Forums For Adjudicating Employment Disputes
Employment disputes are adjudicated before basic civil courts.
In accordance with the Labour Law, an employee who considers that his/her employment right has been violated, before initiating proceedings before a competent court, is obliged to file a motion for amicable settlement of the dispute before the Agency for Peaceful Settlement of Labour Disputes or before the Centre for Alternative Dispute Resolution. In this case, the employer is obliged to accept the procedure for the amicable settlement of the labour dispute. If the labour dispute is not resolved before the aforementioned authorities, the employee may bring the dispute before the competent court.
On the other hand, an employee whose employment has been terminated, has a right, but is not obliged to initiate proceedings before the said authorities for amicable settlement.
The Main Sources Of Employment Law
Under Montenegrin law there is a hierarchy of labour regulations which starts with the Constitution, ratified international treaties, the Labour Law, the General Collective Bargaining Agreement - for the territory of the Republic of Montenegro as a whole, Special Collective Bargaining Agreement for the respective business branch and Collective Bargaining Agreement applicable for the specific employer.
There are other laws regulating specific employment-related matters: Law on Protection of Montenegrin Citizens at Work Abroad, Law on Occupational Safety and Health, Law on Prohibition of Harassment at Work, Law on Volunteer Work.
National Law And Employees Working For Foreign Companies
The Labour Law applies to all employees – nationals and non-nationals – who work in the territory of the Republic of Montenegro for domestic or foreign legal entities or individuals as well as to employees in governmental structures and public services and employees seconded abroad, if the law does not prescribe otherwise.
National Law And Employees Of National Companies Working In Another Jurisdiction
Law on Protection of Montenegrin Citizens at Work Abroad applies to seconded employees during their work in another jurisdiction. Bilateral tax and social security treaties are also relevant, if such treaties exist between Montenegro and the state to which the employee was seconded.
According to this special law, a national company which seconds employees for temporary work in another jurisdiction is obliged to inform the state administration body in charge of labour affairs – the competent Ministry, no later than 15 days before the secondment, that the conditions for their secondment to temporary work abroad have been met.
Montenegrin Law on Personal Data Protection has been harmonized with EU Directive 95/46, but the law still has not been aligned with the GDPR and its requirements. General data protection regime applies, including obligation of data controllers to always process personal data based on adequate legal ground, for determined and necessary purpose and to provide exercise of the granted rights to data subjects (including right to access collected data, to request modification or deletion of data, etc.). All data controllers in Montenegro are required to perform two basic registrations before the local regulator (Agency for Personal Data Protection and Information of Public Importance): (i) to register themselves as data controllers (one-time obligation), and (ii) to register each personal database they intend to establish before they start processing activities (the same also applies to any subsequent changes).
Legal Requirements As To The Form Of Agreement
Before employees commence with work, an employment contract must be concluded in writing. Law also refers to the mandatory content of the employment contract, whereas the following elements are prescribed as mandatory: employer’s name and seat, employee’s name, address and ID number, work post and job description and required qualification for such position, place of work, type of employment (definite or indefinite term), if definite term – duration of employment and basis for such type of employment, date of commencement of work, working hours, the length of paid leave and annual leave to which the employee is entitled or, if this cannot be stated, the manner of determining paid leave and annual leave, the length of the notice period in the event of termination of the employment agreement, the terms of the collective agreements applicable to the employer, the amount of the coefficient, the amount of the basic salary, the basis for increasing the salary, the time of payment of the salary and other income of the employee, and rights, obligations and responsibilities of the employee and the employer related to protection and health at work.
A trial period can be agreed by the employment contract, and it can last for up to maximum of six months.
In case the employee failed to show satisfactory work performance at the end of the trial period, the employment is terminated at the end of trial period. During the trial period, either employee or employer can terminate employment in line with a collective bargaining agreement and employment contract, with minimum notice period of five days.
Hours Of Work
The Labour Law prescribes that 40 hours per week as the full-time working hours. A collective agreement can further stipulate that the full-time weekly working hours can be set at a lower number of working hours.
Reduced working hours shall be introduced for positions where, even with the application of safety and health measures at work, it is still not possible to protect employees from harmful work-related influences. Working hours are reduced to 36 hours per week, while the employee is entitled to the same rights as the full-time employee.
Overtime may only last as long as it is necessary to remedy the reasons for which overtime work was introduced, with an average working time not exceeding 48 hours per week and within a period of 4 months. In this case, the maximum duration of weekly working time may not exceed 50 hours.
Special Rules For Part-time Work
A part-time employment contract cannot be concluded for a period shorter than 10 hours per week. This limitation is not applicable for an employment contract with a director.
An employee can conclude several part-time employment contracts with several employers within a 40-hour working week and thus achieve full-time work.
The employee is entitled to an appropriate salary determined based on the Labour Law, applicable collective bargaining agreement and the employment contract. According to the Labour Law and General collective bargaining agreement, it is not possible to determine a fixed amount of the salary, as the Labour Law provides for rather complex mandatory structure of the salary and numerous mandatory payments which are regulated in details in the General collective bargaining agreement:
- Salary for the work performed and time spent at work, which is comprised out of following elements:
- — basic salary – determined as multiplication of the prescribed calculated value of the coefficient (EUR 90 for the year 2021) and coefficient for the respective group of jobs (according to the General collective bargaining agreement, basic coefficients are 1.03 up to 4.12, depending on qualification level of the employee),
- — special part of the salary – containing food allowance and 1/12 of allowance for annual vacation,
- — performance part of the salary – determined on the basis of quality and quantity of the work performed, employee’s commitment to work and relation of the employee towards work,
- — increased salary: (i) for work on non-working days of public and religious holidays (at least 150% of the basic salary); (ii) for night work (at least 40% of the basic salary); (iii) for overtime work (at least 40% of the basic salary); (iv) based on a time spent at work (for each started year of service from 0.5% to 1.00% per year of service).
- Compensation of expenses – for the time spent on a business trip in the country and abroad, for gas if using his/her own car for business purposes.
- Other renumerations – severance payment when retiring, jubilee rewards if provided by the collective bargaining agreement, solidarity aid in case of employee’s death or death of his/her close family member.
- Salary compensation – for annual leave, holidays, sick leave, paid leave and similar grounds.
The following Montenegrin holidays are statutory non-working days: New Year’s Days (1 and 2 January), International Workers’ Day (1 and 2 May), Independence Day (21 and 22 May) and Statehood Day (13 and 14 July). Employees also have the right to celebrate different religious holidays and are entitled to paid leave on those dates, depending on their religion.
The minimum duration of annual vacation is 20 days per calendar year. Employees working reduced working hours are entitled to at least 30 days of annual vacation. The minimum duration of annual vacation shall be further increased based on criteria determined by the employment contract and the applicable collective bargaining agreement.
Full-time employees are entitled to a paid daily break during the working hours in duration of minimum 30 minutes, if they work minimum 6 working hours per day. Daily break is calculated towards the working hours. An employee is entitled to a daily rest period of at least 12 hours without interruptions between two working days. Also, an employee is entitled to a weekly daily rest period of at least 24 hours of uninterrupted rest between two working weeks, in addition to the noted daily rest period of 12 hours.
Minimum age to enter employment is 15 years. However, a 15-year-old who is enrolled at obligatory primary education cannot enter into an employment agreement. Employment is terminated on a statutory basis after a person reaches both 67 years of age and at least 15 years of mandatory employment insurance.
An employee is entitled to sick leave every time there are appropriate medical reasons (sickness, work injury, voluntary blood donation, etc.).The employee can alsobe granted sick leave if he/she has to care for a sick member of their immediate family. During sick leave, the employee is entitled to compensation of the salary.
Employers are obliged to employ at least one person with a disability if they employ 20 to 50 persons, and at least 5% of total number of employees if they employ more than 50 persons. Employees with severe disabilities of 80% and above counts as two employees with disabilities below 80%. This obligation does not apply to newly established employers during the first 24 months from commencing with the business.
Employers who do not employ persons with disabilities in this manner, are obliged to pay 20% of the average monthly salary in Montenegro in the previous year, each month, per each employee with a disability they lack in order to be in line with the stated quotas. Exceptionally, employers who employ more than 10 and less than 20 employees and do not have at least one employee with a disability, are obliged to pay 5% of the average monthly salary in Montenegro in the previous year, each month.
Location Of Work/Mobility
Location of work must be stated in the employment contract. Any changes to that must be conducted in line with special rules and throughout the annex to the employment contract.
The law permits to establish employment for performance of work outside the employer’s premises, when it is allowed by the nature of business. Such employment contracts contain some other mandatory elements (manner of supervision of work, use of means of work, compensation of expenses related to such work, etc.).
The social security system in Montenegro is based on the mandatory public pension (and health and unemployment) insurance. Funds for pension and disability insurance are provided in the budget of Montenegro.
Participation in any kind of voluntary pension funds is entirely up to each employee and does not create any obligation for the employer.
Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)
An employee is entitled to paid maternity leave in duration of 365 days as of the date of childbirth. The first 70 days of leave may be used by both parents, in case of birth of two or more children.
A pregnant employee is entitled to one paid day off from work during the month to perform prenatal examinations.
In case the woman returns to work prior to the expiry of maternity leave, she will be entitled to use 60 minutes daily break during work, in order to nurse her child.
During the period of maternity leave the employee is entitled to salary remuneration in line with separate law, fully covered by the state funds.
In general, use of maternity leave, parental, adoptive and foster leave and leave for childcare and special childcare cannot be considered as a justified reasoning for terminating employment. Pregnant women and employees using one of the said leaves are protected from dismissal, except in the case of severe breach of work duties that are unrelated to their absence and almost all cases related to termination of employment. This also includes protection from being declared redundant.
Apart from the written form and compulsory terms as explained under “Legal Requirements as to the Form of the Agreement” and “Minimum/Maximum age”, the law demands that an employee passes a prior medical examination confirming general fitness for work. Further, for persons under 18 years old, the law requires written consent of the parent, adoptive parent, guardian or custodian, and that such work does not endanger his/her health, development, morals and education, or that it is not prohibited by law.
Besides the mandatory terms, Employers may establish special terms for the specific positions in their internal act on systematization and organization of positions. Employers can also agree with the employee on some other more favorable terms of the employment in each case.
Types Of Agreement
As a rule, employment contracts are concluded for an indefinite term if the agreement does not state otherwise. Definite term employment can be established exceptionally, for a duration of up to 36 months, by one or several consecutive contracts (and longer in some cases such as replacement of a temporary absent employee, work on a specific project until its completion, engagement of a director and seasonable jobs).
Law on Protection of Unpublished Data regulates safety of unpublished data which represent business secrets, as a separate IP right. Unpublished data is protected if it represents business secrets (i.e. it is not publicly known and available), and for that reason has a commercial value. It is also required that the owner of such data has taken precaution to keep it confidential.
A confidentiality clause usually represents part of the employment contract in business activities where it is applicable.
Ownership of Inventions/Other Intellectual Property (IP) Rights
If an employee creates IP rights during performance of his/her duties under the employment contract, the employer owns the exclusive pecuniary rights for the exploitation of the work within the scope of the employer's registered business activity for a period of five years as of completion of the work, if not otherwise stipulated by the agreement between an employee and employer.
If the IP rights relate to a computer software, the permanent holder of all exclusive pecuniary rights over software is the employer, unless the employment contract provides otherwise.
When employing an individual in Montenegro, an employer is required to notify the Employment Agency of Montenegro on the job vacancy (not applicable in the case of a new employment contract with the same employee upon expiry of the previous contract, transferring to another job with the same employer, or in case of taking over the employee under an agreement between two employers or due to the corporate restructuring).
Besides conclusion of the employment contract in writing, an employer is obliged to notify the employee in writing on rights, obligations and responsibilities related to protection from harassment at work (before commencing with work).
An employer also has to register an employee for mandatory social security insurance within eight days from commencing with work and notify the Employment Agency about hiring within five working days from commencing with work.
Law on Employment and Work of Foreigners prescribes that a non-national may be employed, i.e. work in Montenegro, provided that such a person has a work permit, a permanent residence permit, or a temporary residence permit, and a concluded employment contract or a contract for providing services. The work permit is issued by the Employment Agency of Montenegro.
There are several types of work permits: personal work permit, employment license (and seasonal employment license as a subtype), work permit for cross-border services of foreigners, and work permit for inter-company mobility, each corresponding to specific circumstances of engagement of an employee.
Hiring Specified Categories Of Individuals
The law also introduced specific rules and provides special protection to persons with disabilities, women during pregnancy and after childbirth, which include restrictions regarding overtime and night work and a higher threshold for other rights regarding their terms of employment. Specific medical examinations are required when hiring employees between the age of 15 to 18.
Outsourcing And/Or Sub-Contracting/Temporary Agency Work
The Labour law only regulates the temporary assignment of employees to another employer by the specialized staff leasing agency registered with the competent ministry. The staff leasing agency remains a formal employer of the assigned employees, and the assignment is performed via agreement between the agency and the company to which the employee is assigned (staff leasing user).
Assigned employees are entitled to the same salary level as that which is granted to the employees of the staff leasing user. Also, other rights and obligations of an employee assigned to the employer cannot be less favorable than the rights and obligations of other employees with the employer.