Wrongful termination of the employment agreement means termination of business cooperation between the employer and the employee, whereby:
- no legal procedure has been followed.
The data on the number of active employment disputes also show the importance of conducting the termination procedure correctly. In 2019 alone, the total number of cases of employment disputes before the First Basic Court in Belgrade was 9,727 . In 2020, there were 4,114  active cases before the Basic Court in Novi Sad.
High numbers attest to the complexity of the termination procedure. The smallest mistake with the procedure may lead to the cancellation of the employment termination and the obligation to compensate for damages due to the wrongful termination.
If you plan to terminate the employment agreement with some of your employees, think carefully of the necessary procedure.
The consequences of a wrongful termination according to the Labor Law of the Republic of Serbia can include:
- Reinstating the employee to work, if the employee asks so;
- Damages for up to 18 or 36 monthly salaries (both limits are explained later, in more detail);
- Payment of taxes and contributions for compulsory social insurance;
- Damages for unused vacation time;
- Interest and court proceeding costs;
- Reputational risk for the company.
An employee may seek both the determination of the wrongfulness of the termination and damages in a single process. However, the employee can initiate several lawsuits against the employer due to wrongful termination. In the initial proceedings, the employee may request that the court only establish the unlawfulness of the termination. When the court finds that the termination of the employment relationship was illegal, the employee can claim damages in another process.
This situation can put the employer into an incredibly unenviable position. In addition to the damages the employer may have to pay, more proceedings may incur additional court and attorney costs.
Upon determining the unlawfulness of the termination of employment, the employee will be obliged to reinstate the employee to work only if the employee has made such a request.