law, internal acts, and the employment contract
- Ensure working conditions and organize work to protect life and health at work
- Inform employees of working conditions, organization of work, and applicable rights and obligations
- Provide employees with the work specified in the employment contract
- Seek the opinion of the trade union in cases prescribed by law, or employee representatives where no union exists
Rights and Obligations Arising from Employment
Employment-related rights include all rights acquired by the employee based on the employment contract, law, collective agreement, or employer’s general acts. Key rights include:
- Salary and salary compensation
- Occupational health and safety
- Leave and time off
- Social and health insurance
- Protection of dignity, privacy, and personal data
- Trade union organization and collective bargaining
- Protection against unlawful dismissal
Failure to comply with employment obligations may result in disciplinary liability or termination of employment.
Termination of the Employment Contract
Grounds for Termination
An employment contract may be terminated by:
- Mutual agreement between the employer and the employee
- Termination (by either party)
- Expiry of the fixed term
- The employee reaching 65 years of age and at least 15 years of insurance service, unless otherwise agreed
- At the request of a parent or guardian of an employee under 18 years of age
- Death of the employee
- Other cases prescribed by law
Conclusion
The employment contract is a key document governing the employment relationship and forms the basis for exercising all rights and obligations of both the employee and the employer. Proper drafting, compliance with legal standards, and clear communication between the contracting parties are prerequisites for stable and lawful employment relationships.
In modern working conditions, characterized by increasingly flexible forms of employment, understanding the essential elements of the employment contract and the rights arising from it is of crucial importance. Proper interpretation and application of employment contracts contribute to better protection of employees and more efficient business operations.
Frequently Asked Questions about Employment Contracts (FAQ)
1. Can a probationary period be agreed, and how long may it last?
Yes. An employment contract may provide for a probationary period, which may not exceed six months. During the probationary period, the employee enjoys the same rights and obligations as other employees.
Before the expiry of the agreed probationary period, either the employer or the employee may terminate the employment contract with a notice period that may not be shorter than five working days (the employer is required to provide written reasons for termination).
If, during the probationary period, the employee fails to demonstrate adequate professional and working capabilities, the employment relationship shall terminate upon the expiry of the period specified in the employment contract. In such cases, the employer is also obliged to issue a formal decision on the termination of employment.
If the employee continues to work after the probationary period has expired, the probationary period shall be deemed to have been successfully completed.
2. What rights do employees working in high-risk positions have?
Employees working in positions involving increased risk to life and health are entitled to special protection, regular medical examinations, and reduced working hours.
The employer is obliged to implement special occupational health and safety measures in accordance with the Law on Occupational Safety and Health and the employer’s internal acts.
3. Is an employee required to work on the employer’s premises?
The place of work is determined by the employment contract and may be the employer’s premises, another specified location, multiple locations, or the employee’s place of residence in cases of remote work or work from home.
The employer is obliged to ensure safe working conditions at all locations where the employee performs work. Failure by the employee to perform work at the agreed place of work may constitute grounds for termination of the employment contract.
4. What is the difference between full-time, part-time, and reduced working hours?
Full-time working hours may not exceed 40 hours per week.
Part-time working hours involve work for fewer hours than full-time employment, with the employee exercising proportional employment rights.
Reduced working hours are introduced for jobs involving increased risk and are calculated as full-time working hours. In such cases, the employee is entitled to all rights as if working 40 hours per week.
5. Is the employer obliged to provide premises, equipment, and working conditions?
Yes. The employer is obliged to provide the employee with appropriate premises, equipment, and work tools, as well as protective equipment in accordance with the nature of the work.
The employer must also regularly maintain premises and equipment to ensure safe and healthy working conditions. Otherwise, the employee may notify the labour inspection authority.
6. Is the employee obliged to protect business secrets and the employer’s property?
Yes. The employee is obliged to safeguard the employer’s business secrets, as well as the property and work equipment entrusted to them.
The employee is liable for any damage caused at work or in connection with work, in accordance with the law. Breach of this obligation may constitute grounds for termination of the employment contract.
7. When and how is an employment contract concluded?
An employment contract must be concluded in writing prior to the employee commencing work.
Before signing the contract, the employer is obliged to inform the employee about the job, working conditions, rights and obligations arising from the employment relationship, as well as the obligation to comply with the employer’s work organization, business operations, and internal rules related to contractual and other employment obligations.
The employment contract is concluded in at least three copies—one retained by the employee and two by the employer.
8. What are the basic conditions for establishing an employment relationship?
To establish an employment relationship, a person must be at least 15 years of age (with the consent of a parent, adoptive parent, or guardian if under 18), possess the required professional qualifications, and undergo a medical examination by a competent healthcare authority, if prescribed.
9. Is a medical examination mandatory before commencing employment?
Employees are generally not required to undergo a medical examination prior to commencing employment.
However, for positions involving increased risk, a prior medical examination is mandatory in order to assess specific health conditions and the employee’s fitness for work in relation to the risk factors identified in the employer’s risk assessment act.
A prior medical examination is conducted:
- before commencing work in a high-risk position;
- before transferring an employee to a high-risk position;
- upon identification of new risks at the high-risk workplace;
- if the employee has been absent from work in a high-risk position for more than 12 months.
In addition, a medical examination is mandatory for persons under 18 years of age, as the Labour Law provides that such persons may establish an employment relationship only on the basis of a medical certificate issued by a competent healthcare authority confirming that they are fit to perform the relevant work and that such work is not harmful to their health.
10. What employment rights arise even if they are not stated in the employment contract?
Employees are also entitled to statutory rights that do not need to be expressly stated in the employment contract, such as the right to annual leave, reimbursement of transportation costs, the right to trade union activity, and protection in cases of unlawful dismissal.
11. What if the employer fails to comply with employment obligations?
In such cases, the employee may contact the labour inspection authority or initiate court proceedings to protect their rights.
The employer may be subject to financial penalties and, in certain cases, criminal liability.
Our law office remains at the disposal of all individuals requiring assistance with the drafting, analysis, or interpretation of employment contracts.
Disclaimer: This article is provided for informational purposes only and does not constitute legal advice, nor does it address individual cases. For any questions regarding employment contracts or for legal assistance, please feel free to contact us with confidence.
