Under the Serbian Labour Law, an employment contract may include a probationary period clause, and it is a common practice for new hires in Serbia to begin their employment this way. But while probation is designed to give both employers and employees a chance to assess fit, it often raises more legal questions than answers when things don’t work out.
As the saying goes, “hire slow, fire fast”, but in practice, even probationary terminations must follow clear legal rules to avoid costly disputes. In this post, we break down what employers need to know when terminating employment during the probationary period in Serbia – lawfully, efficiently, and with minimal risk.
What is a probationary period?
A probationary period allows employers to assess an employee’s professional and practical skills necessary for the specific role they were hired for. This evaluation can include their expertise, proficiency, skillset, competence, agility, and other qualities that can only be confirmed through hands-on work performance.
Employment with a probationary period is established conditionally – meaning the employment relationship continues only if the employee demonstrates the required abilities during this time. Therefore, probation is not a condition for entering into employment but for its continuation. Employment is established under a resolutory condition related to the employee’s work results and their professional suitability for the contracted role. In practice, this means that employment continues only if the employee proves capable during probation.
Benefits of a Probation Period for Employers
Including a probation period in an employment contract offers several strategic and legal benefits for employers.
First and foremost, it provides a defined trial phase during which the employer can evaluate the employee’s performance, conduct, and cultural fit within the company. This helps ensure that the individual is capable of meeting the expectations and demands of the role before fully committing to long-term employment.
From a legal standpoint, the probation period allows for simplified termination procedures – with shorter notice periods (minimum 5 working days) and less stringent justifications, as long as they are grounded in objective assessments of performance.
Additionally, the probation period can promote a performance-driven environment, encouraging employees to demonstrate their capabilities early on. It also reduces the risk of long-term HR and legal issues stemming from early mismatches, making it a useful risk management tool in the recruitment process.
Does probation have to be tied to a specific role?
While it is common to set probation for a specific job position listed in the employer’s rulebook on systematization (if applicable), the law allows probation to cover one or more related or similar tasks defined in the employment contract. This provides flexibility for employers to assess the employee’s qualifications across different tasks and identify the best role fit for long-term employment within the company.
What is the maximum duration of probation?
The Labour Law prescribes that probation may last up to six months. This period is considered sufficient for employers to evaluate whether an employee possesses the necessary skills and competencies to continue employment.
Employee rights during probation
Employees on probation have the same rights, duties, and responsibilities as all other employees under the employment relationship.
Employment Contracts and Probationary Periods
An employment contract can be concluded for either an indefinite period or a fixed term.
When concluding a fixed-term employment contract, it is important to ensure that it complies with all legal requirements and does not exceed the maximum allowed duration of 24 months, except in specific cases where a longer term is legally permitted.
It is essential to note that a probationary period can be agreed upon both in an indefinite-term employment contract and in a fixed-term employment contract.
Probationary Period and Annexes to the Employment Contract
In practice, the question often arises – is it permissible to stipulate a probationary period through an annex to the employment contract? An even more legally contentious issue is whether an already agreed probationary period can be extended by such an annex.
For example, the employer and employee may agree on a probationary period that is not of the maximum duration (e.g., three months), but during that time, the employer may not have had the opportunity to fully assess the employee’s capabilities. In such a case, the employer may wish to extend the probation by an additional two or three months through an annex.
It is debatable whether such an arrangement would be legally permissible in practice, as well as what mechanisms the employee might have at their disposal to protect themselves from potential abuse.
On the other hand, if an employer wishes to give the employee a second chance – where the employee did not meet expectations during the probationary period for a specific position – a frequently raised question is whether a new probationary period can be stipulated for a different position with the same employer.
Each specific situation requires legal analysis and careful legal advice to ensure that the employer acts in compliance with the law and court practice, and is protected from potential employee lawsuits.
Evaluation and Assessment of the Probationary Period
The Labour Law does not specify who should conduct the evaluation and assessment of an employee during the probationary period, or how this process should be carried out. This is because the law provides only general guidelines, while it is not feasible to account for the specific work processes of every employer and every job position.
In practice, detailed procedures for evaluating and assessing probation are usually regulated through the employer’s work regulations, internal policies, or other internal acts.
From the perspective of case law, it is advisable for employers to establish a multi-member evaluation committee, or at minimum to appoint a person responsible for monitoring the employee’s performance during probation. The evaluation should be conducted by competent individuals who have directly supervised the employee’s work, observed their performance, and provided a formal assessment of their work quality.
If a positive evaluation of the employee’s work is not given, the resolutory condition is deemed fulfilled, and the employment relationship ends on the day the probationary period expires, as defined in the employment contract.
The committee or appointed evaluator has the obligation and responsibility to monitor the employee’s performance throughout the probationary period and, within the timeframe specified in internal policies, submit a report and provide their final assessment.
Based on this report and assessment, the employer makes a final decision on whether the employee will continue their employment or whether the employment contract will be terminated.
Having multiple documented records of the employee’s performance during probation is highly beneficial, particularly in the event of potential disputes.
Providing a single answer to the question of how probationary assessment should be conducted is challenging, as it depends on:
- The specific industry in which the employer operates;
- The exact nature of the employee’s role;
- The employee’s qualifications, competencies, and job tasks.
