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Bosnia and Herzegovina

Termination and Severance Policies

Learn about the legal processes for employee termination and severance in Bosnia and Herzegovina

Notice period

In Bosnia and Herzegovina, the notice period requirements for employee termination differ slightly between the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska due to their separate labor laws.

Federation of Bosnia and Herzegovina (FBiH)

The Law on Employment of FBiH dictates notice periods in the FBiH.

  • Minimum Notice Periods:
    • Employer to Employee: Minimum 14 days.
    • Employee to Employer: Minimum 7 days.
  • Maximum Notice Periods:
    • Employer to Employee: Maximum 3 months.
    • Employee to Employer: Maximum 1 month.
  • Collective Agreements and Internal Regulations: Notice periods can be specified in collective agreements or internal company regulations, provided they adhere to the minimum and maximum limits set by law.
  • Probationary Period: If a probationary period is included in the employment contract, the minimum notice period is 7 days for both employer and employee.

Republika Srpska

Republika Srpska has its own Labor Law which establishes notice periods.

  • Minimum Notice Periods:
    • Employer to Employee: Minimum 30 days.
    • Employee to Employer: Minimum 15 days.
  • No Maximum Notice Period Defined: The Labor Law of Republika Srpska does not specify a maximum notice period. However, courts may consider excessively long notice periods unreasonable.
  • Collective Agreements and Internal Regulations: Similar to FBiH, collective agreements or internal regulations can establish notice periods, as long as they meet the minimum legal requirements.

Severance pay

In Bosnia and Herzegovina (BiH), which is divided into two entities: the Federation of Bosnia and Herzegovina (FBiH) and the Republika Srpska (RS), severance regulations can vary due to their individual labor laws.

General Severance Pay Principles

Employees with indefinite employment contracts and a minimum of two years of continuous service with the same employer are generally entitled to severance pay upon termination by their employer. However, termination due to reasons within the employee's control, such as a serious breach of obligations, may disqualify them from severance. The severance pay is calculated based on the average monthly salary during the last three months of employment.

Severance in Federation of Bosnia and Herzegovina (FBiH)

In FBiH, the Labor Law of the Federation of Bosnia and Herzegovina provides the legal basis for severance pay. The minimum severance is one-third of the average monthly salary for each year of service, with a maximum severance of six times the average monthly salary. Collective agreements and contracts may stipulate higher severance amounts.

Severance in Republika Srpska (RS)

In RS, the Labor Law in the Republika Srpska provides the legal basis for severance pay. The regulations are similar to FBiH, with potential minor variations in detailed calculations based on specific collective agreements or employment contracts.

Additional Considerations

Severance may also be payable upon retirement in certain circumstances. Severance rights may be extended in cases of involuntary termination due to economic circumstances affecting the employer. Some industries might have sector-specific severance regulations within collective agreements.

For the most up-to-date and case-specific guidance, it's always best to consult the relevant labor laws of your entity (FBiH or RS), sector-specific collective agreements, your employment contract, and a qualified labor law attorney in Bosnia and Herzegovina.

Termination process

In Bosnia and Herzegovina, termination of employment can be categorized into three main types: termination by mutual agreement, termination initiated by the employee, and termination initiated by the employer.

Termination by Mutual Agreement

This is the most straightforward form of termination where the employee and employer agree to end the contract amicably.

Termination Initiated by the Employee

In this case, the employee resigns.

Termination Initiated by the Employer

The employer terminates the contract. This has more stringent rules to ensure employees are protected from arbitrary dismissal.

Key Principles for Employer-Initiated Termination

Employers in Bosnia and Herzegovina must adhere to these key principles when terminating employees:

Grounds for Termination

  • Economic, Technical, or Organizational Reasons: This includes restructuring, technological changes, or lack of work.
  • Employee's Incapability or Lack of Qualifications: This refers to the inability to meet established work performance or qualification standards.
  • Violation of Work Duties: This is defined in the labor laws, collective agreements, or employment contracts.

Written Form

Termination notice must be in writing, clearly stating the reasons for dismissal.

Consultation and Selection Criteria (if applicable)

In cases of collective redundancies, employers might need to follow consultation procedures and establish objective selection criteria.

Additional Important Points

  • Probationary Periods: Probationary employees have weaker protection against termination.
  • Discrimination: Termination must not be based on discriminatory grounds such as gender, race, religion, etc.
  • Challenging Termination: Wrongful termination may be challenged in labor courts.

Please note that specific details may vary slightly between the Federation of Bosnia and Herzegovina (FBiH) and the Republika Srpska (RS).

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