There are two types of employment contracts in Serbia:
✓ fixed term. A definite term employment agreement can be entered only in a limited number of cases.

The fixed- term agreement specifies an end date or a specific project or set of circumstances. Generally, they cannot exceed 24 months, although in certain circumstances can be extended to 36 months, for example if it is tied to the duration of a foreign employee’s work permit. If a contract does not specify fixed-term it is automatically indefinite; if an employee is asked to work more than five days after completing the fixed-term agreement, the contract becomes indefinite. If an employer fails to sign a fixed-term contract it is deemed to be indefinite. If a definite term employment agreement is concluded contrary to the provisions of the labor act, or if the employee continues to work for the employer for at least five business days after the expiry of the period, for which the agreement was concluded, it will be deemed that an indefinite-term employment relationship has been established.

✓ with an indefinite period. Major type of employment. The indefinite-term employment contract, also known as “Permanent employment”, engages employees that do not have a predetermined end date to
employment. Namely, the basic difference between indefinite-term employment contract and any other
form of workforce engagement is in terms of reasons for termination of employment. In the event employment contract for indefinite period of time is concluded, the Employment Act prescribes situations for termination of employment.

The normal working hours per week in Serbia is 40 and normal working hours per day is 8 hours.
A regulation made by the local authority or corporation may provide for full-time working hours less than 40 hours a week, but not shorter than 36 hours a week. The minimum duration of annual vacation is 20 days per calendar year.
This minimum can be increased based on various criteria determined in the individual collective agreement, the work rules, or the employment agreement (as applicable).

Maternity leave: An employed woman is entitled to leave for pregnancy and childbirth, as well as leave for childcare, the total duration of 365 days. She may start her maternity leave pursuant to advice of a competent medical authority 45 days before the delivery term at the earliest and 28 days at the latest. Childcare leave starts on the expiry of the pregnancy leave. Pregnancy and childcare leave are fully compensated by the state.

Upon request of employer, an employee shall work longer than his/her full time in case of force majeure, unexpected increase of the volume of work and in other instances when it is necessary to finish unplanned work by a set deadline. Overtime cannot last for more than 8 hours per week, or four hours a day per employee.

Re-scheduling of working hours shall not be treated as overtime. Overtime and re-distribution of working hours shall not be allowed for employees below the age of 18.

Mandatory

Social Insurance: Employers in Serbia must comply with mandatory contributions to social insurance funds as a percentage of their employees’ gross incomes. Employers contribute 10.0% to pension and disability insurance and 5.15% to health insurance.

Additional

There are no obligatory additional benefits in Serbia, unless for specific type of jobs such as working in fields, on shifts, etc.
It is a common practice for employers to provide medical and life insurance to their employees.

A work permit is granted on the request of the employer (except for works permit for self- employment). There are three different types of work permits:

• Work permit for employment.

• Work permit for self-employment.

• Work permit for special cases.

  The foreign national can only perform the work for which he/she has obtained the work permit. There are specific procedures regarding the required documents and conditions that must be fulfilled for the three categories of permits.

  In addition, the potential introduction of quota systems (limiting the number of work permits that can be issued to foreign nationals) can have an impact on the possibility of employing foreign nationals.

  The procedure for obtaining a work permit for employment takes up to 25 days, whilst the procedure for its renewal takes up to 15 days. A work permit for employment is issued for the duration of the temporary residence visa and can be renewed. Other work permits are either issued for the duration of the temporary residence visa or for one year.

  A work permit for employment can only be issued if the following conditions are met (Law on Employment of Foreign Nationals):

• Before filing the request for the work permit, the employer did not make redundant any employee working in the position for which the work permit is requested;
• If in ten days preceding the request for the work permit, the employer was not able to find a suitable qualified employee among: Serbian citizens; persons with a personal work permit; or persons who have free access to the Serbian labor market.

Multilateral termination

An employment relationship may terminate on the ground of agreement, in writing, between the employer and the employee. Before signing the agreement, the employer is bound to notify the employee, in writing, on consequences that may ensue in the procedure for acquiring the unemployment benefits.

In case of some issue with an employee, the best practice is to offer to the employee some benefits to sign the multilateral agreement (e.g. notice period or severance).

Termination of the employment agreement by the expiration

If the employment agreement is on definite time, the employment agreement is terminated if it is not extended by the new employment agreement.
Employer shall issue the decision on the termination to the employee.

Unilateral termination of the employment by the employer

1) If an employee is in the probation period (up to the first six months of the employment):
Before the expiration of the time for which the probation work was contracted, the employer may terminate the employment contract with a notice period that may not be shorter than 5 working days.

Employer shall be obliged to give reasons for termination of the employment contract.
2) Non-performance:
First, the employer shall give to employee the written notice regarding the deficiencies in work of the employee, guidance, and an appropriate deadline to enhance work performance. What is the given (appropriate) time is not defined by the Law. The best practice should be at least one month.
If the employee does not enhance the work performance within the given deadline, the employer may terminate the employment agreement with a notice period from minimum 8 to maximum 30 days.
3) A breach of a work duty or employee does not respect the work discipline:
First, the employer shall give the employee the written Warning, where an employee is given 8 days to answer this Warning. Based on the answer, the employer may terminate the employment agreement.

Severance pay is mandatory only in case of dismissals due to redundancy. In that case, the employee is entitled to severance pay, which cannot be lower than the sum of one-third of the employee’s average gross salary
(paid over the previous three months of employment preceding the month in which severance is paid) for each full year of employment with the employer. The severance pay must be paid before the employment ends. On retirement, employees have the right to a severance payment equivalent to two average salaries in Serbia.