The Action Plan of the Government of the Republic of Serbia from 2019 envisages the extension of the scope of application of the Law on Simplified Work Engagement in Seasonal Jobs, which entered into force in 2018.
Serbia is currently preparing a new law on seasonal and temporary work enegagement. One of the goals of the new law is to eradicate illegal work by increasing the number of activities to which it will be applied, in addition to the activities in the fields of agriculture, forestry and fishing that are currently regulated by it.
The draft envisages a significant increase in the number of jobs that fall under its application, such as those in construction, hospitality, housework, etc. Since the before mentioned activities are not seasonal in nature, the new law will bear a new name - Law on Work Engagement due to Increased Volume of Work in Certain Activities. Upon adoption, it will replace the Law on Simplified Work Engagement in Seasonal Jobs. Considering the fact that its draft sparked a vigorous debate during the public debate, and that its adoption is still in the procedure, in this article we focus on analysis of the current legal framework.
LEGAL NATURE OF SEASONAL WORK ENGAGEMENT CONTRACTS
It clearly follows from the aforementioned legal provisions that seasonal work is actually work outside employment relationship.
The rights enjoyed by persons performing seasonal work:
• Right to safe and healthy working conditions;
• Right to social security;
• Right to prevent abuse at work;
• Prohibition of discrimination.
Other provisions of the Labor Law do not apply to seasonal workers, i.e. they do not exercise the right to limited working hours, the right to sick or maternity leave, nor to other rights enjoyed by employees.
Article 4, Paragraph 3 of the Law on Simplified Work Engagement in Seasonal Jobs prescribes that in case of issues that are not specifically regulated by that law, the provisions of the Labor Law regulating temporary and casual work are to be applied.
A Contract on Temporary and Occasional Work defines conditions of temporary employment (short-term and continuous) and ocasssional jobs (short-term jobs that are not performed continuously). However, in reality, these terms are interpreted quite broadly. Unlike the previous labor legislation, the current Labor Law does not dictate that the mentioned job forms must be part of the employer's activity. According to the Opinion of the Ministry of Work, Employment, Veterans' and Social Issues, the workplace for which a contract for such job forms is concluded does not even have to be contained in the Rulebook on Internal Organization and Systematization of Job Positions.
Due to quite broad interpretation of this legal entity and a loose legal framework, but also bearing in mind that this type of contract is ment for short-term jobs of seasonal, temporary character, it is suitable for it to be regulated by a law that regulates seasonal jobs.
On the other hand, certain limitations are still present. The Labor Law imperatively prescribes following rules regarding:
I. Persons with whom such contract can be concluded
II. Duration of such contract
III. Forms of such contract
I. CONTRACTING PARTIES
A Contract on Temporary and Occasional Work is concluded between an employer and a hired person. Therefore, as stated above - the hired contractual party - the contractor does not have the status of an employed person. The contractor is a natural person who assumes the obligation to perform the tasks provided for in the contract.
The law stipulates 4 types of contractors:
- an unemployed person;
- an employee who works part-time to full-time;
- a beneficiary of old-age pension;
- a person who is a member of a youth or student cooperative, in accordance with the regulations on cooperatives.
Article 37 of the Labor Law stipulates that an employment contract for a definite period of time can be concluded to establish an employment relationship of certain duration that is determined in advance, by objective reasons. It clarifies that an employment relationship under this contract cannot last for longer than 24 months, regardless of prospective breaks. If the employee, however, continues to work for the employer for more than 5 working days upon the expiry of the employment contract for a definite period of time, the employment relationship is considered to be established for an indefinite period. This has also been confirmed by the Ministry's Opinion no. 011-00-151/2015-02 from 17 March 2015, as well as by judicial practice in countless cases.
Given the above mentioned, the legal nature of the contract on temporary and occasional work raises certain concerns. The conclusion is made that the nature of such contract falls under the Law on Obligations, most of all because the relatioship regulated by this type of contract cannot turn into an employment relationship.
In accordance with a general contract on temporary and occasional work, seasonal jobs support the same principle. A seasonal worker is not an employee. The Law on Simplified Work Engagement in Seasonal Jobs designates a seasonal worker as an engaged person, which leads to further differences in the scope of rights that an engaged person exercises on the basis of work engagement.
