Labor law: A Counter-Proposal

These are notes of a an alternative to the labor law, on the example of the Serbian labor law, which flexibilized the Serbian workforce, stripped the rights and put additional pressure on those who were employed under it. Since alternatives to the laws applied in Serbia can (more or less) be considered similar to what could be proposed elsewhere in the region (e.g. Croatia and Slovenia), I’ve decided to publish it in (the original) English.

I have also started to re-use parts of this texts (and omit others) for the “Labour Law: A Counter-Proposal” thread on this blog, in order to carry out a more through and coherent analysis, from a Marxist perspective (focusing on the outsourcing of production, and how to overcome it).

This is my plan:

  1. A SNAPSHOT OF INEQUALITY – Already published on this blog (actually, the first post on this blog) under the title “Red Tape”: the Labor Crisis in Europe’s Most Unequal Country. 

So, as you can see, I’ve only published the 1/5 pieces, with the rest progressing slowly. The original text (below) was made in summer 2017, for a project funded by the Friedrich Ebert Stiftung, called “Democratic Left South-Eastern Europe”. I would not write it like this now (with unnecessary discussions of institutional complementary, etc.), and I would have to include new material on labor law alternatives made available by Mario Reljanović, an important labor law expert from Serbia.

However, I’ve decided to put it up here, so that it can be of use (in the form of my original notes) to others.



Serbia’s immanent labor law reform which is ensuing this year, threatens to transform the last remnants of the welfare state and social protection elements from labor regulations. These include working age length, pensions rights, working time regulations and overall employment rights and procedures. The rationale behind the stripping-away of former rights lies in an unsustainable austerity-polity approach which has already pushed in the preceding reforms in 2014. In this light, the present paper aims to survey the polity behind present labor reforms and attempt to offer an applicable counter-proposal while taking into account the current economic context of Serbia’s workforce. This will be done in two steps: 1) via analyses of previous labor laws and domestic regulations and 2) a point-by-point counter-proposal of the labor law reform draft.


Recommendation time-frame: winter 2017 – spring 2018.

Rationale: Increasing public debate, along with worker’s strikes and pressure from foreign-owned companies for yet another reform of the current labor law merits immediate attention if alternative conceptions are to be made viable in a timely manner.

Addressees: Confederation of Autonomous Trade Unions of Serbia, the Left Summit of Serbia, student activists from Belgrade and Novi Sad, general public.




Ia) Historical background

After the break-up of Yugoslavia, different successor nation-states took their own paths towards establishing market economy. Its establishment, however, coincided with a new wave of governmental reforms known as the “Washington consensus” or more popularly,  the “10 commandments” of neoliberalism. These are: 1. fiscal discipline in the form of low budget deficits (to avoid recourse to inflation tax), 2. public expenditure rationalization (include cuts in public expenditure), 3. tax reform to broaden the tax base and cut marginal tax rates (in the form of VAT or value-added tax), 4. financial liberalization 5. competitive exchange rates to induce rapid growth of non-traditional exports, 6. liberalization of trade (through annuling trade barriers and low tarrifs), 7. encouraging foreign direct investment 8. privatization of state-owned enterprises, 9. business deregulation and 10. property right enforcement [1].

Apart from Washington based institutions such as the World Bank, these set of reforms were also advocated by the IMF, the European Central Bank and the European Commission, or what came to be known as the “Troika”. And although the histories of neoliberalism can be traced differently [2], the Washington variant came to be enforced on the European Unions’ “aspiring” peripheries through these institutions. However, it was according to Michel Camdessus, the former head of the IMF, that the IMF iself had been carrying out a “silent revolution” throughout the socialist Balkans already during the eighties, at the time the Washington list was compiled [3]. Without further discussing its origins, one might put into perspective the transition discourses that followed such policies: it was already during the break-up of Yugoslav society that certain neoliberal options were becoming available and this reflects in the economic rationality behind further economic reforms [4]. What’s more, given the crucial importance of labor laws in Yugoslavia prior to the break-up (with the “basic organizational unit of labor” as their central tenets along with the existence of social property), the insistence on labor law reforms in post-Socialist successor states becomes central.

In this context, the flexibilization of labor was to become a precondition to the implementation of the aforementioned reforms. Since they were incompatible with the existence of a stable and well-protected workforce, these reforms necessitated the abrogation of the last vestiges of social protection and welfare state. Done simultaneously across the region, the reforms initiated a long-lasting race to the bottom. During its beginning in ex-Yugoslav states previously bent on full employment under their Socialist predecessor [5], this meant exposing the majority of the workforce to untamed market relations for the first time. And, in rapidly changing markets such as those of post-Yugoslav Serbia, this meant the rising inadequacy between the aging ex-self-managed labor force predominantly employed in former state owned industrial enterprises and the slowly emerging labor markets predominantly based on the trade of goods and services. Deindustrialization coupled with outgoing migration (inherited from Yugoslav times) and traditionally high informal employment meant rising unemployment due to the incessant implementation of the aforementioned reforms throughout the nineties and 2000’s. When one takes into account the the first waves of privatization started out already in the nineties and the neoliberal policy reforms continued to be implemented by different governments throughout the 2000’s, Serbia’s uniquely long 30-year-long transition comes to foresight, as do its bitter and lasting social consequences.

In the graph below (1.1) two sets of data are shown: the number of unemployed persons vs the total population of Serbia (excluding Kosovo) from the beginning of 2000’s after the fall of Slobodan Milošević up to the present moment (01.01.2001 – 05.25.2017). Despite constantly declining population (7.6 mil to 7.1 mil in more than 10 years) the number of unemployed persons wildly oscillates due to reforms including privatizations and bankruptcies of former state owned enterprises (most of which where privatized 2001-2004), after which it recovered only to return as the shock wave of Europe’s financial crises slowly set in the form of a credit crunch. Due to Serbia’s largely euronized (indexed or denominated in euros) credit structure, there was a subsequent withdrawal of available commercial credit, most of which was never invested in the productive sector [6]. The gradual decline of the number of the unemployed after 2013 is surprising given the prohibition of public sector employment which announced precisely in 2013. This can be attributed to a change in measurement techniques whereby the definition of employed persons in the Labor Force Survey (LFS) was extended to include any labor being done or payment received in the week before the statistical measurement [7]. The new ways in which the Republic Statistical Fund began to count flexible labor coincided with the new labor law reforms which were enacted in 2014 and which legalized formerly illegal means of flexible labor employment. This means that we can talk of a correlation between precarious labor legislation and a return of “hidden unemployment”.

