Vokshi & Lata contributes to International Employment Lawyer Guide to Restructuring a Cross-Border Workforce

February 12, 2025

Prepared by Agnesa Azemi Ademi and Urim Vokshi for International Employment Lawye r, this guide outlines the protections and legal safeguards for restructuring a cross-border workforce in Kosovo.

1. Is there a concept of redundancy – based on a shortage of work or other economic reasons – as a justified reason to dismiss employees in your jurisdiction? If so, how is it defined?

In Kosovar law, redundancy, while not specially defined, is acknowledged as valid grounds for dismissing employees, typically justified by economic, technical, or organisational reasons.

Redundancy situations can arise in cases such as:

systematisation of employees in working posts – this refers to reorganising or restructuring job positions within a company, potentially eliminating certain roles;

individual dismissal – redundancy may be applied in cases where specific positions are no longer necessary, or an employee’s role is deemed redundant due to changes in business operations; and

collective dismissals – this occurs when an employer finds it impractical to transfer an employee to another job, to re-train them for their current position or another role within the organisation.

2. In brief, what is the required process for making someone redundant?

The process involves the following steps:

reorganisation decision – this decision is issued by the employer’s governing body and typically includes the rationale for reorganisation, the list of the positions that will be impacted by the reorganisation, the exact number of positions that will be eliminated, and the timeline of when these eliminations will occur;

employee resettlement evaluation – the employer evaluates the possibility of resettlement for the impacted employees to other job positions that match their qualifications and skills; and

dismissal if resettlement is not possible – if there is no possibility of resettlement of the employees, they are dismissed.

notification of dismissal – Employees are notified of their dismissal in accordance with the legal notice period.

3. Does this process change where there is a “collective redundancy”? If so, what is the employee number threshold that triggers a collective redundancy?

The process for redundancy changes when a collective dismissal happens. A collective dismissal occurs when at least 10% of the workforce, but no fewer than 20 employees, are dismissed within a six-month period. Once this threshold is met, the provisions for collective dismissal come into effect.

4. Do employers need to consult with unions or employee representatives at any stage of the redundancy process? If there is a requirement to consult, does agreement need to be reached with the union/employee representatives at the end of the consultation?

It is not necessary and there is no legal obligation to consult with unions or employee representatives.

However, employers can seek advice from the Labour Inspectorate regarding labour laws and worker protection during reorganisation or restructuring processes. This consultation can help ensure compliance with relevant regulations and safeguard employee rights.

Also, the law mentions that before introducing the organisational changes, the employer must notify its employees and, where applicable, the employees’ trade union one month in advance (in writing) of the changes planned and their implications.

5. If agreement is not reached, can the restructure be delayed or prevented? If so, by whom?

Local law has not set any requirement for an agreement to be reached.

However, if an employee is dismissed with the justification of a company reorganisation, but the reorganisation does not actually occur, it could lead to legal complications. The employee might seek to challenge the dismissal, potentially requesting reinstatement or compensation on the grounds that the dismissal was unjustified or based on false pretences.

6. What does any required consultation process involve (i.e. when should it commence, how long should it last, what needs to be covered)? If an employer fails to comply with its consultation obligations, what remedies are available?

There is no requirement from the law for a consultation process. As mentioned in Question 4, the employer can consult with the Labour Inspectorate regarding labour laws and worker protection during reorganisation or restructuring processes. However, the law does not mandate the employer to provide a consultation process.

7. Do employers need to present an economic business rationale as part of the consultation with unions/employee representatives? If so, can this be challenged and how would such a challenge normally be made?

Employers do not need to present an economic business rationale, since there is no obligation to consult with the union regarding the reorganisation plan. So, in this respect, there are no challenges.

8. Is there a requirement or is it best practice to consult employees individually (whether or not the employer is also legally required to collectively consult employees)?

The law does not require employers to consult employees individually. However, from good practice, it is good to meet with the employees and be transparent by discussing the process and the criteria that will apply.

9. Are there rules on the selection of individual employees for redundancy?

Employers generally have broad discretion in selecting employees for redundancy, but this discretion must be exercised fairly and without discrimination.

As a matter of good practice, during the reorganisation of employees due to economic, technological, or structural redundancy, employers typically follow certain criteria when deciding who to retain within the same category. These criteria include:

results at work – employees who have better results at work have priority for job retention;

academic qualification – employees who have qualifications and higher professional qualifications for work;

long experience; and

employees with the longest working experience at that employer have priority for maintaining the workplace.

These criteria were foreseen in the general collective agreement – which is no longer in force, jointly proposed by workers’ unions and employers for use in such situations.

Also, to prevent any discrimination claims, it’s good practice to implement a testing procedure where employees must pass specific assessments to continue their employment. This approach helps ensure that all workers are evaluated based on relevant skills and performance criteria.

10. Are there any specific categories of employees who an employer is prohibited from making redundant?

An employer cannot terminate the contract or change the workplace of employees who are pregnant, on maternity leave, or absent due to special childcare responsibilities, except in the case of collective dismissals.

11. Are there categories of employees with enhanced protection (e.g., union officials, employees on sick leave or maternity/parental leave, etc)?

Yes. Trade union representatives have enhanced protection. For trade union activities, trade union representatives, without the consent of the trade union, the employer cannot terminate the employment contract, assign them to another workplace, decrease the position of the workplace, initiate disciplinary procedures, or reduce salary.

12. What payments are employees entitled to when made redundant? Do these payments need to be made within a specified period? Are there any other requirements, such as giving contractual notice, payments into a central fund, etc.

Employees who have been continuously employed for a certain period are entitled to redundancy pay, which must be provided during the dismissal process, either with the final paycheck or within a few weeks afterward.

Additionally, the employer must provide notice of the termination due to redundancy. This notice should clearly state the termination date and confirm that the employee will receive all payments due upon termination, including salary, bonuses, vacation pay, overtime hours, redundancy pay, and other benefits.

In addition, if the conditions for collective dismissal are met, the law has foreseen other compensations, which are mentioned in Question 13

13. If employees are entitled to redundancy/severance payments, are there eligibility criteria and how is the payment calculated?

In collective dismissal, the severance payment shall be paid to the employees with an indefinite period contract on the date of termination at the following scale:

from two to four years of service, one month salary;
from five to nine years of service, two months salary;
from 10 to 19 years of service, three months salary;
from 20 to 29 years of service, six months salary; and
from 30 years of service or more, seven months salary.

These criteria apply only in case of collective dismissals.

14. Do employers need to notify local/regional/national government and/or regulators before making redundancies? If so, by when and what information needs to be provided?

Employers are required to notify the Employment Office in writing when collectively dismissing employees. This enables the Employment Office to assist the affected individuals in finding new employment opportunities.

Ideally, this notification should be made at the time of contract termination and include a list of the employees’ names, along with their qualifications and training.

15. Is there any obligation on employers to consider alternatives to redundancy, including suitable alternative employment?

Before collectively dismissing, the employer must first consider the possibility of transferring the employees to a job position that matches their qualifications and professional preparation.

Other measures, to alleviate the consequences of collective dismissal may include:

limiting or stopping the hiring of new employees;
implementing internal reordering of employees;
limiting overtime working hours;
reducing working hours; and
offering professional retraining.

16. Do employers need to notify local/regional/national government and/or regulators after making redundancies, e.g. immigration department, labour department, pension authority, inland revenue, social security department? If so, by when and what information needs to be provided?

After the redundancy is finished there is no need to notify any local authority.

We mention in Question 14 that the employer must notify the Employment Office when collectively dismissing employees, but the law has not set any obligations for the employer to notify any authority after making the redundancy.

17. If an employee is not satisfied with the decision to make them redundant, do they have any potential claims against the employer? If so, what are they and in what forum should they be brought, e.g. tribunal, arbitration, court? Could a union or employee representative bring a claim on behalf of an employee/employees and if so, what claim/s and where should they be brought?

Employees can be unsatisfied with the decision that makes them redundant, for example, they might believe they are discriminated against or that the decision is unjust.

If an employee is dissatisfied with a decision that makes them redundant, they can take legal action against the employer. Initially, they can submit a complaint to their employer or a complaints commission (if such a body exists within the organisation).

If the outcome is still unsatisfactory, the employee has the option to sue the employer, seeking either the annulment of the redundancy decision, and reinstatement, or compensation.

Additionally, the employee can issue a complaint to the Labour Inspectorate, which has the authority to inspect the employer’s actions. If the Inspectorate finds the redundancy decision to be illegal, it can impose fines on the employer.

18. Is it common to use settlement agreements when making employees redundant?

Yes, settlement agreements are a common way of terminating employment agreements.

19. In your experience, how long does it normally take to complete an individual or collective redundancy process?

The duration of dismissal processes can vary depending on whether the dismissal is individual or collective. For individual dismissals, the process generally takes between 60–120 days, while collective dismissals typically conclude within 120–150 days.

20. Are there any limitations on operating a business for a period following a redundancy, like a prohibition on hiring or priority for re-hire being given to previous employees?

Yes, the employer cannot hire other people within a period of one year from the termination of the employment contract. If the employer has a job offer, he must first offer to hire the employees with the same qualifications or training, whose contracts have been terminated.

21. Is employee consultation or consent required for major transactions (such as business transfer, mergers, acquisitions, disposals or joint ventures)?

No, there is no legal obligation for the employer to consult with the employees for major transactions.

22. What are the remedies that are available if an employer fails to comply with its consultation duties? Can employees take action to prevent any proposals going ahead?

Not applicable.

23. Is there any statutory protection of employees on a business transfer? Are employees automatically transferred with the business? Are employees protected against dismissal (before or after the transfer of employment)?

In the event of a status change, specifically a change of employer, the future employer, in accordance with the Collective Agreement and employment contracts, assumes all obligations and responsibilities from the employment relationship that are applicable on the day of the employer change.

The previous employer is obliged to inform all employees in writing about the transfer of obligations and responsibilities to the future employer.

If the employee refuses to transfer the employment contract or does not declare within five days from the day of receiving this notification, the previous employer may terminate the employment contract of the employee.

24. What is the procedure for a transfer of employment (upon a business transfer or within group companies)?

When transferring employment due to a business transfer or within group companies, the employer must first notify the affected employees in writing, providing details such as the effective date of the transfer, the reasons for it, and any changes in employment terms. