Serbia’s Staff Leasing Is Finally Regulated

After several delays and various proposals and working groups, the law regulating staff leasing in Serbia was finally adopted in December 2019, and went into effect in March 2020. In many countries, staff leasing is referred to as agency work.

The staff leasing law envisages that the staff leasing agency enters into an employment agreement with an employee for an indefinite or definite period, while the agency and its company client enter into a legal relationship based on an agreement regarding the assignment of these employees.

The law implements the equal treatment rule from EU Directive 2008/104/EC. According to the rule, leased employees are entitled to the same working conditions as other employees at the client company in terms of the duration and scheduling of working hours, overtime and night work, pauses during work, paid leave, and the elements for the calculation and payment of salaries. Furthermore, leased employees are guaranteed the freedom to organize, act, bargain collectively, and participate in a strike. The client company is required to provide these work conditions to the leased employees, while the staff leasing agency is responsible for the payment of salary (although the client company has joint liability with the agency for salary payment and may be required to do so if the agency defaults).

Under the law, the client company is limited to engaging no more than 10 percent of its total number of employees as leased employees, if the client company has more than 50 employees. There are also specific thresholds for organizations employing less than 50 employees. On the other hand, the law provides that an organization can have an unlimited number of people working on a staff leasing basis if the leased employees are employed with the staff leasing agency on an indefinite period basis.

The staff leasing agency may assign employees to the client company for a temporary period only in certain situations set out by the labor law (e.g., an increased workload, replacement of an absent employee, work on a project with limited duration, etc.).

A leased employee who is employed for a fixed term (also referred to as a defined term) and who had previously worked for the client company on a fixed-term basis directly or through the same or different staff leasing agency contrary to the provisions of the law, or who continues to work for the client company for at least five working days after the expiration of the lease period, will be considered permanently employed with the client company.

Written by Milena Jakšić Papac and Miloš Rubežić of Karanović & Partners and Roger James of Ogletree Deakins International LLP

© 2020 Karanović & Partners and Ogletree, Deakins, Nash, Smoak & Stewart, P.C.