Graph 1.1:


Thus the unemployment rate (1.2) formed below expresses the aforementioned dynamics only so far. It depicts the years following the crises of 2008 up to the present moment (01.01.2008 – 05.25. 2017) and offers an inadequately optimistic outlook due to the shift in statistical measurement in the years after the crises:

Graph 1.2


The sudden drop in unemployment after the peak of the crises is due to precarious labor being taken as a standard form of employment by the Labor Force Survey described above. According to recent studies, while a 2% decrease in unemployment can be attributed to demographic “brain drain”, the rest relies only on the newly defined surveyed statistics rather then registered (the Republic Statistical Fund uses both, but publishes the surveyed only): “Although there is no data on registered unemployment rates since 2012., they are easy to calculate: in 2016, the surveyed rate of unemployment was 15,3% and the registered one 26,2% while the surveyed employment rate was 45,2%, and the registered one 33,4%.” [8] However, what is obfuscated is not only the quantitative dimension of unemployment, but also its quality.

For, while it is conducted in accordance with the International Labor Organization (ILO) standards, the survey unjustifiably excludes crucial factors such as informal employment, vulnerable employment, underemployment, working time, type of contract or earnings and subjective assessment by the interviewees themselves. Most crucially it lacks any indicator of labor market mobility and transition. Thus any indicators referencing unemployment quality are omitted. The data thus gathered is further presented only in its aggregated form without being disaggregated according to sector, age, status, vocation and education. Ultimately,  it is not even present in the usual Eurostat tables. Far from mere errors, all of this results in frivolous political interpretations by the government: the problems which it diagnoses and the remedies which it proposes. Since it is in control of the statistics, it justifies its policies on the grounds of its own interpretations. The entire labor reforms – not only of law and jurisprudence but also of the whole institutional infrastructure including, as we shall see, the higher education sector – are rooted in this. By stating that the main problem of Serbian economy is the incongruence between the supply of and demand for domestic labor, the Serbian government justifies a set of contradictory practices. It enforces austerity policy on “surplus” employment, abandons active investment to FDI and then induces precarious labor laws to bring down unemployment. It does the first in order to cut down on jobs that are “out of sync” with the market (such as certain higher education programs and public sector servants), the second in order to attract FDI and the third so it can counter the first. In practice, this means that employment is cut where interpreted as “unneeded” even when that is not the case: in 2016 new medical doctors  were “unneeded” due to low demand for new jobs; low demand for their jobs came from the public employment prohibition; the situation is resolved in their precarious employment anywhere in the spectrum of labor, formal or informal. And their higher education was reformed in order to stop the alleged “hyperproduction” of new doctors [9]. The circle goes on.

What is hidden in such cases is the underemployment that is produced: due to lack of unemployment indicators, it is easy not to see that the real problem lies not in the simple number of un/employed doctors or any other laborers. The problem is their allocation and the quality of demand. The majority of employed are high-school educated as opposed to the minority with higher education (57% vs 13%), which is in correspondence rather than contradiction with the education profile of unemployed at the National Employment Service (NES). Thus, strictly speaking, there is no incongruence between the supply and demand of labor but a lack of demand for qualified jobs [10]. Contrary to what the government and government’s media publish as relevant statistical data, no such problems exist in the labor market and the grounds on which its resolutions are justified appears null, not least, the Labor Law amendments from 2014.


Ib) The 2014 Serbian Labor Law

Since the Labor Law Reform in Serbia was drafted according to  a previous Croatian Labor Law reform, which was in turn drafted according to a Slovenian one in the aforementioned “race to the bottom”, we may analyze it as an examplary neoliberal legal framework for employment regulations for the entire Western Balkans. Previously, the original Serbian Labor Law was changed 3 times: first announced in 1. Official Gazette RS No. 24 from 15/03/2005, amended in 2.  Official Gazette RS No. 61 from 18/07/2005, 3.  Official Gazette RS No. 54 from 17/07/2009  and 4.  Official Gazette RS No. 32 from 08/04/2013). However, only the one from 2014 follows the trend of legalizing precarious labor and in that sense is path-dependent on the Balkan variants of neoliberal policy reforms. Thus, we will focus on this particular law as the analysis of its content can be reproduced to a large extent on previous versions of similar labor laws in different Balkan states.


The main gist of the law is that it legalized precarious labor in summer 2014. This labor law reform legalized already existing informal practices in its already poorly protected labor force while simultaneously providing the employer with even more freedom over the rights of his employees. This can be broken up into several sections:

