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Annex of an employment contract

The relationship between the employer and the employee is regulated by the employment contract, which must be concluded in accordance with the law. Of course, the circumstances in which a specific contract was concluded can change in the period from the establishment of the employment relationship until its termination, so it is necessary to adjust the contract to that changes. For these purposes, employer and employee can conclude an annex to the employment contract.

Therefore, the purpose of the annex is to legally regulate certain changes that occur in the relationship between the employer and the employee, i.e. changes in working conditions. In the following text, we are going to explain when the annex to the employment contract can be concluded, what the conditions of its validity are and what rights are available to the employee in case that the annex to the employment contract is illegal.

When the annex of the employment contract can be concluded?

The Labor Law (LL) prescribes that the employer may offer the employee a change in the agreed working conditions, i.e. an annex to the contract in the following situations:

  1. for the purpose of transfer to another suitable job, due to the needs of the process and organization of work
  2. for the purpose of transfer to another place of work for the same employer
  3. for the purpose of referral to a suitable job, but for different employer
  4. if, in case of surplus of employees, the employer has included employment measures in the redundancy program, such as transfer of employees to other jobs, referral to work with another employer, retraining or additional training, part-time work, but not less than half of full working time, and other measures
  5. for the purpose of change of the elements which are used for determination of the basic salary, work performance, salary compensation, increase of the salary and other employee benefits contained in the employment contract
  6. in other cases determined by law, general act and employment contract
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When is an annex of an employment contract legal?

The law specifies situations in which the employer may offer the employee a change of working conditions they previously agreed on. However, these changes and the annex itself are legal only if the employee is adequately informed about all the relevant information.

In that sense, LL explicitly prescribes that the employer is obliged to submit a written notice to the employee with which must contain the following elements:

  • Specific reasons for the change of the agreed working conditions. We emphasize that it is not enough to state only the legal basis for concluding the annex to the contract, but it is necessary to state the specific reason why certain changes are needed (for example, the employee suffered an injury outside the workplace so he can no longer perform work in accordance with the employment contract).

 

  • The deadline within which the employee should inform the employer whether he accepts the offered annex. The stated deadline cannot be shorter than 8 working days and runs from the day of delivery of the annex and written notice to the employee. At the same time, courts take the position that the employer can send the employee an offer for conclusion of an annex to the employment contract while the employee is on temporary leave, such as annual leave, sick leave etc.
  • legal consequences that may occur for the employee if he does not sign the annex to the contract

The notification of the employer about the reasons for the offer of the annex to the employment contract must be clear and well explained, so that the employee do not have any doubts and, in accordance with that, he can decide whether to agree to change of the previously agreed working conditions.

At the same time, it is important to emphasize that changes in the previously agreed working conditions must be made in form of an annex to the employment contract. Therefore, crossing out certain provisions in the concluded employment contract or adding new working conditions will not produce legal effect, even when the employee agrees to such changes.

Consequences of not signing the annex to the contract

The law stipulates that an employer may fire the employee if there is a justified reason for that which is related to the needs of the employer. One of the justified reasons in this sense is the non-acceptance of the conclusion of the annex to the employment contract by the employee. In this situation, the employer has the right to fire the employee if the employee refuses to sign proposed annex.

However, the fact that the employee refused to conclude an annex to the employment contract is not enough for the termination of the employment contract by the employer. In that sense, the employee is allowed to refuse to sign an annex to the employment contract if there are justified reasons for that. For example, if the employer offers the employee to perform jobs that, having in mind his health condition, the employee is not allowed to perform, so those jobs are inappropriate for him. Therefore, if the employee refused to sign the annex to the employment contract due to justified reasons, the employer has no right to fire him.

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The employee’s right to deny the legality of an annex to an employment contract

If the employee is not informed about the specific reasons for changing the working conditions, the deadline within which he can respond to the employer’s offer as well as the legal consequences that may occur if he does not sign the annex to the employment contract, the employee has right to file a lawsuit in the basic court in the area where the employer has its registered office (head office) or in the court in whose area the work is or has been performed, if he thinks that the proposed annex is not in the accordance with the law.

It is important to emphasize that the employee has the right to challenge the legality of the annex to the employment contract in court proceedings, even when he has signed the annex. Of course, this right also belongs to the employee who refused to sign the offered annex within the set deadline.

If the employer terminated the employment contract because the employee refused to sign an annex to that contract, and in a later court proceeding the court finds that the annex to the employment contract is illegal, one question arises: Is the employer obliged to return the employee to his old job? The law does not provide an answer to this question, and different courts and judges take different positions. For some, employer is obligated to return the employee to the old job because that is logical form of reintegration, and the court may oblige the employer to act in that way. On the other hand, some judges believe that the court cannot decide on the return of the employee to the job, because the said decision is entirely up to the employer.

Transfer of an employee to another suitable job, due to the needs of the process and organization of work

If that is required by the needs of the process and organization of work, the employer may offer the employee the conclusion of an annex to the employment contract. At the same time, the employer can offer to the employee a transfer to the suitable new position/job only.

The reasons for which employer proposes a change in the agreed working conditions to the employee must be clearly presented to the employee. In that sense, it is necessary for the employer to clearly state the reasons for proposing the annex of the employment contract, as well as to explain them in detail, so that the employee is fully aware of the situation.

The employer himself determines when it is necessary to transfer an employee from one job to another. In other words, the employer is the one who evaluates when the process and organization of work requires changes in that sense. However, the reasons for the transfer must be real, i.e. they need to really exist and to be objective.

If in a specific situation any employer would suggest a transfer to an employee to a certain position, regardless of the person in question, it is clear that the transfer is necessary for objective reasons, so that the employer is motivated by the needs of the process and organization of work, not by his own feelings and attitudes about the employee’s personality, which are irrelevant for concluding an employment contract in general. By requiring that the reasons for the transfer must be objective and reasoned, various abuses and discrimination of the employee by the employer are prevented.

A transfer may be justified if, for example, the employer has started to perform new jobs and the employee who has been offered the transfer has experience in performing the same. Also, if the employer has ceased to perform certain jobs, the person who performed those jobs may be offered a transfer to another suitable job.

As we have stated, employer is obligated to offer the employee a transfer to another suitable job. The law explicitly prescribes that an appropriate job in that sense is a job for which the same type and level of education which are determined by the employment contract is required.

Therefore, if the employee has worked in jobs for which secondary education is required, the employer cannot offer him a transfer to a job for which the main condition is to have a university degree and vice versa. The job is also not suitable if the employee is not qualified for it at all, for example if he was originally employed as an accountant, the employer cannot offer him a transfer to the position in a legal department.

We emphasize that an employee can be temporarily transferred to other appropriate jobs but without offer of an annex to the employment contract. This is possible only if a certain job cannot be performed without delay. Such transfer may last for a maximum of 45 working days in a period of 12 months.

When can an employee be transferred to job in another place?

The law stipulates that an employee can be transferred to perform work in another place only if:

  • The activity of the employer is of such a nature that the work is performed in places outside the head office of the employer, i.e. its organizational part
  • The distance from the place where the employee works to the place where he is transferred to work is less than 50 km. Also, employer is obligated to organize transport for employees, in order to enable them to get to job at the time, and to return from work, all with provided compensation of transport costs in the amount of the price of public transport ticket.

If these conditions are fulfilled, the employer can transfer the employee to another place of work. However, the transfer is also possible if the stated conditions are not fulfilled, but in that case it is required that the employee has agreed to such a transfer.

When can an employee be sent to work for another employer?

An employee can be sent to work for another employer only temporarily, in the following situations:

  1. the need for the employee’s work has temporarily ended
  2. leasing of business premises of the employer
  3. conclusion of a business cooperation agreement

Temporary in this case means that an employee on this basis can work for another employer only as long as reasons for referral exist, but not longer than one year.

However, if the reasons for the referral last longer than one year, then the employee can work for another employer for as long as these reasons last, but only if he has agreed to it.

An employee who is sent to work for another employer concludes a fixed-term employment contract with that employer, and after the expiration of the period for which he was sent, he has the right to return to work for the employer who sent him.

Employer’s liability for misdemeanor

An employer who has offered an employee the conclusion of an annex to an employment contract, but not in accordance with the rules explained in this text, is committing a misdemeanor. For example, if he did not submit an offer to the employee with a notification which concludes the reasons for changing the previously agreed working conditions, if he offers the employee a job that does not correspond to the type and level of his education etc.

The following fines are prescribed for the violation in this sense:

  • from 600.000 to 1.500.000 dinars if the employer is a legal entity + from 30.000 to 150.000 dinars for responsible person at employer legal entity, or representative of the employer legal entity
  • from 200.000 to 400.000 dinars if the employer is an entrepreneur

For all further questions regarding to annex of an employment contract, or any other questions relating to labor and employment law, feel free to contact our law firm.

Date: 01.07.2020.

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