Statute of Limitations on Employees’ Claims for the Payment of Contributions: A Shift in Legal Practice!
For many years, judicial practice in the Republic of Serbia maintained the position that employees’ claims related to social security contributions were not subject to the statute of limitations. This interpretation was based on Article 114e of the Law on Tax Procedure and Tax Administration (“LTPTA”), which provides that the rules on statute of limitations do not apply to mandatory pension and disability insurance contributions, nor to mandatory health insurance contributions.
Courts emphasized that the payment of such contributions constitutes a constitutional obligation of the employer. Therefore, allowing these claims to become time-barred would enable employers to evade their constitutionally imposed duties, thereby undermining employees’ constitutionally guaranteed rights as insured persons.
New Judicial Practice
However, the Constitutional Court, in Decision Už-11435/2020 issued in 2023, and subsequently the Supreme Court of Cassation, in Decision Rev1 16/2023 dated 4 April 2024, adopted a different legal interpretation. These decisions clarified that Article 114e of the LTPTA does not apply to employees’ claims for contributions, as such claims are considered part of wages, i.e., claims arising from the employment relationship.
Accordingly, the courts concluded that these claims are subject to the limitation periods prescribed by the Labour Law. Specifically, under Article 196 of the Labour Law, an employee’s right to claim such amounts is subject to a statute of limitations of three years from the date the obligation became due.
Furthermore, the Constitutional Court emphasized that applying the provisions of the LTPTA to the contractual (obligational) relationship between the employer and employee would constitute an arbitrary application of the law and a violation of the employer’s right to a fair trial. The LTPTA, by its nature, governs only the relationship between the tax authority and the taxpayer, not that between the employee and the employer.
Considering that, as stated, the LTPTA regulates the relationship between the tax authority and the taxpayer, the Tax Administration, as the ultimate creditor of public revenues, retains the right to claim unpaid contributions from employers, regardless of the passage of time. However, it remains unclear whether, and in what manner, the tax control procedure will be initiated—i.e., whether employees’ reports or complaints may serve as a sufficient or necessary trigger under the provisions of the LTPTA.
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