  1. Labor time allocation. First, as is unusual for such documents, the Law redefines labor time:
    1. “Labor time is a chronological period in which the employee is in obligation to carry out labor or be at disposition to carry out labor according to orders given by the employer, at the place where labor is being carried out, in accordance with the law.” (Article 50, point 1).
    2. It also introduces a notion of “standby-time” which is not considered labor time: “Time spent while the employee is disposable to carry out labor on the employer’s call and to carry out labor where it is needed, whereby the employee is not at the place where his labors are needed, in accordance with the law, is not considered labor time.” (Article 50, point 3). Note that this can be both night and day.
    3. It increasingly standardizes flexible labor time (regulated by articles 53-58). While working overtime is limited to working 12 hours a day/48 hours a week, flexible labor time can be re-arranged by the employer during the so-called “redistribution period” up to 13 hours per day and 60 hours a week (Article 57, point 5). Also, “Redistribution of labor time is not considered overtime” (Article 58), since it will be compensated by working less during other weeks included in this period without being paid for working overtime. Although such practices have existed prior to neoliberalism, they were considered exceptions demanded by the labor process and not recommended by the labor law. By instituting such practices as standard, the employee working overtime could practically be made to work extra hours without getting paid.
  2. Leisure time allocation: as similar laws before it, this law regulates daily, weekly, monthly and yearly rest and vacation times by giving the employer full power over their distribution and consumption, providing only minimum of 15-45 minutes of rest a day and flexible vacation periods, all allocated at the discretion of the employer. This means that the employee usually does not know when he will get any rest in the case of the working day or week, and even less the time of his vacation which could be announced as little as seven days ahead of the date it is set to begin. Furthermore, the law states that in exceptional cases it could be announced until the very moment ahead of the rest or vacation (regulated by articles 63-76).
  3. Union representation: this is mostly defined by what’s not in the law. Unlike previous laws, the employer now needs not notifying the employee of whether his social security benefits such as pensions are actually being paid or not. Also, the conditions for determining the representativeness of the unions is sharpened (regulated by articles 218-220).
  4. Termination of working contract: the employer can terminate an employee’s working contract not only due to objective breaches of the contract but also by purely subjective estimation of one’s knowledge and capabilities or obligation fulfillment. This even includes the right of the employer to subjectively asses if the employee can be considered as a culprit of a crime regardless of whether he has been legally prosecuted for it or not:
    1. “The employer can terminate the employee’s contract if the latter fails to respect work discipline, in case (…) 5) his behavior presents an act of criminal offense made during labor or related to labor, regardless whether any criminal charges have been brought up against his or hers criminal offense.” (Article 179, point 5). This basically means that an employer can pronounce his employee guilty of any unproven crime and lay him off in an immediate manner.
    2. If the employer explicitly breached his contract by doing so, in the course of dispute the competent court can overrule the employee’s plead in case the employer in any way justifies his subjective assessment: “If the court during trail determines that there were grounds for the termination of the employee’s contract, but that the employer acted contrary to the regulations of the law which determines the termination of the labor contract, the court will dismiss the request of the employee to get his job back, and will determine in the name of damage repayment a fee to be paid on the behalf of the employee up to six times of his or hers monthly wage.” (Article 191).
    3. Also, the time for the notification of the termination of the working contract is different for the employer and the employee: whereas the employee needs to notify the employer 15 to 30 days prior to terminating his contract, the employer can lay off any employee without notifying him beforehand (regulated by articles 178 and 179) . The time for termination notification is still valid only in one exceptional case whereby the contract is terminated by the employer due to his assessment of the employees’ incompetence in which case he has 8 to 30 days to notify him (Article 189). Furthermore, what’s missing from the 2014 reform is an article which existed in the original Labor law (Article 178) which regulated the “forced termination” issue whereby the employee himself would quit due to blackmail by the employer so as to avoid the cost of social benefit of laying off his employees. This issue is now not being regulated at all [11].

Due to the above-depicted economic setting, the introduction of flexible or precarious labor represented a complement to the austerity-driven polity following the aftermath of the financial crisis of 2008. In its wake, the Serbian government faced two challenges: to rise employment while simultaneously cutting labor costs. Additionally, its monetary policy was limited by an overly euronized credit structure leaving no possibility of external devaluation. By legalizing precarious labor, the new labor law reform gave an impression of an improving employment rate while increasingly subjecting the labor market to foreign investors’ demands. At the same time, the law acted as an “ersatz” internal devaluation: through slashing the cost of labor and its social protection, it had relieved the pressure off the need for a currency devaluation which would sever its ties with the Eurozone.


The content of the present Labor law, however, was not conceived unanimously by state officials and employers. Although actively participating in its creation under the tripartite dialogue, some of the Unions took to the streets over the law’s hasty implementation. Examples of struggle against the new labor law thus include the initial reactions of the various Trade Union Associaions (“Nezavisnost”, “Sloga”, the Confederation of Autonomous Trade Unions of Serbia, etc.) which protested over its announcement in the summer of 2014. Along with several small and large left-wing organizations (the letter including the nascent Left Summit of Serbia), the Union-led protests represented one of the most numerous reactions to the laws, albeit without a developed strategy and without much effect. The mandatory government-organized public debates over the law were attended by these organizations (often by force due the government’s secrecy over the focal points of the law), but quickly subsided behind close curtains. And although the unions participated in the tripartite dialogue with the employers’ associations and the state over the content of the law, the result quickly showed the limits of the dying tripartite solution [12]. Ultimately, the subsequent reaction by the unions was limited to protesting only and failed to provide a lasting strategy against future attempts at labor rights suppression.




The current law is about to be amended during the end of the 2017 with further social protection being stripped away (e.g. maternal leave and other remanants of former labor rights). Furthermore, this law opened the gates to profound infrastructural standardization of precarization:  agency-led outsourcing of cheap labor force which predated the law already practices throughout the region, the shift from welfare to workfare whereby welfare receivers would have to work-off their benefits, and the introduction of dual education whereby part of the specialized young high school students would work in companies for half the minimum wage with no social benefits at all. These laws can be understood as labor law adjustments further regulating its objective: precarization legislation. Thus, apart from its amendment in late 2017, it should come as no surprise that currently three labor-related laws regulating precisely these forms of precarization are awaiting parliamentary approval: 1) Since 2016 the National Assembly (Serbia’s Parliament) established a working group drafting a law on agencies for temporary employment which should enter public discussion in June 2017. The law would legalize “leasing” agencies renting workers at low prices and little to no labor rights open to both foreign and domestic demand [13] . Already in practice in Croatia, this law only shifts the competition for lower wages onto the level of the company, firm or enterprise often employing workers from different agencies which can have dramatically different rights and wages for a single job resulting in serious damage to the job’s maintenance or execution due to their expendability (for example, outsourced cleaning or maintaining aircraft safety, public buildings, etc.). 2) Five sectoral laws regulating the entire public sector employment at the beginning of 2018. Once public sector employment prohibition ends, these laws will take over the employment regulations also legalizing both free mandatory internship a.k.a. paid labor with no social benefits and free volulonteering a.k.a. mandatory unpaid labor. Both forms would be necessitated for those seeking employment in healthcare, education and any public service thereof [14]. 3) Dual education law: the draft for this law has already been completed and is currently undergoing public discussions while Serbia’s Chamber of Commerce and Industry has already announced high school education reorganization for the 2017/2018 academic year [15]. This law is both compatible and incomptable with the Labor law: while it carries on its mission of precarization legislation, it bypasses some of its constraints. For example, while the Labor law (article 25) forbids child labor under the age of 18 without the consent of the child’s parents, the Dual education law makes such labor mandatory without the possibility of parents protesting it since it foresees that the labor contract is made between the educational institution and the employer, totally excluding the subjects of labor – children and their caretakers. Also, the Dual education law (article 9) excludes the Labor law as a legal reference since it foresees that “the rights of laboring children are secured exclusively by laws regulating higher education”, opening up space for further exploitation without legal protection [16].

