Member Article

The new Labour Law of the Federation of Bosnia and Herzegovina (the "Labour Law") which introduced changes to the term of fixed term employment contracts, employee benefits, collective bargaining agreements and contracts with company managers, was declared unconstitutional by the Constitutional Court of the FBiH on 23 February. The Labour law, which just came into force in the summer of 2015, was held to be invalid by the Federation's top court because the rules of procedure governing the legislative process of the House of Peoples of the Parliament of the Federation were not followed when the law was passed by this level of government. Specifically, the House of Peoples was given insufficient time to propose amendments or changes to the draft law, in light of pressure from the government to have the new law implemented quickly to meet certain targets as part of the EU Reform Agenda which Bosnia and Herzegovina is working towards. The Constitutional Court ruled that the Labour Law must be returned to the House of Peoples of FBiH for proper adoption according to the applicable rules of procedure. The Labour Law will not be valid, as of the date the ruling of Constitutional Court is published in the Official Gazette of FBiH which should take place in the coming weeks. This poses a difficult situation for employers who have already amended their employment rulebooks and contracts for compliance with the Labour Law. In order to be fully compliant, we would recommend that employers who have already made such changes to revoke any new employment rulebooks and agreements adopted under the new law and replace them with their old employment rulebooks and agreements, while employers who have not yet adopted new employment rulebooks and agreements should maintain existing ones until the Labour Law is properly adopted by the House of Peoples.