Recently, the Supreme Court of the Republic of Serbia, in Decision no. Rev2 742/22 dated June 15, 2023, took the stance that when an employee was aware in advance that their employment was time-limited depending on the nature and volume of work, such an employment may last shorter than a certain tentative period. Consequently, the employer does not have the obligation to explain the reduction in the volume of work in the termination resolution.
This would be a situation where the employment contract states that it is concluded for a fixed term, in accordance with Article 37, paragraph 1 of the Labor Law, as long as the increased work needs last, but no later than a certain date.
Below, we analyze the reasoning of the judgment.
Circumstances of the case
Court decisions
The lower courts concluded, and the Supreme Court confirmed, that the conditions for annulling the termination decision were not met, thus rejecting the lawsuit as unfounded.
In its reasoning, the Supreme Court refers to Article 37, paragraph 1 of the Labor Law, which stipulates that an employment contract can be concluded for a fixed term, for establishing an employment relationship whose duration is determined in advance by objective reasons justified by a deadline, the completion of a certain job, or the occurrence of a specific event, for the duration of these needs.
Additionally, paragraph 2 of the same article stipulates that the employer may conclude one or more employment contracts, based on which the employment relationship with the same employee is established for a period that, with or without interruptions, cannot exceed 24 months.
The Supreme Court further explains the meaning of this provision, stating that it allows the employer, when the increased volume of work requires additional labor, to engage a certain number of additional employees to successfully handle the increased volume of work, for as long as such a need exists. This is why such work is time-limited.
Furthermore, the Supreme Court states that this does not mean that the employment cannot last shorter because it is an indicative period, representing the maximum duration of fixed-term employment. The court believes that the employer is autonomous and independent not only in determining the increased volume of work and the need for more employees in certain jobs but also in determining the reduction of work volume and the consequent need for fewer employees in those jobs.
As the plaintiff was aware in advance that her employment was time-limited depending on the nature and volume of work, the court holds that the defendant is not obliged to specifically explain the reduction in the volume of work.
Therefore, considering that the plaintiff's fixed-term employment was established without a fixed duration period, the Supreme Court believes that the lower courts correctly determined that the termination decision was lawful and correctly concluded that the conditions for annulling the termination decision were not met.
Conclusion
Generally speaking, the position of domestic court practice in employment matters can be described as predominantly conservative, and any decision that deviates from this draws special attention (and praise).
We can agree that fixed-term employment is one of the oldest forms of flexible labor engagement and, as such, is an exception to the regime of indefinite employment, which means it should be understood and applied in that spirit.
On the other hand, it should be noted that Article 185, paragraph 1 of the Labor Law stipulates that an employment contract is terminated by a decision in written form, which must include legal remedy instructions and an explanation. Therefore, it is not impossible that in the future, court practice, and even the Supreme Court itself, may adopt a different stance (i.e., that it is necessary to explain the reasons for the termination of fixed-term employment).
Such a change in stance, even within a short period, would certainly not be unprecedented in the practice of the Supreme Court.