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What is the Deadline for Enacting Decision on Termination of Employment Agreement?

What is the Deadline for Enacting Decision on Termination of Employment Agreement?

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As we have written about in one of our previous texts, the Labour Law (“the Law“) stipulates, among other, that an employee’s employment may be terminated if there is a justified reason pertaining to employer’s needs, i.e., if due to technological, economic or organisational changes the need for certain job ceases or if the workload is reduced.

Depending on the circumstances of specific case, notably the number of persons engaged by an employer on full-time basis and the number of redundant employees, an employer may be obliged to enact a program for redundancy resolution. In any case, a redundant employee’s agreement shall be terminated by decision, which shall be passed in writing and include a rationale and legal redress.

The Law nevertheless does not stipulate a deadline in which an employer is obliged to enact a decision on termination of employee’s agreement upon the establishment of cessation of the need for employee’s work.

Court practice

In relation thereto and according to a Judgment of the Supreme Court of Cassation Rev2 2118/2021 of December 6, 2022 (“the Judgment“), the fact that the decision (terminating employment agreement of a redundant employee) has been passed some time after the establishment of cessation of need for employee’s work does not render such decision unlawful.

Namely, acting in the particular case the court found that “no provision of the Labour Law stipulates the deadline by which an employer, after the establishment of cessation of need for an employee’s work, should enact a decision on termination of employee’s agreement, and the fact that the employer enacted the disputed decision on termination one and a half month after the establishment of cessation of need for the employee’s work, does not render the disputed decision unlawful“.

Statute of limitations

However, the Law prescribes that termination of employment agreement under Article 179, para. 1, item 1) and para. 2 and 3 of the Law, namely if employee does not achieve work results or does not have necessary knowledge and skills to perform the duties within the job, if he/she violates working duty or fails to respect working discipline, the employer may dismiss the employee within six months after finding out about the facts on which dismissal is based, i.e., within one year after the day of onset of the respective facts (so-called statute of limitations); therefore it is important that the decision on dismissal or other measure is issued to the employee within the stated deadlines.

This article is to be considered as exclusively informative, with no intention to provide legal advice. If you should need additional information, please contact us directly.

By Lara Maksimovic, Senior Associate, PR Legal

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PR Legal is a Serbian business law firm which renders advice on a full range of corporate matters, from day-to-day legal issues to large M&A and capital-raising transactions. We provide high-quality legal services to companies, entrepreneurs, private entities, and public institutions, in a modern and pro-active manner, based on unique professional experience in high-profile transactions and disputes.

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