Compensation for Damages Due to Workplace Injury – Practical Advice for Employers

Although considerable attention is paid to occupational health and safety in the Republic of Serbia, and the new Law on Occupational Safety and Health has been in effect since May 2023, the grim statistics on workplace fatalities continue year after year. The statistics are no less troubling when it comes to the number of workplace injuries.

The Labor Law provides that employees have the right to safety and protection of life and health at work, in accordance with the law, while the Law on Occupational Safety and Health regulates in more detail the rights and obligations of employees and employers regarding its provision.

Compensation for damages due to workplace injury often raises numerous questions, what this specifically means and what obligations you have as an employer, find out below.

What are the employer's obligations regarding compensation for damages due to workplace injury?

Under the Law on Occupational Safety and Health, the employer is obliged to provide the employee with work at a workplace and in a working environment where occupational safety and health measures have been implemented.

The employer is also obliged to ensure preventive measures to protect the life and health of employees.

But what does this specifically mean? What acts is the employer required to adopt and possess in order to comply with its legal obligations? The employer must:

• have a written risk assessment act for all workplaces in the working environment, and determine the manner and measures for eliminating them;
• through a general act, i.e. a collective agreement, establish the rights, obligations, and responsibilities in the field of occupational safety and health. An employer with up to 10 employees may regulate this through the employment contract instead, meaning they do not need to adopt a separate general act;
• designate, through a written act, a person responsible for occupational safety and health;
• inform employees about the introduction of new technologies and work equipment, as well as the risks of injury and health damage arising from their introduction, and issue appropriate instructions for safe work in such cases;
• engage a licensed legal entity to carry out preventive and periodic inspections and checks of work equipment, as well as preventive testing of working environment conditions.

If you designate another person or transfer obligations and responsibilities to another person regarding the implementation of occupational safety and health measures, you as the employer are not released from liability related to the implementation of those measures.

When is the employer not liable for compensation for damages due to workplace injury?

On the other hand, the employer is not liable:

• if it is proven that the workplace injury occurred due to unusual and unforeseeable circumstances beyond its control;
• if the workplace injury occurred due to extraordinary events whose consequences could not have been avoided despite all efforts.

As an example, we could cite the effect of certain natural forces, which can in no way be under the employer's control, such as an earthquake.

On the other hand, the employer is liable for damage suffered by an employee from a hazardous object owned by the employer, or from a hazardous activity carried out by the employer. For example, a load-hauling machine that serves as a work tool for the employee would be considered a hazardous object, and the employer would be liable for damage suffered by the employee from such a machine.

However, even in such a case, the employer, as the owner of the hazardous object, would be released from liability if it proved that the damage occurred exclusively as a result of the employee's own actions, which the employer could not have foreseen and whose consequences it could not have avoided. The employer is released from liability if the employee violates the employer's work procedures, i.e. fails to comply with workplace rules.

An extreme example of this would be a fight breaking out at the workplace, between employees or between an employee and a third party. Although in this case the employee would have suffered an injury at the workplace, during working hours, the employer bears no liability for any injury the employee might sustain on that occasion. In such a case, the injury would clearly have been caused by the employee themselves, as a result of failing to comply with workplace rules and procedures.

What are the employer's obligations when an employee sustains a workplace injury?

When an unfortunate event occurs and your employee informs you that they have sustained a workplace injury, here is your first obligation.

Reporting to the labor inspectorate

You are obliged to report the workplace injury to the competent labor inspectorate immediately, and no later than within 24 hours of the injury occurring.

If the workplace injury occurs, for example, in a traffic accident on the way to work, you are also obliged to report it within the same deadline to the competent internal affairs authority.

Workplace injury report

You are obliged to complete the workplace injury report (injury form) immediately, and no later than within 24 hours of learning of the injury, and to submit the report without delay, and no later than within 24 hours of entering the data, to the healthcare institution where the injured party was examined. The report is completed and submitted to the healthcare institution in 5 copies.

The physician (healthcare institution) then enters findings and an opinion on the injury into the report, within 2 days of receiving the report, and returns it to the employer without delay, and no later than the following day.

Upon receiving the report from the healthcare institution, you submit it to the competent branch of the Republic Health Insurance Fund, within 2 days of receipt. When the branch of the Republic Health Insurance Fund returns the certified copies of the workplace injury report, you keep one certified copy for your own records, deliver one copy to the employee immediately, and no later than within 2 days of receipt, one copy is submitted to the Republic Fund for Pension and Disability Insurance, and one copy to the Administration for Occupational Safety and Health. A bylaw^[1] prescribes the content and manner of issuing the workplace injury report form, and the forms themselves are an integral part of it.

