In Serbian labor law, permanent employment is a general rule (“default” option), while fixed-term employment is only possible in certain situations defined by law. This is intended to promote job stability and thus improve the position of employees, although it is questionable whether this has actually been achieved in practice (as abuses are relatively common in practice).
For the same reason, the law provides that the termination of the employment relationship by the employer must be based on the legally recognized grounds, relating to employer’s needs (redundancy), employee’s conduct or his/her work. Moreover, termination of employment must be implemented in a formal procedure specified by the law.
In this way, the employer bears most of the risk if the employment does not work out as expected. To mitigate this risk, the law allows the parties to stipulate probation work, as a kind of trial period and transitional arraignment to full employment status, which enables the employer to check employee’s skills and professional abilities.
During the probationary period, both the employer and the employee are entitled to terminate the employment relationship subject to a notice period of 5 days. The employer is also obliged to give reasons for such a decision. In addition, the law stipulates that the employment relationship is terminated at the end of the probationary period if the employee does not demonstrate sufficient professional skills (otherwise the employment is established in “full capacity”).
Probation work may be stipulated for up to 6 months, both for fixed-term and permanent employment relationships, although the latter is clearly more relevant for employers.
Therefore, the law allows the employer to terminate the employment relationship during the probationary period in a simplified procedure with fewer formalities and risks. Even though the law does not prescribe what kind of justification the employer must provide and how detailed it must be, the burden for the employer and the risk are undoubtedly less than with the “regular” procedure for terminating the employment relationship due to non-performance (which, among other things, provides for an additional period for improving performance).
This interpretation was for a long time beyond doubt and was confirmed by case law, until it was called into question by some recent decisions of the Supreme Court of Cassation. In the relevant court decisions (the last one we are aware of dates back to 2022), it is asserted that the probationary period as such does not constitute grounds for termination of the employment relationship, and that even during this period the “general” grounds for termination must be present. In other words, the grounds for dismissal and the procedure for “normal” employees (who are not in the probationary period) should apply. This certainly applies (according to the court) to a dismissal before the end of the probationary period, while it is not entirely clear whether this also applies to dismissal upon expiry of the probationary period.
The aforementioned court decisions greatly diminish legal certainty and undermine the essence of probation work, which is primarily reflected in more flexibility and easier “exit” from the employment relationship. We believe that this interpretation is formally incorrect, since the statutory provisions regulating probationary work do not refer to the general procedure for terminating the employment relationship, as well as logically untenable, since it calls into question the very purpose of probationary work.
In any case, the inconsistent and contradictory case law is something that employers need to take into account when stipulating probation work and in particular, when terminating employment. We hope that the case law will eventually be harmonized to eliminate conflicting interpretations and the resulting legal uncertainty. In the meantime, if a dismissal is warranted, employers are better off deferring this decision until the end of the probationary period and invoking Article 36(4) of the Labour law in the dismissal act. This is because the “problematic” court decisions do not explicitly call into question the termination of the employment relationship on these grounds (in contrast to termination before the end of the probationary period). Even if the law does not expressly provide for it, the termination of the employment relationship for these reasons should also be adequately justified, i.e. the conclusion regarding non-performance should be supported by adequate data and explanations.
This text is written for informational purposes only and does not constitute legal advice. We are at your disposal for any additional information.
