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Views/ European Employment Law Update 2016 – Montenegro Chapter
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03/02/2016
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This article, authored by Jelena Danilović, was originally published in the 2016 European Update Brochure published by Shepherd and Wedderburn LLP.

Branch Collective Bargaining Agreements

Montenegrin  employment  and  labour  regulation  did  not undergo any signiicant changes in 2015. Certain changes were introduced, however, in the area of industry Branch Collective Bargaining Agreements, as follows:

CBA for Banks

The Branch Collective Bargaining Agreement for Banks, other Financial Institutions and Insurance Companies (CBA for Banks) ceased to be valid and applicable with effect from 3 August 2015.

By way of background, the CBA for Banks was unilaterally repealed by the Union of Employers of Montenegro in February 2015, with a six-month notice period. However, since a new branch collective agreement was not concluded in the meantime, the existing CBA for Banks ceased to be valid in August.

As a consequence, all obligations provided for in the CBA for Banks are no longer in force. For example, the CBA for Banks obliged employers working in this sector to pay a higher redundancy payment amounting to a minimum of 24 net salaries of the employee. Also, the same amount of 24 net salaries was set as the mandatory incentive severance payment in the case of employment termination on the basis of mutual agreement between the parties, which discouraged the termination of employment agreements in this sector in practice.

Banking sector employers are now free to enter into mutual termination agreements with much lower incentive severance payments, and Montenegro has witnessed numerous employment terminations with lower severance packages being provided.

CBA for Telecommunications

A new Branch Collective Bargaining Agreement for Telecommunications (CBA for Telecommunications) was enacted on 30 September 2015. It is applicable to all employers in Montenegro who work in the ield of telecommunications (cable, wireless, satellite etc.) for the next three years.

It provides for  certain  additional  incentives  for  employees in comparison to the Labour Law and the General Collective Bargaining Agreement for Montenegro, as follows:

  • number of days of annual leave and paid leave;
  • salary determined on the basis of a 30% higher base for calculation than the base set at the state level;
  • salary increase rates for overtime work and on-call time; and
  • payments for redundancy equal to 60% of the average monthly salary paid in the last six months to the employee (or on the branch level, if more favourable), per each year of employment with the current employer.

Also, the new CBA for Telecommunications has a new list of breaches of work obligations which may trigger employment termination, as well as a separate list of additional reasons for termination (e.g. breach of non-compete clauses, misuse of company property, misuse of sick leave, inappropriate behaviour, etc.).

Employers were given a six-month deadline within which to harmonise their internal Collective Bargaining Agreements with the new CBA for Telecommunications.

Considering these changes, employers working in the banking and insurance and telecommunications sectors in Montenegro will need to perform a thorough review of their internal enactments and practices in order to ensure compliance with these new regulations.

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