Obligation to pay salary compensation

You are obliged to compensate the employee's salary for the time they are absent from work due to temporary incapacity for work resulting from a workplace injury or occupational illness. The amount of salary compensation is 100% of the employee's average salary over the previous 12 months, before the month in which the temporary incapacity for work began, for the duration of the insured party's employment, from the first day of temporary incapacity for work, for the entire duration of the temporary incapacity for work.

It should be noted here that the employee also enjoys the right to mandatory health insurance.

Obligation to compensate damages due to workplace injury

The Labor Law provides for the employer's obligation to compensate the employee for damages due to a workplace injury or occupational illness.

However, this issue will be regulated in each specific case, bearing in mind that the employer's obligation to compensate the employee for damages due to a workplace injury is established only in the event of the employer's liability.

For your liability to compensate the employee for damages to exist, there must be a causal relationship between your action and the damage sustained by the employee.

Employer's misdemeanor liability

If you fail to adopt a written risk assessment act for all workplaces, fail to establish the rights, obligations, and responsibilities in the field of occupational safety and health through a general act, collective agreement, or employment contract, or fail to designate a person responsible for occupational safety and health through a written act, you risk having the competent authority initiate misdemeanor proceedings against you.

You also risk misdemeanor liability if you fail to comply with the obligation to report a workplace injury to the competent inspectorate, and if you fail to submit the prescribed workplace injury report form to the competent institutions and to the injured employee themselves.

As for the penalties for these offenses, a fine ranging from RSD 800,000 to RSD 1,000,000 is prescribed for an employer that is a legal entity.

What is the new obligation for all employers as of May 2025?

As of May 2025, all employers, regardless of the field in which they operate, will be obliged to insure all their employees against workplace injury and occupational illness, in order to ensure compensation for damages. The entire financial burden of this insurance will fall on the employer.

The consequence that may arise for employers who fail to insure their employees against workplace injury and occupational illness is misdemeanor liability and a fine ranging from as much as RSD 1,000,000 to RSD 1,500,000 for an employer that is a legal entity.

Compensation for damages due to workplace injury – answers to the most common questions

Does an injury sustained during team building constitute a workplace injury?

Recently, a particularly popular form of employee recreation has been organizing various team building activities.

Whether you have chosen to organize bowling at a local club, socializing and competing in an Escape Room, a cruise, skiing, or some other outdoor activity for your employees, here is the "background knowledge" you should have.

The assumption is that you, as the employer, are the organizer of such activities and that they take place outside the company's premises.

In this regard, it is important that the law considers a workplace injury to include an injury sustained by an employee at a work camp or competition (production, sports, etc.).^[2] Furthermore, the law provides that persons participating in work-related competitions have the right to occupational safety and health, and that the organizer of the competition ensures occupational safety and health for these persons.^[3]

Given this, and bearing in mind that you are the organizer of the team building event, if an employee were to be injured during these activities, the prevailing theoretical position is that this should be reported, a workplace injury report completed, and the previously described reporting procedure carried out with the competent authorities.^[4]

Depending on the position taken by the competent branch of the Republic Health Insurance Fund, whether or not it considers the specific injury to be a workplace injury, your further actions as an employer would depend on that.

If the competent branch does not consider it to be a workplace injury, it returns five uncertified copies of the injury report to the employer, and the employee could exercise their rights by filing a lawsuit against the employer.

Interestingly, courts have gone even further, as in one court decision liability was established for an employer for an injury that occurred during an activity the employer had not organized. Specifically, the court established the liability of a school, as the employer, for an injury sustained during a basketball game that the teachers themselves had organized for School Day, where the employer had only tacit knowledge of the game.

An employee is injured while working from home. Are your obligations the same?

Although working from home is mostly feasible only when it comes to providing intellectual services, it is logical that the likelihood of workplace injury is significantly lower there than, for example, compared to construction work.

However, as the trend of working from home has been expanding due to the development of modern technologies enabling remote work, particularly in light of the fight against the coronavirus, which until a few months ago "imposed" this way of working on many employers, this issue arises much more frequently in practice.

Under current legislation, a workplace injury is one sustained by an insured party in spatial, temporal, and causal connection with performing the work on the basis of which they are insured, as well as an injury sustained by an employee while performing work they were not assigned to but which they perform in the employer's interest.

When working from home, the employee performs the same job they would perform at the employer's premises, in other words, they perform work in the employer's interest, for the purpose of fulfilling the tasks of their position.

