About the ILO in Montenegro

Since gaining independence in 2006 and becoming an ILO member state the same year, the country ratified 76 International Labour Standards, including all ten Fundamental Conventions.

Persistent structural labour market challenges

Montenegro has achieved some positive economic results. After a sharp drop of GDP in 2020 caused by the Covid-19 pandemic, the country saw a strong rebound in 2021 and 2022. The 'Europe Now' fiscal reform programme supported the post-pandemic recovery, and external imbalances decreased due to a strong recovery of the tourism industry, which is of crucial importance for the Adriatic country.

The per capita income is the highest among the six Western Balkan economies, but the convergence with the EU needs to be accelerated. While per capita income was only 41 per cent of the average EU income in 2010, it increased to 50 per cent in 2019, before dropping to 45 per cent in 2020 due to the Covid-19 pandemic and partially recovering to 48 per cent in 2021 (Eurostat, 2023). In 2021, almost 40 per cent of full-time equivalent jobs paid wages below the new minimum wage set by the “Europe Now” reform. The new statutory minimum wage lifted roughly 35 per cent of jobs to the new minimum wage.

The Montenegrin labour market is still facing a range of structural challenges. While the employment rate has returned to pre-pandemic levels, standing at nearly 56 per cent in 2023 (Monstat, 2024), it continues to lag well behind the EU average of 75 per cent during the same time (Eurostat, 2023). The country was also confronted with an unemployment rate of more than 13 per cent in 2023 (Monstat, 2024) that severely affects the youth. Montenegro's unemployment rate remains structural, as even robust economic growth since 2005 has failed to reduce the rate below 15 per cent.

These systemic issues result in high youth unemployment (37% for youth 15-24 in 2021, ILOSTAT), high incidence of NEETs (19% in 2021, ILOSTAT) and highly gendered career choices (e.g. only 20% of ITC graduates are women and only 17% of women hold tech jobs).

Social dialogue at the national tripartite level takes place through the Social Council, established by the Constitution. Despite the lack of consistent social dialogue, the tripartite actors were able to conclude a new General Collective Agreement at the end of 2022, which includes important provisions concerning wages and limits on working hours.

ILO Interventions in Montenegro

The main framework for the delivery of ILO support to Montenegro has been the Decent Work Country Programme 2019 to 2021. ILO and partners in Montenegro are currently working on a new DWCP for 2024-2027.

Recent ILO support focused on:

• Providing better access to public employment services for vulnerable groups, such as persons with disabilities, long term unemployed or youth;
• Developing a framework of labour laws aligned with international labour standards. The new Labor Code adopted by the Parliament in 2019 is an example of ILO support to EU alignment.
• Strengthening the educational system in Montenegro by facilitating digital transformation of education in disadvantaged communities,
• Measuring the gender pay gap and recommending policy responses;
• Modernizing labour market administration through digitalization;
• Designing a Youth Guarantee Scheme to decrease NEETs;
• Improving safety at work by strengthening labour inspectorates;
• Supporting the Social Council;  
• Promoting alternative dispute resolution for labour conflicts, and
• Supporting Employers and Workers’ organizations in improving advocacy and service delivery to members.

Last updated March 2024.