Why Every Employer Should Have a Rulebook on Work (Employee Handbook)

When asked whether a Rulebook on Work (Employee Handbook) is a mandatory general act for an employer, the answer is very short: it is not mandatory for anyone.

However, it is a highly useful document for every employer — and we will explain why.

Domestic legislation prescribes mandatory internal rulebooks for employers who meet certain criteria (e.g. more than 10 employees):

• Rulebook on Job Classification;

• Rulebook on Internal Whistleblowing Procedure;

• Rulebook on Rules of Conduct for Employers and Employees Regarding Prevention and Protection from Workplace Harassment (a general act applicable in the Republic of Serbia, which employers must deliver to employees)…

In addition to these, employers often introduce rulebooks that regulations do not explicitly require but which are important for practical reasons:

• Bonus Policy Rulebook;

• Company Vehicle Policy;

• Rulebook on Work as the most significant of all.

What Is a Rulebook on Work?

A Rulebook on Work is a general internal act of the employer that regulates in more detail the rights, obligations, and responsibilities of employees and the employer, as well as practical rules of work organization.

Already burdened with administrative obligations, employers often see the Rulebook on Work as yet another obligation.

In a strictly formal sense, the Labour Law does not prescribe a general obligation for every employer to adopt one. At the same time, anyone dealing with employment relationships will add: it is necessary.

Although it is not a mandatory “document required by inspection,” its value lies in reducing improvisation and increasing predictability. It regulates all those situations that the Labour Law has left to the employer to define; employees know they will be treated equally in similar circumstances, and the employer has a clear framework to rely on in each individual situation.

It is important to emphasize that the need for a rulebook does not depend on the size of the company. It is useful even if you have around ten employees (especially with shift work, field work, remote work, or seasonal regimes), and even more so when you have 50 or 150 employees (where consistent treatment is almost impossible without a rulebook).

Why the Rulebook on Work Is Necessary for Employers

The Labour Law, through its mandatory provisions, sets guidelines for employment relationships in their essential elements. In certain aspects, the Law leaves it to the employer to regulate employment relationships in more detail through an internal act — the Rulebook on Work — for example: use of annual leave, number of annual leave days above the statutory minimum, shifts, bonuses, etc. If the employer does not have a Rulebook on Work, all of this must be regulated in each individual employment contract.

Typical areas where the rulebook gives the employer “more room”:

• Breaches of Work Duties and Work Discipline

The Law lists typical examples of breaches of work duties and discipline but allows the employer to prescribe additional breaches through the Rulebook, adapted to its activity and specific operations. This is particularly important for conduct that is often “assumed,” but without explicit listing may be difficult to defend in proceedings (e.g. using a company car for private purposes, violating safety rules, failure to comply with sales/service procedures, non-compliance with dress code or communication rules in contact with clients, etc.).

• Additional Grounds for Annexing the Employment Contract

The Law prescribes certain grounds for amending agreed working conditions (annex). However, it allows changes for other reasons provided in the Rulebook on Work. If the employer does not have a Rulebook, this broader spectrum of reasons for modifying employment terms does not exist.

• Termination by the Employee

An employee may terminate the contract with notice, which by law cannot be shorter than 15 days. The Rulebook may provide for a longer notice period, but not longer than 30 days. This is important for positions that are difficult to replace or where handover is critical.

• Determining Damage Caused by an Employee

When an employee causes damage at work, the Law provides that the existence of damage, its amount, circumstances, liability, and method of compensation shall be determined in accordance with the Rulebook on Work or the employment contract. If this is not regulated by either, the Law does not provide sufficient guidance on how compensation should actually be realized.

• Work Outside the Employer’s Premises

The Labour Law explicitly allows work from home and hybrid work models, but without detailed regulation of this form of organization. Costs, equipment, employee availability, performance monitoring, occupational safety and health in home conditions, protection of confidential data, communication rules — all of this is regulated by the Rulebook on Work. Therefore, it is important to have one.

How the Rulebook on Work Is Adopted and Amended

An employment contract is a bilateral act concluded by the employer and the employee and cannot be changed unilaterally. It is amended by an annex, with the consent of both parties.

The Rulebook on Work is a general act of the employer and is amended by a unilateral decision of the employer, with the obligation to publish it and make it available to employees (notice board, electronic notice board, individual delivery). A new Rulebook or amendments enter into force on the eighth day from publication on the employer’s notice board.

The Rulebook as Prevention of Labour Disputes

If an employer does not have a Rulebook on Work, every hypothetical situation that may arise in employment (e.g. a form of breach of discipline) must either be regulated by contract or left unregulated.

Regulating everything by contract is impractical because contracts become unnecessarily bulky, or employees end up with different provisions for the same legal situation.

The Rulebook allows identical issues to be regulated in the same way for all employees in the same situation. This is important due to the prohibition of discrimination and the obligation of equal treatment.

Particularly sensitive areas include expense reimbursements (transportation, business travel, meals, holiday allowance), working hours, leave procedures, disciplinary measures — and labour disputes are frequent. An employer who does not regulate relations uniformly bears greater risk.

Greater Rights for Employees

The Rulebook may provide rights above the statutory minimum: additional leave days, higher percentage of salary compensation during sick leave, jubilee awards, solidarity assistance, more favorable severance pay, health insurance, other benefits.

It is important to note that the Rulebook may not provide lesser rights than those prescribed by law, but it may provide greater rights.

What can be included in the Rulebook on Work

Most commonly, the Rulebook regulates:

• working hours, schedules, shifts, breaks, and records;

• work duties and breaches (exhaustively listed);

• work discipline and code of conduct;

• leave and absences (criteria and procedure);

• costs and reimbursements (transport, travel orders, per diems, holiday allowance);

• use of equipment and protection of confidential data;

• remote work;

• prohibition of discrimination and protection of dignity;

• basic internal communication rules.

Where employers most often make mistakes

1. Copying Someone Else’s Rulebook

The Rulebook has a relatively informal structure, and its essential value lies in its content. Copying another employer’s rulebook may do more harm than good, as it is almost impossible to find two employers who organize processes, activities, and relationships in an identical way.

2. Including Only Employees’ Obligations

The value of the Rulebook lies in defining and clarifying relationships within the company, meaning it ensures legal certainty not only for the company but also for employees.

3. Unclear Provisions

The essence of the Rulebook is to define rules in as much detail as possible, including concrete examples, in order to avoid different interpretations in practice and enable employees to clearly understand what is allowed and what constitutes a breach of discipline. It is also a strong preventive mechanism against potential labour disputes.

4. Introducing Rules Contrary to the Law

The Rulebook, like the employment contract, must be fully compliant with the Labour Law. Provisions contrary to the Law are null and void. 

Frequently asked questions

Do I need a rulebook if I have 3 employees?
The Law does not prescribe a minimum number, but a rulebook becomes practical as soon as you have several employees or a specific work regime.

Must employees sign that they are informed?
A signature is not a condition for the validity of the rulebook, but it is advisable to have proof that employees have been informed.

What if the rulebook and contract differ?
If there is a discrepancy, the provision more favorable to the employee shall apply.

How often is the rulebook amended?
It is amended when work organization, benefits, work regimes change, or when the document needs to be harmonized with regulations and practice.

Law Firm Petrović Mojsić & Partners