How to implement flexible work arrangements in Serbia in the post-Covid-19 era

As the pandemic lasted almost two years, flexible work arrangements became a habit for both employers and employees. On the one hand, employers saw it as a chance to cut costs while incentivising their employees, especially in tech and other industries that compete fiercely for the best workers. On the other hand, employees have been working like this far too long to return to the office without consequences to their private lives, while some still have fears around Covid-19.

Thus, employers now face the dilemma of whether to let employees stay at home, order them to return to the office, or agree on a hybrid arrangement. When making this decision, employers should consider all the issues related to the implementation of flexible work arrangements in Serbia, where this type of work is underregulated.

Legal background

In principle, the Serbian Labour Act regulates remote work or work from home as a sui generis employment agreement only. Thus, under the Labour Act, work from home or any remote arrangement could be introduced only through a new employment agreement and not through an annex to the employment agreement. However, in view of the urgency of the Covid-19 outbreak, employers quickly transferred their employees to work from home by concluding annexes to existing employment agreements.

A little while later, once the government had adopted a regulation on work organisation during the state of emergency, employers continued to transfer employees to work from home unilaterally via a decision on transfer.

The Ministry of Labour then issued Guidelines on Occupational Health and Safety in the Event of Remote Work (the "Guidelines"), which again confirmed that work from home / remote work should be introduced by concluding annexes to the employment agreements with employees. Relying on the Guidelines, employers are now continuing to transfer their employees by concluding annexes to employment agreements, irrespective of the uncertainties of the Labour Act. Nevertheless, due to the lack of a sufficient legal framework, employers should focus more on creating their own internal rules for work from home.

Issues with flexible work arrangements

In practice, by concluding the necessary annexes to effectuate the transfer from office to home or other remote premises, the agreed place of work is being changed (from office to home or other premises).

However, if the employer wishes to end the remote work and order an employee to return to the office, another annex to the employment agreement needs to be concluded. Here the risk arises that the employee's refusal to sign such an annex may not be a just cause for termination of employment, putting the employer in a deadlock.

Also, employers are often faced with problems of ensuring the discipline of employees working outside the office without overstepping privacy rights and data protection regulations. Therefore, most of them prefer to regulate work from home in such a way that they can order employees to return to the office if they violate discipline rules or are underperforming.

Ensuring occupational health and safety

Employers must ensure that employees are working in a healthy and safe environment and to do so there are many requirements they need to comply with. For instance, employers need to assess the occupational risk in premises where employees will work. This is very hard to ensure, as employees need to voluntarily allow the employer to visit their homes. Employers are therefore wondering how to comply with their occupational health and safety obligations without invading their employees' privacy, and how to ensure that employees comply with health and safety procedures when working outside their reach.

Delivery of documents

When implementing work from home employers should also consider the potential problems associated with delivering certain documents to employees.

Given that the Serbian Labour Act is somewhat outdated with regard to the demands of a modern business environment, many work-related documents such as payslips and decisions on annual leave are still usually provided to employees in hard copy, although electronic delivery is possible.

Employers should therefore create internal rules for delivery of documents and for communicating any work-related messages to employees who are working remotely (e.g. invitation to come to the office for a meeting, annual performance appraisal, etc. and disciplinary measures if employees ignore these rules).

Health insurance and sick leave compensation for flexible work outside Serbia

The Serbian Labour Act fails to explicitly prescribe if only work within Serbia is encompassed in the definition of remote work or if employees can also work remotely outside Serbia. Nevertheless, considering the general definitions of the Serbian Labour Act, it may be concluded that only work within Serbia's borders is included under remote work.

As in the case of flexible work, employers in principle do not have full control over employees, who may leave the country and continue to work abroad. Should such an employee fall ill, they will not be able to enjoy protection under mandatory health insurance in Serbia. Also, the employee will not be able to officially take sick leave in Serbia, unless they visit a doctor in Serbia and obtain a medical report from a Serbian official health institution (which likely will not be possible in most situations). Thus, if official sick leave is not taken, the local employer would have to completely finance the sick leave if it chooses to compensate the employee throughout their inability to work.

Conclusion

Faced with the new reality, employers are now trying to overcome local legal limitations on flexible work arrangements and associated occupational health and safety obligations.

To eliminate or at least mitigate some of these issues, employers should be creative when agreeing on the terms of flexible work arrangements and prepare appropriate internal rules and policies.

Author: Marija Vlajković