For some positions, it is easier to measure performance against clearly defined results (e.g. sales roles with targets), whereas for other roles, performance assessment is less quantifiable.
Therefore, it is important to objectively review all aspects of the employee’s performance during the probationary period before making the decision to either continue or terminate the employment relationship.
Termination and Probationary Periods: Two Key Categories
When discussing termination in the context of a probationary period, there are two distinct categories:
1. Termination Before the End of the Probationary Period
This occurs when the employment contract is terminated while the probationary period is still ongoing, before its originally agreed end date.
2. Termination at the End of the Probationary Period
This occurs when the probationary period has been completed, and based on the employee’s performance during this period, the employer decides whether or not to continue the employment relationship.
Termination Before the End of the Probationary Period
If it becomes clear during the probationary period that the employee and employer are not a good fit, either party may terminate the employment relationship, provided that they observe a notice period of at least five working days.
This five-working-day notice is the shortest notice period prescribed by the Labour Law, reflecting the understanding that, due to the short duration of employment so far, a strong relationship of mutual trust has not yet been established.
However, even in this case, if the employer initiates termination, the decision must be properly justified.
This means that termination cannot be unilateral and without explanation. The termination decision must include all legally required elements and be supported by evidence and arguments explaining why the employer has determined that the employee has not met the requirements of the probationary period.
Case law has clearly established that a termination decision made during the probationary period is unlawful if it does not include a justification with clearly stated reasons for termination.
In legal proceedings, the court does not assess whether the employee actually achieved satisfactory work results during probation, but rather examines the legality of the employer’s decision and whether the conditions for termination on this basis were properly fulfilled.
If the employee decides to resign during the probationary period, it is sufficient to submit a written resignation to the employer at least five working days before the intended last working day.
Since the essence of probation is to determine whether the employee has met the conditions for continued employment by the end of the probationary period, case law confirms that evaluation does not need to cover the entire probation period. This means that the employer has the right, in accordance with internal procedures for probation assessment, to evaluate and make a decision before the probationary period expires.
Termination at the End of the Probationary Period
At the end of the probationary period, the employer must provide a final evaluation regarding whether the employment relationship with the employee will continue.
If the employer is satisfied with the employee’s performance, and an indefinite-term employment contract was concluded, no additional action is required – the employee simply continues in their employment as normal.
However, if the employer is not satisfied with the employee’s performance during the probationary period, it is necessary to issue a formal termination decision (a decision to terminate the employment contract upon completion of the probation period).
This termination decision must:
- Be properly justified – employment does not end automatically at the end of probation; a formal written decision stating the reasons for termination is required.
Clearly explain how the employer determined that the employee did not meet the required standards. Without such justification, the termination may be deemed unlawful, and the employee could potentially sue the employer for unlawful termination.
Is Termination During Probation a Separate Ground for Termination?
Within the Serbian case law, there are differing interpretations regarding whether termination during probation constitutes an independent (separate) ground for termination.
Two opposing interpretations exist:
- Termination during probation as an independent ground for termination (dominant interpretation):
According to this view, termination based on an unsuccessful probationary period is a distinct and independent termination reason. It is sufficient for the employer to justify that the employee did not meet expectations and failed the probation period for the employment to lawfully end.
- Termination during probation is not an independent termination ground:
Some Supreme Court decisions state that termination during probation is not a separate legal basis for termination. Instead, the employer must categorise it under one of the grounds listed the Labour Law – typically, failure to achieve work results or lack of necessary knowledge and skills for the job.
Both interpretations have their own legal rationale and practical implications, each with advantages and drawbacks.
Reasons supporting the dominant interpretation (probation termination as an independent ground):
1. Legislative wording and purpose (linguistic and teleological interpretation) indicate that unsuccessful probation is a separate termination ground.
2. The Labour Law does not require employers to issue a notice of failure to achieve work results when terminating due to unsuccessful probation, unlike termination based on underperformance.
3. The Law does not impose an obligation on employers to provide employees with a deadline for performance improvement during probation, unlike in cases of termination for underperformance.
4. The notice period differs:
- For probation termination: minimum of 5 working days
- For underperformance termination: between 8 and 30 days
Additionally, not treating termination during probation as a separate termination ground would place an unjustifiably heavy burden on employers, requiring them to navigate both:
- The material and procedural legal grounds for the two termination reasons (probation and underperformance),
- The fact that a different procedure for terminating employment contracts is prescribed, and especially the differing notice periods, leaving it unclear which notice period the employer should apply.
Due to this legal uncertainty, employers must proceed with caution when terminating an employment relationship during probation.
Probation Period: A safety net, not a legal free pass
While the probation period offers clear advantages – from streamlined hiring decisions to easier exits when things don’t work out – employers must remember that its flexibility does not equal immunity from legal scrutiny. Even during probation, termination must be grounded in objective reasoning and handled in line with the Labour Law’s procedural requirements.
With conflicting case law interpretations and growing employee awareness of their rights, what seems like a simple exit can quickly escalate into a legal challenge.
The takeaway? Use the probation period strategically, but terminate carefully – and document everything. In employment law, it’s not just what you do that matters, but how (and when) you do it.