The sheer amount of high-speed reforms being implemented requires appropriate statistical tracking. Thus it is important to note that the Ministry of Public Administration and Local Self-Government has announced an implementation of the so-called “eZup” project which will connect six major statistical databases – the statistical analyses provided by the Birth registry, the Ministry of Interior, Pension Fund, National employment office and the aforementioned Central Registry for Mandatory Social Welfare’s statistics to include digital tracking of precarious labor [17].

Given the composition and sheer amount of material at hand, any further battle over the law requires careful coordination of available resources. As such, the very way in which the law was developed needs special attention, along with more short-term goals aiming for immediate amelioration of the situation as well as providing the conditions for future resistance.




We began with an analysis of the Washington consensus and how its policies were implemented in the Balkans with a focus on the Serbian case. The Labor law reform was one of its crucial points. However, coming back to the consensus, of the “10 commandments”, only 3 relate to foreign policies while the others advocate local austerity: import, export relations and foreign direct investment are the key words here. While Serbia has already cut its previously high exchange rates in early 2017 and already liberalized trade with the Stabilization and Association Agreement which entered force in 2013, the need to attract foreign direct investment still plays a key role in Serbian policy, as well as generally in the Balkans. It is one of the most long-lasting causes of and excuses for labor reforms and austerity in the peripheries of Europe. And given the implementation of the Berlin process during the pause of Eurointegration, the prospective creation of a single Western Balkan market will augment these processes even more.

However, while criticized from both the left and the right, it can be said that the foreign direct investments have not lived up to their name. Foreign direct investments do not “exist”: simply put, most of them return as profit within the country of origin (usually a highly developed country). Although cheap peripheral labor might be used to produce products for multinational companies seated in highly developed countries, it won’t “attract” their investments per se. Thus the most widely acclaimed neoliberal chant has a flaw: cheap labor cannot attract foreign investment since capital flows seek high profit rates found mostly in already developed countries. Simply put, it is by far less profitable to sell a Fiat car in Serbia rather than in Italy, although it might be more cheap to produce one. This is why local governments constantly need to create new laws and conditions for foreign investors including privatization laws and subsidies for the purchase of local property, tax-free zones and expedient legal permits including “grace period” wage subsidies neatly coupled with local wage cuts to serve as attractors for capital investment [18]. In that sense, the labor laws are but a consequence of a larger policy approach and the rationale behind them is flawed. Simply put, low wages don’t attract FDI – subsidies do.

Hence the question why do these policies still drive labor reforms and to answer it we need analyze the scope of the problem deeper. What we are left with is “ritual austerity”: implementing austerity policy universally outside of any necessary or rationally justifiable economic framework. While the peripheral position of Serbia in the European division of labor certainly reproduces the inequalities haunting the peripheral working classes (wage and social protection differences, competitive agency employment), the local labor laws cannot be explained as justified on those grounds. Simply put, Serbia’s economy could very well do without any of the labor legislation reforms currently implemented. However, the problems run far deeper: it could be argued that this politico-legal framework unintentionally establishes a new form of “institutional complementarity”. The notion of “complementarity” is used in institutional economics (and the Regulation school) to designate: 1) a relationship between institutions where one compensates for another’s lack and vice versa; 2) the process of adjustments between different institutions and their co-evolution regardless of a “grand designer” or a master plan. This can effect their efficacy both in a positive and negative way, but can also influence social stability. According to Robert Boyer, “All institutional forms result from social compromises that are then embedded in law, jurisprudence, social norms and conventions. Each of these institutional forms induces some specific behavior of firms, wage earners, banks and so on. At the level of the economy, there is no automatic mechanism that would ensure their compatibility. Instead, institutional forms continuously adjust and thus co-evolve.” [19] Through trial and error, both market- and politically-induced institutional configurations emerge, creating a system of interdependence beyond the will of any given actor.

The (un)intended consequence of the above-analyzed set of laws (Labor law reform in conjunction with education and public sector reforms) is an institutional system with different sub-systems that can be analyzed through the notion of complementarity. In this sense through institutional complementarity, the practicing of austerity is encouraged in different institutional settings regardless of independent wills of any given actors. At the level of the Serbian nation-state, the employers, both domestic and foreign (and also court magistrates, public officials and private managers) will all now have novel powers of decision-making in their respective institutions to enforce unconstrained discipline on the exploitation of labor done by volunteers, interns and precarious semi- or fully-employed workforce.  This network of austerity-based institutional infrastructure also shows prospects of further co-evolution: with the dual education sub-system and mandatory public sector volunteering, a steady supply of cheap or free specialized labor is ensured, both offsetting high unemployment rates while increasing competition among workers. Given no possibilities of youth workforce and volunteer or intern unionizing, their possibilities of political resistance and social protection are thus annulled (and need to be so if the formation of such a system is to overcome functional particularism of independent institutions). At the level of intermestic connections (regional but trans-national institutional connections) the agency-driven employment governance will likely take-over labor allocation within different sectors of the Balkan economies, as was the case in Slovenia and Croatia to an extent, where such practices already exist. Once legalized, this will further increase competition between the workers and shift the labor-related organizational pressure from the employer onto other corporations (regulation of payment and any remnants of social security). This amounts to the privatization of social security further offsetting the financial cost associated with protections guaranteed by the Labor law, thus increasing its austerity-effects. This dimension of institutional change goes beyond any given nation-state as it basically gives agencies trans-national business opportunities in the Balkans as a whole, while entrusting them labor-allocating powers within single nation-states. The consequence of this institutional network is further social instability. Given the rising inflation and prices of consumer goods in Serbia coupled with such institutional austerity, the end result becomes the inability of most forms of labor to guarantee the basic reproduction of the available workforce. And without lines of flight available to workforce in the European Union in the form of labor mobility, the political and economic prospects of Serbia’s and Balkan’ laboring classes appears null.

This can be understood as the Balkan variant of the mature phase of what Bob Jessop termed “austerity polity”: “a continuing fundamental institutional reorganisation of the relations between the economic and political in capitalist formations. […] Whereas conjunctural [austerity] policies are found in the pattern of neoliberal policy adjustment and associated with targeted cuts in specific areas, an enduring politics of austerity is characteristic of neoliberal regime shifts and assumes the form of general fisco-financial restraint, putting downward pressure on most areas of expenditure, especially discretionary ones.” [20]. Beyond a simple economic response, the permanent long-term application of austerity alters the institutional and political matrix of society: including the reorganization of parliamentary democracies (shifting to market-focused “disciplinary democracy”) and the disorganization of subaltern classes (precarious workers and minorities, augmented by gender oppression). 

The previously analyzed labor law in the conjunction with other laws gives an overview of how this institutional complementarity might function in what seems to be the emerging Balkan “austerity polity”. As these laws make up only part of the wider institutional infrastructure reforms based on “competitive austerity” polities of particular Balkan states with identical labor laws, their full consequences cannot be overemphasized. At this point, our contention is that any alternative institutional setting would be more sustainable than the present one. However, in terms of thinking how to counter-act such tendencies, one needs to account for the above descript wider social reorganization they entail. In that sense it must be clear that countering their effects goes beyond mere legislative struggles. As rules governing labor socialization both at the private and public sector, they entail a change in practices relating both to institutional and ideological aspects of the problem. Thus, any counter-proposal must react to them on both levels. In this sense, our offer would be to provide a set of guiding principles for a “counter-complementarity” or re-configuration of existing resources and present institutional matrices in a way that restores social rights without damaging the economy.  As such, they must function within an actually existing setting. The principles presented here are based on analyses of current Serbian institutional setting and are viable within them without resorting to budget overload.




Short-term – institutional:

  • Increasing union rights and membership in both private and public sector
  • Creating conditions for precarious workforce unionizing

Short-term – ideological:

  • Abandoning the tripartite form of dialogue
  • Syndical education

Long-term institutional and ideological:

  • re-defining the relationship between education and workforce composition
  • re-regulating the social protection of labor rights
  • annulment of workfare
  • re-activation of self-managed infrastructure




Short-term – institutional:

  • Increasing union rights and membership in both private and public sector.Due to syndical pluralism there are today about 24 000 trade unions operating across Serbia. In terms of number this is at the top of European-wide standards, but in terms of effects and employee protection, their strength is null due to marginalization by the labor laws and public policies. In practice, unions are not consulted or are formerly consulted in matters of legislation, while in terms of field activity they are passive or mostly focused on technical issues. Additionally, the biggest unions (e.g. “Nezavisnost” and “Sloga”) are by role close to state policies as they were formed out of the ex-Yugoslav state-integrated unions active in the eighties. A significant heritage from the eighties is the shifting relation between union leaders and workers themselves. According to Jake Lowinger most of the protests in the eighties against the break-up of Yugoslavia did in fact come from the base of the self-managed working class despite union leaders, and were not encouraged by them [21]. The same continues to this day with added problems: political heterogeneity and overall passivity due to non-participation in the public sphere and lack of coordination. There is a need for a political integration outside of the scope of branch unionizing. Also, there exists a great need to penetrate union organizations into the private sector. While it is not legally forbidden, this is in practice looked down upon if not outright prohibited by force and informal pressure. Membership in public sector working classes remains low and hence  any organization possibilities are loose. Remedies/short term: seek out active parts of different unions and attempt to work with them over their own issues. Sticking to a single union in situation of numerous union organizations with membership problems is counter-productive. Instead, map possibilities of political integration and cooperation within active sections. This takes years of work and is not at all a linear process. Private sector workers should be addressed by public education and given opportunity to meet with any active unions. Remedies/long term: A stable working group dedicated to this matter would increase the short-term goal of institutional change, since any possibility of re-activating the political potential of the unions (which they still have as a broad electoral base addressed by the parties) would have to be built from the ground up to counter the effects of labor legislation which will particularize struggles through increased worker competition. This should be done with careful coordination with different left-wing groups since there are different actors already struggling to catch the unions attention. Confusing and mutually exclusive policies should be mapped and avoided. Similar groups already exist in Croatia (Brid) and could be consulted.
  • Creating conditions for precarious workforce unionizing. First, one needs to look at precarious workforce composition:it must be emphasized that the precarious part of the laboring classes is in itself not a single group but comprises and will further comprise freelance workers, public sector interns and volunteers along with those precariously paid through the new labor law legislation including those employed by agencies for precarious work. Although they are currently supposedly growing in number, especially among the youth, there are little to no prospects of their organizing or unionizing. Hence, while this part of the working class has the most need for rights and social protection, it is by far the most overlooked and are hectically regulated in the Balkans. For example, while in Slovenia the “Zakon o gospodarskih družbah” recognizes self-employment, the Serbian government does not [22]. This reflects the unions which may or may not legally give membership to precarious or self-employed (freelance) workforce. In practice, most of the unions are based on public sector fully employed members and have little resources to do otherwise. Remedies/long term: demand recognition of self-employment with at least the same rights as those provided by the labor law. Then carry onto already established union working groups as those described in the previous solution with an attempt to unionize precarious labor as a whole (groups described here) including semi-employed workers. Given the great need for labor rights by precarious workers, any new political alternative would have to address this part of the working class which is growing in number and disproportionately political represented (or not at all). To do so by way of unionization goes directly against the branch organizational structure of the unions and one might say that in the years ahead overcoming the internal structure of the unions would necessarily have to be one of the urgent political tasks of any left today. There are no short/term options for this, as it requires institutional change of both legislation and union structure. If done, however, the results would yield novel political strength and possibly the return of working class political influence from below. The possibilities for this should be at least researched more in the future.

Short-term – ideological: 

