Redundancy in Serbia: A Practical Guide of the Legal Process

In the Serbian legal landscape, the process of redundancy—known as Tehnološki višak—is governed by strict procedural rules under the Serbian Labor Law. In practice, procedural compliance is far more important than the business rationale itself.

It is a critical distinction to understand: in the event of a dispute, Serbian courts generally do not assess the economic justification or business expediency of a company’s decision to downsize. Instead, judicial review focuses almost exclusively on whether the employer strictly complied with every procedural requirement prescribed by law.

For this reason, understanding the redundancy procedure in Serbia is essential for both employers and employees.

The Two Legal Pathways: Program vs. Decision

An employer’s procedural obligations depend primarily on the number of employees affected within a 30- or 90-day period.

1. When a Formal Redundancy Program Is Mandatory

Under Serbian Labor Law, employers must adopt a formal Program for Solving Redundancy when specific numerical thresholds are met.

Thresholds:

• 10 employees in a company employing 20–100 employees
• 10% of employees in a company employing 100–300 employees
• 30 employees in a company employing more than 300 employees

Consultation Requirement:

The employer must submit the draft redundancy program to the representative trade union and the National Employment Service for their opinion.

Mandatory Content:

The redundancy program must clearly define:

• The business reasons for redundancy
• The criteria for selecting redundant employees
• Measures aimed at promoting re-employment

Failure to comply with these obligations may result in annulment of dismissals in court proceedings.

2. Redundancy Without a Mandatory Program

If the number of affected employees falls below the statutory thresholds, the employer is not required to adopt a formal redundancy program.

However, the employer must still issue a formal Decision on Redundancy.

Although external consultation with trade unions is not mandatory in this case, the content of the decision must reflect the same protective logic and legal rigor as a formal program in order to withstand judicial scrutiny.

In practice, courts apply the same strict procedural standards regardless of whether a formal program was required.

Publication and Legal Effectiveness of Redundancy Acts

Transparency is a mandatory element of the redundancy procedure in Serbia.

General acts and individual decisions related to redundancy must be published on the employer’s notice board for eight days in order to become legally effective. Proper publication ensures that the timeline for effectiveness is clearly documented and legally verifiable.

Failure to comply with publication requirements may invalidate the termination.

Essential Steps in the Redundancy Procedure

Regardless of whether a formal program is required, the redundancy process follows a strict chronological sequence:

1. Amendment of the Rulebook on Job Systematization

The employer must first amend the Rulebook on Systematization of Jobs in order to:

• Eliminate a specific position, or
• Reduce the number of employees performing a particular role

This step establishes the formal organizational basis for redundancy.

2. Application of Objective Selection Criteria

The obligation to apply selection criteria depends on the structure of the workforce reduction:

• Position Elimination:
  If an entire position is abolished, selection criteria are not required.
• Staff Reduction Within the Same Position:
  If the number of employees within a position is reduced (e.g., from five to three), the employer must apply objective, measurable, and non-discriminatory selection criteria.

Improper or arbitrary selection is a common ground for court disputes.

3. Severance Payment (Otpremnina)

If measures aimed at reassignment or alternative employment cannot be applied and the employee must be terminated due to redundancy, the employer has a statutory obligation to pay severance compensation.

The full severance amount must be paid before the termination of the employment. Payment after termination may render the dismissal unlawful.

Redundancy severance pay is a mandatory legal requirement and represents one of key elements of lawful termination under Serbian employment law.

4. Issuing the Dismissal Decree

The employer must issue a formal Dismissal Decree confirming that all legal conditions for termination due to redundancy have been fulfilled.

This act is declarative in nature but essential for procedural validity.

Judicial Review of Redundancy Decisions in Serbia

Although Serbian courts do not evaluate business expediency, they carefully examine potential abuse of rights.

Courts will assess whether the redundancy process was used to conceal another motive—such as dissatisfaction with performance or personal conflict—without following the appropriate disciplinary or performance-based termination procedures.

If a court determines that the redundancy was merely a pretext (a “sham redundancy”), the dismissal may be annulled, and the employer may face reinstatement obligations and back-pay liability.

Post-Redundancy Restrictions and Employee Rights

1. Hiring Restriction

An employer may not hire another person for the same position within three months following the redundancy dismissal.

2. Unemployment Rights

 An employee dismissed due to redundancy retains the right to unemployment benefits and health insurance, provided the general statutory conditions are met.

Conclusion: Procedural Compliance Is Decisive

Under Serbian Labor Law, redundancy is primarily a matter of strict procedural compliance. Even minor administrative errors may result in court annulment of dismissal decisions.

Because courts focus on “how” the procedure was conducted rather than “why” the business decision was made, professional legal guidance is essential to mitigate the risks of reinstatement claims and financial liability.