This article was originally published in the European Employment Law Update published by Shepherd and Wedderburn LLP.
Application of Industry Collective Bargaining Agreements
Labour and employment matters in Bosnia & Herzegovina ("BiH") are governed by the Labour Law of the Federation of BiH ("FBiH"), the Labour Law of the Republic of Srpska ("RS") and the General Collective Bargaining Agreements of FBiH and RS ("CBAs"). Depending on the industry and number of employees, specific collective bargaining agreements ("Industry CBA") may also be applicable.
In general, Industry CBAs are negotiated between representatives of the Government, and employees and employers who work within a specific industry group. These agreements usually provide for greater benefits to employees (in terms of different forms of employment compensation, durations of paid leave, annual leave, etc.) as compared with the applicable labour laws and CBAs.
These opinions have caused considerable confusion in practice due to their broad scope. Although many employers disregard compliance with such agreements in practice, the first instance courts and relevant inspection authorities have required employers in certain cases to comply with their obligations under these Industry CBAs despite not being signatories to these agreements.
Even Industry CBAs that were applicable only to public sector employees were considered to apply to private sector employees on the basis of these ministerial opinions. However, the position was clarified recently by the Supreme Court of FBiH which held that Industry CBAs that apply to the employees of FBiH public companies do not apply to private companies.
Although this decision of the Supreme Court of FBiH represents some progress in addressing the ambiguity in the application of Industry CBA's, it is hoped that the competent institutions of both RS and FBiH will do more to clarify the applicability of Industry CBAs, particularly with regard to employers who have not signed such agreements. Until then, all employers in BiH will need to consider carefully whether to comply with the relevant Industry CBAs in order to avoid possible fines and labour disputes.