  • Abandoning the tripartite form of dialogue and syndical education.The so-called tripartite dialogue was one of the great breaks that have narrowed the scope of union influence and passivized their activities in the post-Socialist period in the Balkans. It did so by focusing the union’s pressure on bureaucratic issues. This came in the form of the Social and Economic Council of the Republic of Serbia as a body comprising representatives of the Serbian Government, representative associations of employers and representative trade unions. It was first established in August 2001 between the Serbian Government, the Confederation of Autonomous Trade Unions of Serbia (CATUS), Trade Union Confederation “Nezavisnost” (TUC “Nezavisnost”), Association of Free and Independent Trade Unions and the Serbian Association of Employers (SAE), and was later codified by the Law on the Social and Economic Council of the Republic of Serbia in November 2004 giving it a legal framework for establishment and operation. The Council is made up of 18 members and in the current convocation the Government is represented by six, SAE by six, CATUS by four and TUC “Nezavisnost” by two members [23]. While it sidelined in practice in the years following the Labor Law of 2014, the tripartite idea still presents a great block for union members self-organizing. The belief that the unions are somehow part of the state and employer’s institutional matrix even when they are not receiving any benefits from them, is a major ideological issue in the unions. Here we do not mean beliefs, but schools, lectures and information exchange that is constantly going on within the unions and which could be traced if needed through the unions periodicals, journals and other literary or to an extent, theoretical production. This is one of the heritage from the eighties we mentioned earlier, due to traditional closeness of the unions to the state and party officials. Remedies/short term: political discussions and education with union members on the topics of the limits of the tripartite dialogue. Also, cooperating with union periodicals and literary production could be of use for circulating ideas. The goal should be to reach the lowest possible level of the base (in the sense of cooperating not only with official union representatives on upper levels of union structures but to establish contact with different sectors of their base). This should also be used to re-connect the branched division of the unions internally. Remedies/long term: Conceiving of alternative ways to address the state and employers outside of the Social and Economic Council such as through a formation of a pan-union representative body based on proportional participation and inclusion which would also sideline the discussions and quarrels over the representativeness of particular unions (which are also determined by the state and according to the Labor law).

Long-term institutional and ideological:

