The Law on Agency Employment (“LAE”) was adopted in December 2019 and its full application will commence on 1 March 2020.
The beneficiary employers who used to settle their need for labour through staff leasing will have to adjust their operation to new legislative framework. Among other, instead of the usual agreements on business cooperation, the beneficiary employers will have to conclude a prescribed staff leasing agreement with the service provider – agency for temporary employment.
In order to perform the activities of staff leasing in terms of LAE, the agencies will have to meet the requirements stipulated in the law and additionally elaborated in the Rulebook on requirements for issuing working licence to the agencies for temporary employment and passing the professional exam for operation of such agency (“Rulebook”), which has been in force since 8 January 2020.
Agencies for temporary employment – news or old news?
The legislation of the Republic of Serbia has recognised the employment agencies since 2003, when the previously valid Law on Employment and Insurance in Case of Unemployment was adopted (Official Gazette of RS no. 71/2003 and 84/2004 – other law), and they were also regulated by the current Law on Employment and Insurance in Case of Unemployment (Official Gazette of RS no. 36/2009, 88/2010, 38/2015, 113/2017 and 113/2017 – other law, “LEICU”).
However, the activities of such agencies are focused on employment activities that do not imply staff leasing but rather information on possibilities and terms of employment, mediation in employment, professional orientation and performance of individual measures of active employment policy based on the agreements with the National Employment Service.
Therefore, the agencies established under the LEICU are not the agencies that the LAE refers to.
This means that the previously established employment agency with working licence issued on basis of the LEICU would have to obtain the new working licence in order to perform the activities of staff leasing in terms of the LAE.
Provision of working licence – is the procedure simpler if I already have the working licence under the Law on Employment and Insurance in Case of Unemployment?
Yes, in that case it is deemed that the agency meets the operating requirements in terms of premises and technical requirements, hence it is not necessary to provide the evidence of meeting such requirements.
On the other hand, an agency operating in accordance with the LAE has to prove that it meets special staffing requirements. Namely, the person authorised for conclusion of employment agreement and staff leasing agreement has to fulfil the prescribed requirements in terms of education degree and to have passed a professional exam specific for the activities of staff leasing under the LAE.
I have obtained the licence – can I start concluding the staff leasing agreements with beneficiary employers immediately?
The LAE prescribes that company and entrepreneur may not perform the activity before registering one of the two specified activities in the business register, nor can it have registered such activity without the previously issued licence.
In relation thereto, the agency is obliged, within eight days after the receipt of the licence, to apply for registration of appropriate business activity and business name which will specify, as subject of operation, “Temporary employment agency”. The procedure of registration in the business register takes up to five working days.
This article is to be considered as exclusively informative, with no intention to provide legal advice.
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