"A seasonal worker is a natural person hired by the employer to perform seasonal work with monetary compensation for that work." (Article 3 of the Law on Simplified Work Engagement in Seasonal Jobs).
"Engagement based on this Law is work outside employment relationship."
"The provisions of the law regulating work - in the part regulating temporary and occasional work - are applied to issues of employment in seasonal work that are not specifically regulated by this law." (Article 4 of the Law on Simplified Work Engagement in Seasonal Jobs)
II. DURATION OF THE CONTRACT
The duration of a contract on temporary work is limited to a maximum period of 120 working days in a calendar year (Article 15, Paragraph 2 of the Law on Simplified Work Engagement in Seasonal Jobs).
The Article 15, Paragraph 3 of the Law on Simplified Work Engagement in Seasonal Jobs nevertheless makes a difference between a Contract on Seasonal Work and a General Contract on Temporary and Occasional Work, by limiting the practical abuse of the Contract on Temporary and Occasional Work.
"An employer referred to in Article 2, Paragraph 1 of this law who hires a person for seasonal jobs, as defined by this law, may hire the same person on the basis of a contract on temporary and occasional work in accordance with the law regulating work, provided that the total number of working days on both grounds cannot amount to more than 120 working days in a calendar year."
To explain further, the Labor Law, Article 197, limits the duration of a general contract on temporary and occasional work to 120 days. The time limit has to do with the calendar year, from January to December, whereby non-working days are not included.
Nonetheless, despite the fact that the Labor Law imperatively prescribes the maximum duration of a work contract, in reality it is not uncommon for general contracts on temporary and occasional work to be concluded successively with the same person, even after the expiry of the mentioned term. In such case, the employer and the contractor conclude a new contract, but for some other job position. This practice has also been supported by the Opinion of the Ministry of Labor, Employment, Veterans and Social Affairs No. 011-00-483/2015-02 from 8 May 2015. The Opinion states that a worker can work for the same employer for a maximum of 120 working days on one job, and once the work is finished, the worker can conclude a contract on temporary and occasional work for another job position.
The Law on Simplified Work Engagement in Seasonal Jobs in the quoted article (Article 15, Paragraph 3) nevertheless limits seasonal work by prescribing that the total number of working days for both the Contract on Seasonal Jobs and the Contract on Temporary and Occasional Work combined cannot amount to more than 120 working days in a calendar year.
III. CONTRACT FORM
Since Article 197, Paragraph 2 of the Labor Law stipulates that the Contract on Temporary and Occasional Work must be concluded in writing, it should be considered that the legislator excluded the possibility of the deception of concluding this contract by undertaking the work that is its subject, i.e. starting work without concluding the contract in writing.
Article 5 of the Law on Simplified Work Engagement in Seasonal Jobs prescribes a deviation from this rule by prescribing that with a seasonal worker working, it is considered that the worker has accepted the working conditions and that an oral contract on seasonal work has been concluded.
Therefore, the written form of a contract on seasonal work is not required. The employer is however obliged to, in accordance with Article 11 of the Law on Simplified Work Engagement in Seasonal Jobs, report seasonal workers to the Tax Administration.
Based on all of the above, what cannot remain unnoticed is the trend towards liberalization of labor legislation and larger number of different types of work engagement contracts, which should compensate for the fact that for certain jobs employment contracts are still not being concluded. In addition to such freely set conditions and narrowed range of obligations of the employer towards the employee, i.e. the hired person, most employers decide on precisely these forms of work engagement. The Law on Seasonal Jobs, which is in the process of being passed and will in all respects replace the Law on Simplified Work Engagement in Seasonal Jobs, will further expand the scope of application to activities in which, according to the current legislation, an Employment Contract is a must. It remains to be seen if the goal of the new law to reduce the number of employees who work illegally will be achieved.
Nikola Komnenović, Partner
Branka Dželajlija, Senior Associate
*The information in this document does not represent legal advice and is provided for general informational purposes only.
**Partner, Senior Associate, Associate and/or Junior Associate refers to Independent Attorney at Law in cooperation with IVVK Lawyers.