  • Re-defining the relationship between education and workforce composition.Activation of youth sections of the unions (e.g. the “Confederation of the Autonomous Unions of Vojvodina” which has cooperated already with left organizations such as “Gerusija” in the past) and engagement with the student population done via educational groups. These groups should be political in nature with the added significance of theoretical cooperation on critical issues such as dual education which is coordinated with the labor law, as described above. Institutionally, the dual-education-Labor-law axis needs to be reversed as they would eventually only augment their negative effects. Youth employment needs to be regulated by the Labor law, and the Labor law should be amended (below). Dual education should be opposed as an all-inclusive institutional matrix applied to the entire education as it will surely create semi-skilled unprotected workforce with no prospects for higher earnings. With no possibilities of social reproduction, this emerging class would fall back on state workfare or self-subsistence pauperizing the population even more. Dual education could, with the consent of its participants, be done where needed as part of secondary education practice, but the enabling law should be opposed. Also, should the law proceed, the Chamber of Commerce an Industry of Serbia, a non-governmental organization of employers’ representatives which already influenced the Labor law, would have a large say over Serbia’s  education structure, since it’s operation in the future system of education is guaranteed and codified by the Law on Dual Education [24]. This should be opposed as it de facto gives a singular non-state subject disproportionate amount of power over public education and even has monopolizing possibilities not suitable even for market oriented education. The existent remnants of student co-operatives (“Studentske zadruge”) should be addressed instead. They are charged with regulating student employment and could be re-activated and augmented with youth sections of local unions over common goals of student employment protection, should the unions prove capable of handling student membership more actively. This could provide stable inflow of candidates suitable to enter the student parliaments who are currently passive or have proven to be more aligned the the state and faculty administration that with the student body that they present. In this way, the future workforce could have a say in its social protection and politically present themselves autonomously, while also entering dialogue with employers as an organized body not susceptible to political or bureaucratic pressures. Local student movements which have sprung up in recent years should also be seek out and consulted. The mutually beneficial infrastructure could enforce direct-democratic tendencies and offer much needed education on the true state of affairs in the labor market outside of what is currently depicted to the students by the various employment education workshops traditionally active in the faculties and organized by the parliaments. In this way, an institutional network of future workforce members with levying points of putting political pressures on employers and state administration (including union youth and students) could easily be crafted as a result.
  • Re-regulating the social protection of labor rights and annulment of workfare. First and foremost, the Labor law should be amended. The unemployed precarious workforce, although counted by the statistical institutions mentioned here, is not recognized by the Labor law. Hence, the Labor law should be extended to regulate any form of labor, and not only employed labor as it is now. Furthermore, the definition of labor time should be deleted along with the notion of standby time in Article 50. Secondary work activities (stand-by, commuting, mailing at night, i.e. any labor being done during leisure time) should be re-defined as overwork and compensated appropriatelyArticle 179 which deals with subjective criminal charges should also be amended (its fifth point  pertaining to subjective interpretation has been deleted by the Constitutional Court which deemed in opposition to the Constitution, but the rest of it has however been left as it is) [25]: weaker and stronger employee offences should be distinguished to prevent immediate terminations for minimal breaches of the labor contract. Also, precarious labor should be minimized in institutions and sectors of the economy where it is not needed: the limit of short-term agreements should be reduced to 6 months (from 24 months currently foreseen by the Labor law, while the previous version foresaw 12 months). This should be done in order to offset the tendency to employ short-term labor in sectors (such as science and medicine) and institutions where precarious labor is not necessary or beneficial to their functioning. Also, the punishments for payment forfeit and other offences made by the employer should be increased so as to counter their occurrence which is regular in Serbian society due and is usually permitted despite labor standards. Also, one needs to counter the shift from welfare to workfare seen in mandatory working-off of social benefits once guaranteed by the state. Given the rising unemployment due to the sheer amount of workforce being layed-off during the two phases of privatization, the neoliberal post-Socialist states such as Serbia resorted to shifting welfare to workfare with mandatory laboring for welfare receivers and the aforementioned legislation of labor precarization. The two processes are two sides of the same coin. However, given that most of the budget is filled via a two-grade (8% and 16%) VAT-taxed consumption without taxing luxury goods, and given the sheer quantity of state subsidies for foreign investors on the level of magnitude of hundreds of millions €/year, it should be noted that any return to welfare will due much to relieve the pressure of the working classes while not significantly affecting the budget. For example, only in 2012 in Serbia there were 14.950 foreign-owned companies with additional 6848 companies co-owned by foreign capital with approximately 8 060 million € of investments [26], the biggest companies of these being Telenor, Gazprom Neft, Phillip Moriss, Delhaize, Fiat and VIP mobile. On the other hand, over one-third of all investments made were in fact subsidized: “Subsidies provided to foreign investors over the period from 2006-2016 amount to 439 million euros for a total of 304 signed contracts. The total value of those investments over the same period amounts to 1.6 billion euros.” [27] Since most of the foreign investments increased the budget deficit due to focusing largely on non-tradeable goods, it is a question whether the Serbian economy has profited at all from them. By investing in enterprises with a degree of product finalization (e.g. autocables and footware) which employ mostly precarious workforce which in practice works mostly overtime [28]. Thus, the governments abandonment of active domestic investment and industrial development policy could be said to be not only unnecessary but in fact counterproductive to its own proposed aims. Hence, contrary to such state of affairs, redirecting losing investments towards working class welfare would in fact save the budget rather then damage it. Welfare could both be re-legislated permanently and be re-introduced gradually in the form of temporary aid for professions most affected by the crisis such as laid off industrial workers or ex-privatized or bankrupt workers not undergoing social programs envisaged by laws regulating bankruptcy [29]. Thus, instead of a shift from welfare to workfare we propose a broad policy approach of redirecting state subsidies for foreign investors to welfare previously guaranteed by the Labor law on the minimum level required for worker’ reproduction (indexed in prices relating to consumer goods and the consumer basket rather then minimum wage). This could be coupled with raising the price of labor per hour to meet the real needs for workforce reproduction and consequentially return to raising the domestic aggregate demand. Currently the price of labor per hour is set at 130 RSD and could favorably be sat at least to 150 RSD [30].
  • Re-activation of self-managed infrastructure.Regarding the aforementioned laws on bankruptcy, these were used as a temporary mechanism for forced closure of formerly state socially owned enterprises. In 2014 a list of 188 domestic (mostly industrial) enterprises was compiled by the government Privatization Agency (which operated from 2001-2016). These enterprises were forced to bankrupt regardless of their market success due to dubious estimates by the Agency. Most of their skilled workforce was lost with them, including professional and highly-skilled workers with several decades of experience. Oftentimes, the social programs that covered their dismissal were used to close down the enterprises. An example is the Novi Sad-based “Neobus” bus production facility were it would have been more rational to cover the plant’s unsolicited debts created by a foreign owner rather then pay the much higher fee for social programs and abandon the plant and enterprise. Despite the odds, the latter was chosen on a political basis, and its once productive halls are now used as cold storage for “Matijević mesara”, another huge enterprise and meet refining industry [31]. However, some of the bankrupt industrial workers have offered resistance. From the 2014 list, we can take the example of “Petar Drapšin” still mill and former self-managed conglomerate where the remaining workers organized themselves into self-managed communities operating the bankrupt mill. Other factories such as the “Jugoremedija” chemical plant form Zrenjanin, went to become politically active. The famous “Jugoremedija” case predates the 2014-list of bankruptcies and is an example of a decade-long fight against state and private entrepreneurial attempts at closing down a profitable factory which gave novel ideological, political and organizational ways of struggling [32], also giving birth to the formerly mentioned left-wing organization know as the Left Summit of Serbia. In Bosnia, the best example are the “Dita” chemical factory workers in Tuzla whose operation continues to this day, albeit at 2% operational capacity due to horrific working conditions and damaged equipment. The workers from these plants fell within the precarious or unemployed and were discriminated against due to their physical age and working age because of the benefits they may receive if retired within a new employer’s enterprise (something which the new Labor law of 2014 also settled by arguing that it would be only the last years spent under the latest employer which would count for their benefits). Although some of these factories such as “Dita” are producing again, their prospects are unforeseeable: before re-investing again, the kick-starting liquidity needed to overhaul their structures and equipment damaged by the bankruptcy and privatization processes is scarcely available. In this sense, they are victims of vicious debt cycles enforced by the Balkan neoliberal austerity polity. However, it is no secret that factories may very well operate outside of private ownership and their existence is a vivid reminder of that. In spite of their attempts of resistance to economic pressures by the austerity polity, the political knowledge and experience of these collectives makes them significant and distinguished parts of the working class. While their efforts to restore self-management might appear limited, they should not be overlooked. Contrary to commanded privatization (the 8th “commandment” in Washington terms), they prove that ownership is of little to no relation to market efficiency. In this sense they fill a great “epistemological” gap in present day collective organization: the widely-known fact that most of the present day workers and public sector employees suffer individual pressure without significant unionized or collective defense. This reflects on the type of individualistic protests. It also reflects on the failed attempts at their bridging that have in turn made it easier for their own segregation from public life and from preserving social protection. The problem is that, regardless of their attempts at production restoration, the aforementioned examples (“Dita”, “Jugoremedija”, “Petar Drapšin”) were not connected, and helping them through individual charities did not help overcome any of their problems, but merely ameliorated them. In a nutshell, the individualistic resistance seen in the overabundance of non-connected worker’s protests rests on a failure to recognize one’s own suffering as part of a vast model such as those of privatization. The hope for ‘good privatization’ drove some successful industry collectives from one failed privatization to another (such as “Jugoremedija” and “Petad Drapšin”). Hence, while it is debatable to what extent can they be aided without full state support or at least without parliamentary pressure at the disposal to the Left, the ex-Yugoslav self-managed collectives can still be salvaged for both much needed knowledge transmission and archival material. As for the first, the surviving workers’ collectives are remnants from the shareholder-phase of privatization whereby workers could become owners of shares of their plant while keeping their self-managed collective organizational structure. They can be called back within the present setting in both unions and factories with unresolved ownership to overcome the fragmentation of this part of the working class and to narrow the generational gap between them. However, as stated, the body coordinating such efforts lacks and it could very well be adjacent to bodies of working groups mentioned earlier. Thus, rather then helping them through charity donations and such, their efforts should be expanded or replicated in conjunction with union aid and their youth/student sections.As for the second, each enterprise hold its own archival records of worker’s collectives evolution over time with decisions and economic statistical records. By combining the two, one can hope to re-open the discussion over alternative ownership schemes in the public sphere  and to create a counter-discourse to the mainstream privatization-narrative. Unlike in other economies, such discourses were once more than present and their reactivation is a task yet unaddressed. It is in this sense that the heritage of Yugoslav enterprises can be revitalized and revived rather than cast-off as a simple remnant of the past.


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[1] Numbered according to John Williamson who coined the term. Note that Williamson later criticized his own policies as a universal remedy for developing countries. However, it was precisely in this sense that they were implemented, as a given model rather than a flexible set of policies. See: Williamson, John (2004), The Washington Consensus as Policy Prescription for Development, Institute for International Economics, available at:

[2] We need only mention the Ordoliberal circles in Germany which still influence parts of the CDU (a perspective popularized by Foucualt in the Birth of Biopolitics, despite its focus on neoliberalism’s early XX century roots); the international Swiss based Mont-Pelerin Society (described by Philip Mirowski in his Never Let a Serious Crisis Go to Waste) and the aforementioned Washington Consensus – initially designed for developing countries in Latin America and then enforced in the European periphery.

