Montenegro has recently obtained a new General Collective Agreement (GCA), after almost 18 months of a hiatus. The GCA came into force on 30 March 2014, as a result of bargaining among the representatives of the Government, representative trade unions and the Employers’ Union of Montenegro. The GCA is initially valid for 2 years, and applies to all employers in Montenegro.
The GCA seals the legal gaps which have existed since October 2012, when the previous general collective agreement expired. Specifically, the Montenegrin Labour Law provides for a high-level regulation of a number of entitlements (such as the length of paid leave, amount of salary compensation and salary increase, conducting of disciplinary proceeding, criteria for increase of annual leave, etc.), leaving the detailed regulation to collective agreements (general collective agreement, branch collective agreements, and/or individual collective agreement at the employer’s level) and/or employment agreements. As a result, employers operating in industries which are not covered by a branch collective agreement (e.g. trade) have been facing a number of legal gaps in the past period, since the mentioned entitlements are rarely regulated in individual employment agreements.
We shall outline below the most important provisions of the GCA:
Leaves – Employers are obliged to increase the statutory minimum annual leave (20 working days) for one to five working days, depending on the total length of the employee’s service (one working day for employees with 5-15 years of service, two working days for employees with 15-25 years of service, three working days for employees with 25-35 years of service, and five working days for employees who have generated over 35 years of employment). Employees with disabilities and parents whose children have development difficulties are entitled to additional three working days, in additional to the general extension granted by the GCA. A single parent of a child not older than 15 years of age is entitled to additional two days of annual leave. The GCA also extends the reasons for paid leave given in the Labour Law, defining the length of paid leave in each case, and introduces grounds for unpaid leave, which may last up to 30 days within a calendar year.
Salary, compensation of salary, and other earnings – The GCA defines job coefficients according to the level of employee’s education. Basic salary may not be lower than the amount obtained by multiplying the relevant job coefficient and the prescribed benchmark. The benchmark is determined by a separate agreement concluded among the signatories of the GCA. It currently amounts to EUR 90 gross.
Hourly wage is increased for at least: 40% for work in a night shift, 40% for overtime work, and 150% for work on a state or a religious holiday. If more than one of these grounds cumulatively applies (for example, the employee works overtime on a public holiday), percentages of increase shall be added up starting 1 May 2015. In the meantime, until 30 April 2015cummulation is possible until the 150% maximum threshold is reached.
Salary is regularly increased for each commenced year of employment, as follows: 0.5% per each year of employment service if the employee has up to 10 years of service, 0.75% per year of service for employees with 10-20 years of service, and 1% per year of service for employees with over 20 years of service.
Employers have a new obligation – to pay at least two minimal net salaries to the employee, in case of death of his/her immediate family member, or to the employee’s immediate family member, in case of the employee’s death.
The GCA defines the amount of salary compensation in cases set by the Labour Law. Employee is entitled to 100% of his/her (proportionate) salary while not working because of state or religious holidays, annual leave, paid leave, professional training pursued upon employer’s request, participation in an employer’s body, trade union organ or state body or non-compliance by the employer with mandatory work place safeguards. Suspension of work without employee’s fault (so-called forced leave) may last for up to 6 months in a calendar year, during which period the employee is entitled to a salary compensation in the amount of 70% of his/her average salary in the previous six-month period, but no less than the minimum salary.
The GCA also mandates a retirement severance package, in the amount of three minimal net salaries at the time of payment.
Per diem for domestic business trips is set at 20% of the coefficient benchmark used for the purpose of determining salaries (see above), while per diems for business trip abroad are payable in line with a separate regulation. Use of employee’s private vehicle for business purposes (with the employer’s consent) is to be compensated in the amount equal to 25% of the price of one litre of gasoline per kilometre.
Disciplinary proceeding and termination of employment – The GCA contains a catalogue of minor breaches of work duty (which represent a ground for monetary fine) and major breaches (which represent a ground for dismissal). Additional breaches may be prescribed in a branch collective agreement, individual collective agreement, and/or employment agreement. Disciplinary proceedings for determination of employee’s liability for breach of work duty are regulated in detail.
Mandatory funding of trade unions – Employer is obliged to transfer 0.2 % of each salary payment made to a member of a representative trade union in Montenegro, into to a special fund of the relevant union. This money is supposed to be used for employees’ recreational activities and prevention of occupational disability. Employers bound by a branch collective agreement which impose a similar payment obligation for the benefit of an industry-specific trade union are exempted from the obligation to pay the same type of charge under the GCA.
