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Labor Reform in Bosnia and Herzegovina

Labor Reform in Bosnia and Herzegovina

Bosnia and Herzegovina
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The past half year has been a tumultuous one for Bosnia and Herzegovina (BH). Labor reforms, which strike at the very heart of the socio-economic structure of every nation, are under way in both entities of BH – the Federation of Bosnia and Herzegovina (FBH) and Republika Srpska (RS). The adoption of new labor legislation was prompted by the Reform Agenda for BH 2015-2018, the implementation of which is an imperative in BH’s search for EU integration. 

The situation was especially turbulent in FBH. The old Labor Law in FBH was passed in 1999 and since then has undergone many amendments. As stated in the Reform Agenda for BH 2015-2018, the labor regulatory framework was not flexible enough, and the Government of FBH found that it was necessary to harmonize the law to a greater extent with the Directives of the European Union, international conventions such as the European Social Charter (revised), and conventions of the International Labour Organization.

The Parliament of FBH adopted the new Labor Law of FBH under urgent procedure and passed it on July 31, 2015, through its House of Representatives, just a day after it was passed by the House of Peoples. Besides meek criticism by the opposition and a protest organized by the Association of Independent Trade Unions of BH, there was no stronger defiance in respect to the new labor law – at least in comparison to situations in other countries (e.g., this year’s protests in France aimed against labor reforms). The new Labor Law came into force on August 20, 2015, and the social partners braced themselves for its impact and the arduous process of collective bargaining. Meanwhile, some delegates of the House of Peoples argued that the law was adopted contrary to rules of procedure, so the Constitutional Court of FBH was called upon to determine the regularity of the law’s passing. On February 17, 2016, just as the new General Collective Agreement was signed and ready to be published in the Official Gazette of FBH, and as employers began adapting their internal acts to the new Labor Law, the Constitutional Court of FBH ruled that the law had, indeed, been adopted contrary to proper rules of procedure. As a result, the old Law became valid again, the new Law could be re-adopted by the House of Peoples (this time by proper procedure), and the new General Collective Agreement no longer had its legal ground. 

This put those employers which had already adapted their internal acts to comply with the new law in an unfortunate position. Fortunately, this situation of legal uncertainty was resolved in relatively short order as the new Labor Law of FBH, adopted with the same text of the law from 2015, finally came into force on April 14, 2016.

Upon the Law’s (re)entry into force, the social partners agreed to sign the new General Collective Agreement with the same text as the one signed in February 2016, and it came into force on June 23, 2016.

The aim of the new labor legislation was, among other goals, to raise the competiveness of the local economy by liberalizing the labor laws but also to provide additional workers’ rights which had previously been provided for only by collective agreements, plus some that had not previously existed at all. 

The new Labor Law of FBH introduced many innovations, such as provisions prohibiting discrimination, harassment, and psychological workplace bullying; enabling work outside the employer’s premises; affecting representativeness of trade unions; altering the general manager status (i.e., it is no longer required for a general manager to conclude an employment contract); obliging an employer to deliver a copy of the mandatory insurance application to employees; requiring that medical examinations be conducted; altering the duration of annual leave; altering the maximum duration of an employment contract for a definite period, and many more. 

The new General Collective Agreement for the territory of FBH also introduced some new elements into the labor-regulation landscape of FBH. Many employees’ rights that were defined by the previous general collective agreement were delegated to be defined by branch or individual collective agreements, an employer’s internal acts, or employment contracts. 

Despite the arduous process of passing the Labor Law, it has yet to prove that its provisions are adequate for BH’s socio-economic environment. As with any major reform, only time will tell to what extent it turns out to be a success or failure.

By Emina Saracevic, Partner, and Harun Novic, Associate, Saracevic & Gazibegovic Lawyers

This Article was originally published in Issue 3.4 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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