ILO Report Shows Serbia's Private Sector Poised for Growth in Collective Bargaining

The report emphasizes that collective agreements should not be seen as bureaucratic requirements but rather as strategic business tools.

A groundbreaking new report by the International Labour Organization (ILO) has revealed that Serbia’s private sector has substantial room to expand collective bargaining—an essential mechanism for improving working conditions, strengthening social dialogue, and enhancing business stability. Despite clear benefits, only 13 percent of private companies in Serbia currently operate under collective agreements.

What Is Collective Bargaining?

Collective bargaining is a structured negotiation process between employers and workers—typically represented by trade unions—to establish terms and conditions of employment that go beyond minimum legal standards. These agreements often address:

• Wages and bonuses

• Working hours and leave policies

• Health and safety standards

• Social benefits

• Training and skills development

• Mechanisms for dispute resolution

By formalizing expectations and responsibilities, collective bargaining contributes to healthier labour relations, safer workplaces, and more productive enterprises.

Why This Report Matters

The report, produced under the EU-funded project “Strengthening Social Dialogue in the Republic of Serbia,” represents the ILO’s first comprehensive review of collective bargaining in Serbia’s private sector. Until now, official registries have largely focused on public sector agreements, leaving policymakers, businesses, and unions with limited insight into private sector dynamics.

To address this gap, the ILO conducted an in-depth analysis of company practices, perceptions, and challenges, offering concrete recommendations to foster a more enabling environment for collective bargaining.

Key Findings at a Glance

• Only 13% of private companies have collective agreements, covering approximately 245,000 workers.

• The highest adoption rates are found in construction, transport, and manufacturing—sectors with more structured labour needs.

• Most agreements focus on issues already regulated by law, while wages, training, skills development, and career progression are far less frequently included.

• Sectoral bargaining remains extremely limited, with just 2% of companies expressing interest in cross-industry agreements.

• Companies with collective agreements report significant benefits, including:

  • Better communication and trust between employers and workers

  • Greater predictability and operational stability

  • Reduced conflict and fewer labour disputes

• Companies without agreements are generally neutral or unsure about the process—suggesting that the main obstacle is lack of awareness, not active resistance.

Why Businesses Should Care

The report emphasizes that collective agreements should not be seen as bureaucratic requirements but rather as strategic business tools. When well-designed, they improve workplace harmony, reduce turnover, enhance productivity, and strengthen competitiveness—especially in sectors facing skills shortages or high labour mobility.

In addition, collective bargaining reflects modern labour standards aligned with European Union practices, supporting Serbia’s broader economic and institutional reforms.

Recommendations for Strengthening Collective Bargaining

The ILO outlines several priorities for improving Serbia’s collective bargaining landscape:

• Capacity building for social partners: Training for trade unions, employer associations, and company HR departments to support effective negotiations.

• Incentives for employers: Tax breaks or financial support to encourage companies to adopt collective agreements.

• Improved legal and institutional frameworks: Clear protocols, updated registries, and simplified procedures to register and monitor agreements.

• Awareness campaigns: Promoting positive examples to demonstrate the tangible benefits for both workers and employers.

• Expansion of sectoral dialogue: Encouraging industry-wide negotiations to improve consistency across sectors.

Towards a Fairer, More Stable Labour Market

The ILO report illustrates a strong foundation from which Serbia can expand collective bargaining in the private sector. With greater awareness, institutional support, and stronger social dialogue, Serbia can advance toward a more predictable, equitable, and competitive labour market—benefiting workers, businesses, and the broader economy alike.