The court's interpretation in a 2013 court ruling is that the term "at work" necessarily implies, at a minimum, the existence of a workplace and working hours, or, under certain conditions, at least one of these elements. The court further concludes that the employer cannot defend itself by claiming there was no obligation to report the event because the injury occurred outside the workplace, since it nevertheless occurred during working hours, i.e. in temporal connection with the work performed. What mattered most to the court was in fact that the employee's action was carried out for the purpose of performing the duties of her position.^[5]

This means that if your employee were injured while working from home within their prescribed working hours and while performing the duties of their position, we advise you to report such an injury to the competent authorities and submit the prescribed workplace injury report form.

On the other hand, if the employee, after their working hours, despite working from home, were to slip in the bathroom or get injured at the gym, no causal connection to the duties of their position could be established.

By reporting such an injury and submitting the workplace injury report, you are fulfilling your legal obligation. The question of any compensation for damages the employee might claim from you is a completely separate matter, since, as we have noted, your liability for compensation can only be established if your liability for the employee's injury is also established. In other words, by submitting the workplace injury report, you are not "admitting" liability, which is a common dilemma for employers, and one that sometimes leads them not to act in accordance with their legal obligations in certain situations. Your liability can only be established through the appropriate procedure prescribed by law.

Is there an obligation to insure employees against workplace injury?

The Law on Occupational Safety and Health has long provided for the employer's obligation to insure employees against workplace injuries, occupational illnesses, and work-related illnesses, in order to ensure compensation for damages. However, since it is provided that the conditions and procedures for insurance against workplace injury are to be regulated by a separate law, which has still not been adopted, this employer obligation does not exist in practice.

The Ministry of Labor, Employment, Veteran and Social Affairs issued Opinion No. 011-00-00016/2015-01 dated April 3, 2015, clarifying that insuring employees against workplace injuries, based on the Law on Occupational Safety and Health, still exists only as an option, not an obligation for the employer, and that the conditions and procedures for insurance will only be regulated once a separate law is adopted.

In a 2016 opinion, No. 011-00-00040/2016-01, the competent Ministry took the position that, until a separate law regulating the conditions and procedure for insurance is adopted, there is not even a possibility for employers to fulfill the obligation prescribed by the Law on Occupational Safety and Health.

The announced Law on Insurance Against Workplace Injury for the Purpose of Compensation for Damages was supposed to be adopted in 2020, but this has not happened to this day.

The competent Ministry has announced that, under the new law, employers will be obliged to insure all employees, regardless of their line of business, and that insurance for workers engaged in hazardous jobs will cost more. On the other hand, it is expected that, under the new law, there will be an obligation for all of an employer's employees to be insured, which will enable them to obtain faster compensation for damages due to workplace injury, compared to the current situation, where court proceedings can take years.

Frequently asked questions about compensation for damages due to workplace injury

Within what deadline must the employer report a workplace injury to the labor inspectorate?

The employer is obliged to report a workplace injury to the competent labor inspectorate immediately, and no later than within 24 hours of the injury occurring. If the injury occurred in a traffic accident on the way to work, the competent internal affairs authority must also be notified within the same deadline.

Is the employer always liable for an employee's workplace injury?

No. The employer is not liable if it is proven that the injury occurred due to unusual and unforeseeable circumstances beyond its control (for example, an earthquake), or due to extraordinary events whose consequences could not have been avoided despite all efforts. Liability is also excluded when the damage is the exclusive result of the employee's own actions, for example when the employee fails to comply with work procedures.

What is the amount of salary compensation during sick leave due to a workplace injury?

The employee is entitled to salary compensation in the amount of 100% of the average salary earned over the previous 12 months before the month in which the temporary incapacity for work began. This compensation is paid from the first day of incapacity for work, for the entire duration of that incapacity.

What is the penalty for an employer that fails to meet its occupational safety and health obligations?

For failing to comply with basic obligations, such as not adopting a risk assessment act or not reporting a workplace injury, a fine of RSD 800,000 to RSD 1,000,000 is prescribed for an employer that is a legal entity. As of May 2025, for failing to comply with the new obligation to insure employees, the fine ranges from RSD 1,000,000 to RSD 1,500,000.

Must the employer insure employees against workplace injury?

The Law on Occupational Safety and Health has long provided for this obligation, but it remains unenforceable in practice because the separate law that would regulate the insurance conditions and procedure has still not been adopted. As of May 2025, a new, concrete obligation is being introduced requiring all employers to insure employees against workplace injury and occupational illness, at their own expense.

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