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How will the employment of foreigners affect Serbia?

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Is the labor market in Serbia being liberalized in order to meet investors or domestic employers? Will only the missing workforce be imported, or will employers, especially foreign ones, be able to replace more expensive domestic, cheaper labor from Asia? Will the easier employment of foreigners lower wages in Serbia?

These are some of the questions raised by trade unions in the debate surrounding the adoption of the Law on the Employment of Foreigners. The working group at the Social and Economic Council gave a positive opinion on the proposal, although the unions claim that they did not attend the discussions.

As Slađana Kiković from the UGS Nezavisnost trade union explains, the next step is to prepare a proposal for the Government, and then it goes further to the Assembly. She points out that this law completely liberalizes the employment of foreigners in Serbia, especially through the Open Balkans initiative. She also claims that the proposed legal solution is not in accordance with the Labor Law.

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“Those people should have all the rights from the Labor Law, which means that if they are employed for an indefinite period, there is no termination clause.” And they have a limit of three years during which they receive a single work permit,” she notes.

In addition, trade unionists point out that although unemployment is 8.9 percent, it does not mean that there are no unemployed people in Serbia.

No testing with the National Employment Service

In addition, for occupations that are classified as deficient, obtaining a license will be automated and without testing at the National Employment Service.

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“The NES has an obligation to see if there are unemployed citizens of ours in occupations.” If there are none or they will not accept the job, a permit for the arrival of a foreigner is granted. They have only one condition, which is that the employer who wants to hire a foreigner has not fired anyone in the previous 90 days, and this is taken from the Labor Law.

And the NES has introduced interregional cooperation, so if an employer from Subotica needs a worker and there is none at the office in that region, the NES checks with all branches. And let’s say he finds someone in Vranje, offers him a job in Subotica. If he doesn’t accept it, the employer can get permission to import the worker,” explains Kiković.

“This is complete liberalization and introduction of flexibility to the labor market.” Where there are no collective agreements, but the salary is agreed by the employment contract, wages and salaries will be deducted. Where there are collective agreements, when they expire, the question is whether the unions will have the strength to conclude them again with the employers”, assesses Kiković, adding that the wages of workers in Serbia will not immediately decrease with the arrival of foreign labor. She also points out that Serbia could become a destination for workers from Asian countries, since ours will go to Western Europe.

Nebojša Atanacković, honorary president of the Union of Serbian Employers, believes that Croatia is in trouble, because when foreigners get a work permit, nothing will prevent them from going to another EU country. When they come to us, they can’t go any further.

He also points out that due to the lack of labor in Serbia, employers were in a problem because there is no one to work, and those who are there have to pay significantly more. “Employers support the import of labor, and it is expected that this will reduce labor costs a little.” In order to improve the position of employers and give them the opportunity to employ people, it is necessary to ensure the arrival of the workforce”, he assesses, adding that UPS asks the government to provide all conditions for these workers, even for local ones, so that there is no unfair competition.

Commenting on the Open Balkans, he evaluates it as a positive initiative and that it is better to bring dates from Albania than from distant countries such as Bangladesh, because they are much closer culturally. “There are no workers, and the arrival of people is a necessity.” “It is better for the state to solve it than to leave it unresolved,” he concludes. Our interlocutor points out that there is a shortage of almost all workers. “Especially qualified workers are lacking, but when we look at the numbers, we need more unqualified workers for jobs in construction or agriculture, for example,” he notes.

Will domestic companies benefit from it?

Atanacković agrees that facilitating the arrival of workers will help meet foreign investors, but also that domestic companies will benefit from it. Where the interests of domestic employers do not agree with foreign ones is that, as Atanacković claims, in dual education they are now training future workers for some operations in factories, instead of teaching them a trade. “We are asking for a law on craftsmanship to be passed,” he says.

Jelena Žarković, a professor at the Faculty of Economics in Belgrade, assesses that the experiences of European countries indicate that the arrival of foreign workers only affects the price of labor in the short term, but that it does not affect it in the medium and long term.

“Earnings could drop if they were to compete with incoming workers for the same jobs.” But they mostly come to fill the vacancies. When we have an insufficient supply of labor, then their arrival will not have a bad effect on wages,” she notes, adding that everything depends on how many will come. “I think they come because there is no one to work here. If there were local people to hire, there would be no need to import labor,” she concludes.

Since the beginning of the year, 11,717 work permits have been issued

However, the case of Aerdor catering, which fired 40 workers who were not regularly paid salaries and contributions, and when they revolted, hired 65 foreigners in their place, indicates that the domestic could easily be replaced by cheaper foreign labor.

In the first three months of this year, Serbia issued 11,717 work permits to foreigners, and last year a total of 35,168, according to data from the National Employment Service. Most work permits were issued to citizens of China, Russia, Turkey, India, Cuba, Macedonia, Ukraine and Nepal.

From February 24 last year, when the military intervention in Ukraine began, to April 6 this year, 12,593 permits were issued to Russian nationals, while in the same period, 568 Ukrainian citizens received work permits.


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