Milena Jakšić Papac, President of the HR Committee of the FIC (Karanović & Nikolić)

Continuing Reforms Is A Prerequisite For Creating New Jobs

Serbia has huge potential in the field of human resources, but it lacks the legal framework that would support this exceptional chance and contribute to fully utilising the potential of this market

Milena Jaksic Papac, President of the Human Resources Committee of the FIC

In managing the FIC’s goals aimed at improving the overall business environment in Serbia, the Council’s HR Committee actively monitors and analyses the legal framework in the field of labour and employment, presenting its own proposals for its improvement. As a topic of great importance, both to the business community and to citizens in general, this is one of the FIC’s key priorities.

The HR Committee has achieved great success in its activities to date, and it considers that the greatest advance in regulations were the 2014 amendments to the Labour Law, which responded to about 65% of recommendations contained in the White Book. There is, however, continuing room for progress, while in the past three years we have reached a standstill in reforms. The Council fully understands the sensitivity of this regulatory area but considers that Serbia should continue the commenced labour market reforms in order to increase the number of new jobs created and the country’s competitiveness on the global market.

The priority on this front should be to modernise regulations, introduce digitisation and ensure that all market participants comply with regulations. So, for example, the Labour Law still contains unpopular solutions that envisage a very complex structure of earnings, which often complicates the ability to project business costs and imposes a number of administrative obligations on employers, without creating real value for employees. It envisages a mechanism for calculating additional earnings that leads to absurd solutions whereby employees receive higher incomes during absences from work than during periods of regular work, while the burden of such a legal solution lies with companies that have the practise of paying bonuses or rewarding employees in other ways. This demands an urgent amendment to regulations in a way that will support this practise of employers, instead of the existing solution that destimulates. Also essential are amendments to regulations aimed at harmonising with modern digitisation processes, primarily when it comes to records in the field of labour, as well as introducing the possibility of more flexible and less formal communication between employers and employees.

The Labour Law envisages a very complex structure of earnings, which often complicates the ability to project business costs and imposes a number of administrative obligations on employers, without creating real value for employees

By bringing together companies that are among the best employers on our market, who comply with regulations, regularly settle all of their obligations, offer excellent working conditions and invest in their employees, members of the Council decisively oppose all forms of the grey economy, which create unequal business conditions and disrupt the rights of employees. As such, they insist on strict supervision over the application of laws and the creation of an efficient system of labour inspections.

The Committee’s members are united in their view that Serbia has great potential in the field of human resources, but that it lacks the legal framework that will support this exceptional chance and contribute to the fully utilising the potential of this market.

A precondition for the creation of new jobs is the creation of a good and predictable business climate and an efficient administrative framework in which companies can expand their operations.Milena Jaksic Pepec