Pursuant to the provisions of the Labor Law (Official Gazette of the Republic of Serbia no. 24/2005, 61/2005, 54/2009, 32/2013, 75/2014, 13/2017 – decision of the US, 113/2017 and 95/2018 – authentic interpretation) (“the Law”), by an employment contract the employer and the employee may establish the probation period for performance of one or more related jobs specified in that contract.
Probation period is regulated in the Law in only one article (Article 36), which further stipulates that probation period can last up to six months, as well as that it can be terminated both before and on the day of expiration of the term specified in the employment contract.
Namely, the Law prescribes that before the expiration of the time for which the probation period has been contracted, the employer or the employee may cancel the employment contract, with a notice period that cannot be shorter than five working days. The employer is obliged to provide rationale for the termination of the employment contract. On the other hand, an employee who has not demonstrated appropriate work and professional skills during the probation period will have their employment terminated on the day of expiry of the term specified in the employment contract.
Procedure for termination of employment
In addition to the manner of cancellation, i.e., termination of the employment contract during the probation period, the Law prescribes a special procedure for the termination of the employment contract (i) due to a (culpable) violation of work obligation, i.e., non-compliance with work discipline by the employee, as well as (ii) in the case there is a justified reason for termination that relates to the employee’s ability to work and their behavior, specifically if the employee does not achieve work results or does not have the necessary knowledge and skills to perform their tasks.
Namely, the Law stipulates that the employer will, before termination of the employment contract in the case referred to in Article 179, para. 2 and 3 of the Law (due to the violation of work obligation, i.e., non-compliance with work discipline), warn the employee in writing about the existence of a reason for termination of the employment contract, and provide them with a deadline of at least eight days from the day of delivery of this warning to respond to the statements of the warning.
In addition to the above, the Law prescribes that the employer may terminate the employment contract (or impose one of the measures from Article 179a of the Law) to the employee from Article 179, para. 1, point 1 of the Law (who does not achieve work results or does not have the necessary knowledge and skills) if he previously delivered to the respective employee a written notice regarding deficiencies in their work, as well as instructions and an appropriate deadline for improving the work, and the employee does not improve the work within the provided deadline.
In addition to the violation of work obligations, i.e., non-compliance with work discipline, and failure to achieve work results, i.e., lack of necessary knowledge and skills, the Law prescribes other reasons for employment termination as well (Article 179).
Judgment of the Supreme Court of Cassation
In the judgement of the Supreme Court of Cassation passed on May 5, 2022, under the no. Rev2 2140/2021 (“the Judgement”), the subject court has taken the position that an employment contract with the probation period can be canceled prior to the expiration of the term for which probation period was contracted, but if there are grounds for cancellation set out by the Law.
The Judgment further states that the provisions of the Law on termination reasons and procedure apply accordingly to the case of termination of an employment contract with probation period. Thus, as in the specific case the plaintiff’s employment contract was canceled before the expiration of the period for which probation period was contracted, the defendant as the employer was obliged to notify the plaintiff in writing of the deficiencies in their work and provide them instructions and an appropriate deadline for improving the work. Namely, regardless of the established probation period, in order for the employment contract to be canceled one of the reasons for termination stipulated by the Law must be determined.
The Judgement represents an unexpected and unusual position taken in judicial practice on this issue, for several reasons.
Namely, it differs from the previous practice in this regard – both judicial and Opinion of the Ministry of Labor and Social Policy no. 011-885/2008-02 from February 4, 2008, according to which provisions of the Law, which stipulate the obligation to issue the written warning to the employee, do not apply to the termination of employment contract by the employer during the probation period, i.e., upon expiry of probation period, in terms of Article 36 of the Law. In addition, one could question the foundation of conclusions presented in the Judgment in the context of the Law, since in this case they were interpreted quite extensively – while the probation period essentially represents an exception compared with the general regime of employment relations, i.e., their establishment, therefore it should be narrowly interpreted.
Specifically, when prescribing the procedure for termination of an employment contract, the Law explicitly refers to the provisions that regulate the reasons for termination for which the procedure in question is applied; namely (i) it prescribes the obligation to issue a written warning to the employee in a situation where the reason for termination is a (culpable) violation of work obligation, i.e., non-compliance with work discipline; while (ii) the obligation to issue a written notice (in relation to work deficiencies and instructions for their overcoming) in stipulated with respect to the case when the reason for termination is failure to achieve work results, i.e., lack of necessary knowledge and skills.
However, the provisions in question do not mention the cancellation of the employment contract during the probation period, while on the other hand the provisions of Article 36 of the Law, which regulate the probation period, prescribe that both the employee and the employer, during this period, i.e., before its expiration, may cancel the employment contract with a notice period that cannot be shorter than five working days, whereby the employer is obliged to explain the cancellation of the employment contract. The Law, however, does not prescribe the content of the subject explanation, i.e., does not establish that termination in this case is possible only if there are reasons stipulated by Article 179 of the Law, i.e., the existence of which the employer is obliged to explain.
Finally, this position of the court is contrary to the substance of the institute of probation period, and the purpose of its contracting thus becomes futile.
Therefore, it remains to be seen what implications the Judgment will have on the positions, i.e., judgments of the lower courts in the proceedings that are being conducted, i.e., which will be conducted in the future in relation to the termination of employment contract during the probation period.
By Lara Maksimovic, Senior Associate, PR Legal
