The employment relationship between an employer and an employee begins with signing an employment contract. This formally marks the commencement of the work, and at the same time, the rights and obligations of the employee in the employment relationship arise. Below are more details.
According to the Labor Law, the employment relationship represents a regulated legal agreement between legal entities. In this context, the legal entities are the specific business entity (the employer) and its employee, who mutually sign an employment contract.
The employment contract represents an individual legal document based on establishing an employment relationship and regulating specific rights, obligations, and responsibilities of both the employees and the company. The contract is considered concluded only when both the employer and the employee sign it, and it must contain all the mandatory elements regulated by the Labor Law. However, the commencement of the employment relationship can sometimes depend on other factors.
For this reason, in the rest of the text, we will look further into this topic, as well as the realization of the rights and obligations of the employee during employment.
1. Establishment of Employment Relationship
The establishment of an employment relationship begins with the signing of an employment contract. As a rule, it is signed before the individual to be engaged by the employer starts working, and the rights and obligations take effect only when the employment relationship is established.
The contract must be concluded in writing, and at least three copies must be made. The employee retains one copy, and the employer maintains two. The employer must keep the contract at the company’s headquarters or another business premises or location where the employee performs their duties.
2. Starting to Exercise Rights and Obligations
We’ve mentioned that the start of exercising the rights and obligations of an employee begins with employment. This means that they’re effective from the day the employee starts working.
On the other hand, if they don’t start working from the date specified in the employment contract, it can be considered that the employment relationship hasn’t begun. In that case, there won’t be any rights and obligations.
The mentioned rule won’t apply in exceptional situations:
- If there are justified reasons why the employee is unable to start on the day of signing or
- If the employee agrees differently with the employer.
In both cases, the moment of starting work is the basis for exercising rights and obligations from the employment relationship, so it holds greater significance compared to the employment contract, which is an individual act.
3. What are the Employer’s Obligations Before Establishing an Employment Relationship?
Before an employee starts working, the employer must fulfill certain obligations towards the person they hire. These obligations are usually communicated through the employment contract when signing, which is typically the standard practice.
In fact, it’s always recommended that all employee information be provided in written form. This indicates that the company has fulfilled its obligation to inform employees about their rights and responsibilities before they start working. Once the employee signs the contract, their signature confirms that the employer has informed them and is familiar with the document’s contents.
It’s worth mentioning that employees have the right to wages upon establishing an employment relationship, and calculating and paying wages is the employer’s responsibility. Additionally, the employment relationship guarantees workers other rights such as salary compensation, paid leave entitlement, approval of unpaid leave, annual leave, and other rights, all of which are also employer obligations.
# Responsibilities Before Starting Work for an Employee:
- Enter into a written contract with the person being employed before they commence work (whether it be a fixed-term or indefinite employment contract, full-time, part-time, or with shortened working hours, or another contract outside of an employment relationship – such as a contract for temporary and occasional work, a service contract, a contract for professional training and improvement, a supplementary work contract, a contract for the rights and obligations of directors without establishing an employment relationship, or any other).
- Submit a unified application for mandatory social insurance for the employed person within the legally prescribed deadline.
- Inform the employee about all conditions and rules of work, as well as the organization of work, and the obligation to adhere to contractual provisions – which includes behavioral rules the employer has stipulated as obligations arising from the employment relationship and are expected to be observed by the employees.
- Following the Law on Safety and Health at Work, familiarize employees with their rights and obligations in safety, life protection, and health at work.
- Provide written notice about the prohibition of harassment, as well as the rights, obligations, and responsibilities of both the employee and the employer regarding the prohibition of harassment – this pertains to the prohibition of harassment at work and related work activities. The employer must recognize and act preventively to prevent harassment and identify behavior indicating any form of harassment, all under the Law on Prevention of Harassment at Work.
- Deliver written information on rights and obligations arising from the Whistleblower Protection Act (a whistleblower is an employee who discloses information related to violations of regulations, violations of human rights, the exercise of delegated public authority, as well as other details on dangers to health, life, safety, environmental protection, and the like).
- Inform about the prohibition of smoking in every enclosed work and public space, as well as in a space not considered a closed public space but is a functional part of an area where specific activities are carried out (health care, education, social care for children, social protection, by the Law on Protection of the Population from Exposure to Tobacco Smoke).
- Familiarize employees with other rules of conduct and working conditions considered necessary for performing the job, as the employer has the right to define them independently through the work regulations or other general legal acts.
- Ensure compliance with collecting and processing data about all individuals being employed, per the Law on Personal Data Protection.
4. Employee Registration for Mandatory Social Security
Before employees start working, the company must register employees for mandatory social security before they start working. The unique registration is submitted electronically through the Central Registry of Mandatory Social Security (CROSO) portal. This procedure, as well as salary calculation tasks, are best entrusted to an authorized accountant.
The unique registration includes the following information:
- General data about the insured person and the insured entity;
- Insurance data;
- Data about the contribution payer.
CROSO is a unique database containing information about contribution payers for mandatory social security, insured persons, and insured entities. This includes data about the insured person, entity, and the contribution payer (employer). Mandatory social security provides health insurance, pension, disability insurance, and unemployment insurance.
Registration on CROSO cannot be submitted before signing the employment contract; i.e., backdating registration with an earlier date is impossible. Still, it is possible to submit it with a future start date for insurance, i.e., before the employee starts working. The registration is done at the earliest upon the conclusion of the contract (at the earliest date when the employment contract is signed and the start date of the employee’s work is determined) and at the latest before the start of work.
The unique registration is submitted electronically, directly through the Central Registry application, in the prescribed form – Form M.
5. Working Without a Signed Employment Contract
If an employee works in a company without a signed contract (off the books) or starts working before concluding an employment contract, it is considered that the individual is engaged and that the employment relationship is established on the day of commencing work. Additionally, the employer is considered to have committed an offense. Under the Labor Law, this interpretation aims to prevent employers from abusing off-the-books work and hiring without registration.
In this case, the company is obliged to employ that worker indefinitely, regardless of whether or not they had a signed employment contract with them in the previous period.
HLB T&M Consulting Belgrade, an accounting agency, provides services related to employment relationships, employment contracts, and other types of work engagements, employee registrations/deregistrations, and external payroll processing services. Contact us for any additional information or inquiries.