[3] Boughton, M. James (2001), Silent Revolution: The International Monetary Fund 1979—1989, Washington: International Monetary Fund, p. 578.

[4] Such as the two waves of privatization: first one had to convert social property to state property and from then on such property would either be offered in shares to the workers (share-holders privatization) or sold to an investor (privatization proper). For this, see: Musić, Goran (2013), Serbia’s Working Class in Transition 1988-2013, Belgrade: Rosa Luxemburg Stiftung Southeast Europe. On the level of the state, there was relegation of former party powers to the levels of the Republics. For this, consult: Centrih, Lev (2014), The Road to Collapse: The Demise of the League of Communists of Yugoslavia, Belgrade: Rosa Luxemburg Stiftung Southeast Europe.

[5] For more, see: Woodward, Susan (1995) Socialist Unemployment: The Political Economy of Yugoslavia, 1945–1990,  Princeton: Princeton University Press.

[6] More on that see: Matković, Aleksandar (2015), “Čiji su naši dugovi? Evrointegracija i liberalna ideologija”, Novi Plamen 6 (1-3): 121-127, available at:

[7] This was done with the establishment of the Central Registry for Mandatory Social Welfare in 2010 which now governs labor statistics and is codified in the Labor Law (article 272a). It began influencing data collected by the Republic Statistical Fund in the years that followed (, causing public controversy over the issue of fictious rise in overall employment: There are grounds to believe that this was done in a desperate attempt to reach the EU’s goal of 75% employment benchmark by 2020, which was echoed repeatedly in Vučić’s recent presidential expose. See: Europe 2020: a European Strategy for Smart, Sustainable and Inclusive Growth, available at:, and Vučić’s expose available at:

[8] Bradaš, Sarita (2016), Statistika i dostojanstven rad: kritička analiza političkog tumačenja statistike rada, Beograd: Fondacija Centra za demokratiju, p. 21., available at

[9] This was done by the Employment and Social Reform Programme. For more info visit:

[10] Most of the employed are of middle level education (57%) and the least are of higher education (13%) which corresponds to the educational structure of unemployment according to the National Employment Service. Broadly speaking, there is no incongruence between the demand and the supply of skills and knowledge. The quality of the higher education provided to the 13% is another matter and should not be confused with the inconsistency between the overall structure of employment and unemployment. Bradaš, Sarita (2016), Statistika i dostojanstven rad: kritička analiza političkog tumačenja statistike rada, Beograd: Fondacija Centra za demokratiju, p. 7, available at

Za najveći broj oglašenih radnih mesta tražena je srednja stručna sprema (60%) pri čemu su se prijavljivali najviše kandidati čije je obrazovanje iznad srednjoškolskog (56%). p. 17.

[11] Articles quoted from the original text of the 2014 Labor Law (In Serbian) can be found here: All translation done by the author. For the missing article on forced contract termination, see: See Reljanović, Mario, Ružić, Bojana, Petrović, Aleksandra (2016), Analiza efekata primene zakona o radu, Beograd: Fondacija Centar za demokratiju, p. 49-50. (in Serbian), available at:

[12] Matković, Aleksandar (2014), Struggling Against Serbia’s Labour Law Part 2, available at:

[13] An overview made by the Confederation of Autonomous Unions of Vojvodina can be found here:

[14] Information published by the Radio-Television Network of Vojvodina (in Serbian):

[15] Full text of the draft can be found here: Announcement of Serbia’s Chamber of Commerce and Industry can be found here:

[16] Full text of the draft can be found here:


[18] For an analysis of how the local government conditioned foreign investments, see Radenković, Ivan (2016), Foreign Direct Investment in Serbia, Belgrade: Rosa Luxemburg Stiftung, available at:

[19] Boyer, Robert, Streeck, Wolfgang, Crouch, Colin, Amable, Bruno, Hall, Peter, Jackson, Gregory (2005), “Dialogue on ‘Institutional complementarity’ and political economy”, Socio-economic review 3, 359-382.

[20] Bob Jessop (2015), “Neo-Liberalism, Finance-Dominated Accumulation, and Permanent Austerity: a Cultural Political Economy Perspective”, in K. Farnsworth and Z.M. Irving (eds.), Social Policy in Times of Austerity: Global Economic Crisis and the New Politics of Welfare, Bristol: Policy Press, 87-112. ISBN: 978-1447319122

[21] On this, see: Lowinger, Jake (2011), Economic Reform and the “double movement” in Yugoslavia: An analysis of Labor unrest and ethno-nationalism in the 1980s, Charleston: UMI Dissertation Publishing.

[22] More on the Slovenian law:

[23] Quoted from the Council’s web page:

[24] “On the grounds of the initiative of the sectoral assembly or otherwise determined needs of the economy, the Serbian Chamber of Commerce and Industry drafts a proposal of the job’s description as part of the standard for qualification and sends it to the Ministry competent for the jobs pertaining to education and pedagogy.”, Article 5, Dual Education Law, page 3, trans. A. M.,original available at:


[26] Radenković, Ivan (2016), Foreign Direct Investment in Serbia, Belgrade: Rosa Luxemburg Stiftung, p. 33

[27] Op. cit, p. 74

[28]. Foreign direct investment is mostly channelled to production with low degrees of product finalization which grossly depends on precarious manual labor in the assembly of auto-cables, foot-ware, knitting of socks, etc. This not only leads to sub-employment, but also causes a short work life of those employed, , who are replaced after  exhaustion, poor health or inability to financially support itself due to low wages. Bradaš, Sarita (2016), Statistika i dostojanstven rad: kritička analiza političkog tumačenja statistike rada, Beograd: Fondacija Centra za demokratiju, p. 8, available at

[29] Matković, Aleksandar (2015), Stečaj u službi deindustrijalizacije i privatizacije, available at:


[31] Matković, Aleksandar (2015), Stečaj u službi deindustrijalizacije i privatizacije, available at:

[32] Such as presenting themselves both as workers (to mobilize pro-Socialist parts of society) and small shareholders (to mobilize pro-market organizations and pressure government officials). More on this in: Musić, Goran (2013), Serbia’s Working Class in Transition 1988-2013, Belgrade: Rosa Luxemburg Stiftung Southeast Europe.


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