New Law to be Introduced in Serbia: Labor for Lease

Photo: Marko Rupena / Kamerades

Adoption of the unfavorable law on agency employment and its future regulation will only worsen the already poor labor relations.

Regional stability, jump to the 47th place on the World Bank’s “Doing Business” list, decrease in public debt, GDP growth, etc. New job and factory openings, increased minimal wage, etc. Those who stand on the other side of the regime’s wish list, students and/or workers, do not feel these statistics. They did not sense the unemployment drop to 13% since the last Labor Law was adopted. The data is attractive, and the authorities never fail to mention it, but they omit the fact that the statistical result is a consequence of employment broadly defined.

Namely, for the official stats one is considered employed even in situations when he or she can hardly be aware of it. For example, an hour of lawn mowing at a neighbor’s for a bottle of beer would be considered as employment for a full week, thus participating in the Serbian economic growth. Popularly called “workers for lease”, those who work through employment agencies which send laborers to work temporarily, are more aware when they are employed, be it even for a week.

Although it is hard to determine the exact number of workers who are employed in this manner because of lacking legal regulation, the estimated number is somewhere between 60,000 and 80,000. The number of agencies which mediate employment and offer “lease” of workers has increased last few years. The arguments for this kind of employment usually come to “the needs of contemporary economy” which demand decrease of bureaucratic costs, quick engagement of labor according to job’s volume and cheaper labor for unskilled assistant staff positions.

Validity of such arguments is certainly questionable, i.e. “the needs of contemporary economy” is thus defined exclusively as the employer’s need to decrease business costs and risk. However, this type of employment is becoming dominant in peripheral economies, like Serbia’s, whose competitiveness is largely based on jobs’ flexibility, very low labor price and attraction of direct foreign investments. Thus, it is not surprising that the adoption of a legal frame which will regulate and limit employment through agencies which lease workers is being delayed for quite some time.

What kind of labor is it?

Workers who are employed through agencies cannot exercise basic rights guaranteed by labor law, according to data which is publicly accessible and presented in numerous media reports. Often the minimum wage and basic taxes for health and social protection are bypassed in contracts for temporary and occasional jobs. Even if the worker has a contract signed for some duration with the agency, commonly he or she can be fired at any moment if they are not needed any longer. Thus they cannot exercise their right to sick or paid leave, nor they can plan ahead. Abuses occur also in the exchange of workers between agencies with which the employer-user has contracts, job descriptions are changed in the contract so that all possible rights which a worker could exercise after a longer employment are bypassed.

For example, almost a thousand workers were employed at Belgrade’s airport “Nikola Tesla” for years through youth cooperatives.1 Aleksandar Ivić who had been employed for eight years at the airport through the “Knez” youth cooperative, stated for portal that he had been signing a new contract for temporary and occasional jobs every 120 days, and that last two and a half years he was doing the same job although his job’s description was different in the contract. It is not a secret that employees are underpaid by employers-users in positions which are much better paid in case of directly employed personnel.

The tendency of temporary employment through agencies has become omnipresent in almost all parts of the public sector, from public and communal services to state administration and judicature. Ban of employment in the public sector negatively affects the public companies’ market competitiveness and public services’ quality, which is often dealt with by hiring workers through agencies for temporary employment.

An illustrative example is the case of Belgrade’s public cleaning service which hires almost a thousand workers through employment agencies with contracts for temporary and occasional jobs. In a strike late last year, workers hired through an agency alarmed the public to the impossibility of exercising their right to vacation and sick leave and catastrophic working conditions. Some of them have been employed like this more than ten years. This kind of employment makes union organizing impossible and places lowly qualified labor (maintenance, security and jobs which are not planned by or were cut during systematization) in the most precarious position. Consequences are the hardest for those who are already in the worst material position, so in addition to being poorly paid, their work and lives are becoming uncertain as well.

The contentious law

Ever since 2013, when Serbia ratified International Labor Organization’s Convention 181 on private employment agencies, a special law which would regulate employment through agencies is being announced. Serbia officially introduced this type of employment into its national framework by signing the Convention and is obliged to regulate it in its national legislature.

The main issue in this type of employment, and the reason why workers are in such an uncertain and unprotected position, is the fact that the employer is an agency in this case, while the employee works at the employer-user’s, i.e. the company which leased a worker from the agency (employer) for a limited time. Lack of the legal frame causes much ambiguity. For example, it is not clear where labor can exercise the right to unionize or the right to collective bargaining, how the responsibility for damage compensation is determined, etc. Labor Law’s changes and additions from 2014, which were supposed to regulate this field, provide only for the possibility of sending employees to work for another employer, but also make termination of employment much easier, which accelerated opening of dozens of agencies which lease labor along with mediating employment.

A working group which was to draft the Law on directing employees for temporary labor was formed in March 2016, consisting of union representatives, relevant ministries, Chamber of Commerce and employers’ representatives, and legal experts from the field of labor law, as well as representatives of largest agencies for mediation in employment. When interviewed for Mašina, Zoran Stoiljković, president of the Trade Union Confederation Nezavisnost, pointed out that unions joined the working group for drafting the Law so that they could influence the drastic limitation of this type of employment.

Public companies hire their former workers under much more unfavorable conditions this way. This cannot be the purpose and meaning of those agencies, and it is not decent of unions to even discuss it. For us the employment through agencies is justified only for jobs which have seasonal, temporary character.

Ivica Cvetanović, president of The Confederacy of Independent Unions, highlights that employment through agencies is an exception in other countries, while it is clearly becoming a norm in Serbia.

Although the draft is not complete, what we can see during negotiations is that there is no will to include protection mechanisms for labor in this proposal and limit agency employment. In case of Slovenia, for example, the proposal stipulates that the employee has to pay higher taxes if a worker is to be employed for a shorter duration through an agency.

It is very interesting that only the three largest foreign agencies which are most competitive in the labor market were invited to the working group. According to Nikola Milosavljević, representative of the Adecco multinational employment agency, agencies do not only mediate in the labor market but also participate in attracting direct foreign investments. This is a race to the bottom in which agencies which can hire the largest flexible reserve army of labor at lowest costs have access to creation of the law which would regulate their existence.

Such a situation forced smaller agencies, mostly domestic, where working conditions are not any better, to attempt to ensure their market survival by delivering to the working group, which they did not join, complete law’s draft proposal. Paradoxically, this proposal contained the possibility of exercising workers’ collective rights, damage compensation, earlier termination of employment and, most importantly, limitation of the number of workers employed through agencies at a single employer-user’s.

The proposal was drafted by Mario Reljanović, associate professor at the Law Faculty of the Union University. The draft, which was later supplemented by unions, was rejected by the Ministry of Labor, while the working group received a version of the law which, according to Reljanović, completely ignored the protective labor measures mentioned previously. There is no legitimate justification for lack of limitation of the number of workers temporarily employed through agencies, since that simply cannot correspond to the job volume performed by an employer. Additionally, if the number of workers employed through agencies is not limited at a single company, it would be easy to avoid the Directive of the European Parliament and the Council of EU on temporary agency work, which imposes that workers hired through employment agencies enjoy at least same rights as if they were directly hired. If, for example, all workers in a company were employed through an agency, all work conditions for all of them would have to be equal.

Possible resistance

It seems that the authorities do not intend to limit this precarious and underpaid type of labor, to say the least. Jugoslav Ristić, president of the Council of Associated Independent Unions of Kragujevac, stated for Mašina that the only expectation we can have of the Law on directing employees for temporary work is legalization of the already existing exploitative practices.

It is perfectly clear that this type of labor only exists to enrich individuals at the expense of a large majority. It is also obvious that the authorities are rushing to appease foreign companies and adopt such a law which would only push us further into precarity, poverty and inequality.

Ristić is skeptical whether unions will manage to stop this unfavorable law’s adoption, and sees the only hope in broadening of the socio-political front of resistance.

This incredulity can be connected to the failure of large unions to resist the adoption of Labor Law’s changes and additions in 2014. It is a fact that the regime fought a strong media war against the unions during the struggles against the new Labor Law. However, that is not a valid justification for the unions’ lack of ability to animate non-unionized labor and mobilize a broader public. The recent wave of protests put forward slogans and requests which pointed towards the potential for creation of a broader social resistance. If union leaders had stopped wondering where students had been in 2014, maybe they would have noticed them in the streets, at universities, in precarious jobs. Although, not all who protested were students, some had been employed through youth cooperatives and agencies or were employed illegally, many of them were unemployed, and non-unionized.

Translation from Serbian: Nenad Porobić

The text was written with the support from Olof Palme International Center and presents the continuation of research of themes addressed at the Labor in Digital Age conference which was organized by Social Center October with the support from the previously mentioned foundation.



  1.  A specific type of non-profit organization which is stimulated by tax breaks for the purpose of performing economic, social and pedagogical role for students and unemployed youth.

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