About the ILO in Serbia

High level of inactivity and informality, with shortage of labour

Serbia continues to struggle with a relatively low labour force participation rate of 58 per cent (ILO, 2024) in 2022 and a high level of inactivity. The overall unemployment rate stands at 9 per cent in 2022 (ILO, 2024) and is particularly high among young people. 24 per cent of those aged 15-24 remain unemployed (ILO, 2024) and the share of youth neither in employment nor in education or training (NEETs) reaches 13 per cent (ILO, 2024).

Furthermore, informality continues to be high and stands at 19 per cent (ILO, 2024), the quality of employment requires substantive improvement and reforms to the occupational health and safety system need to be pursued. The long-standing labour legislation reform to align on International Labour Standards is relevant both for EU accession and for the advancement of social dialogue.

The key long term labour market challenge is a shortage of labour, already quite severe in some sectors. According to the Statistical Office of Serbia, the workforce further contracted by 51,400 workers in 2022 due to a quickly aging population and the emigration of the working age population. The impact of the war in Ukraine and the energy price increases were primarily felt through inflation of nearly 16 per cent at the end of 2022 and another 10 per cent at the end of 2023, which particularly affected the most vulnerable populations.

Although Serbia has made good process in establishing different social dialogue mechanisms, their effective functioning remains a challenge, partly because not all pre-conditions have been met. The Economic and Social Council was established in 2001 as the central institution of social dialogue, but its effectiveness has been hindered by poor relations among its members. The slow pace of drafting and adoption of key labour legislation relevant for social dialogue and collective bargaining (the Labour Law, Law on Economic and Social Council, Law on Strike) is an additional obstacle to a conducive environment for social dialogue.

ILO interventions in Serbia

The ILO has been providing technical assistance on employment creation, labour law reform, promotion of social dialogue and collective bargaining, and improved working conditions, including protection from unacceptable forms of work.

The last Decent Work Country Programme (DWCP) for 2019-2022 focused on promoting more and better jobs (new employment strategy, improved working conditions, enhanced business environment, minimum wage fixing) and improved labour market governance (improved social dialogue, alternative resolution of labour disputes). A new planning framework for continuing ILO’s support to Serbia is currently being drafted.

The main ILO interventions over the last 5 years covered the following areas of work:

• Child labour: In 2019 – 2023 the ILO has implemented a MAP Serbia project in partnership with the United Stated Department of Labour. The project produced the first credible figures on the presence of child labour in Serbia, as well as proposals for new legislation that would contribute to protection of children from exposure to child labour, and a set of trainings for various key stakeholders on how to recognize cases of child labour and rectify them.
• Due Diligence in Supply Chains in the automotive, electrical and textile industry: Since February 2023 the ILO is partnering with the German Organization for International Cooperation (GIZ) to provide training and awareness-raising of more than 300 workers and more than 40 compliance officers in target industries on the relevance of the new German legislation on Due Diligence and the importance of establishment of company-level grievance mechanisms. The project has also trained the Agency for Peaceful Settlement of Labour Disputes and the Office of the Commissioner for Equality Protection.
• Social dialogue: In March 2024 the ILO has commenced with implementation of a 3-year project in partnership with the European Commission to strengthen the functioning of the Economic and Social Council, as well as the regulatory, institutional, and promotional framework for collective bargaining and dispute resolution.

Text last updated in March 2024.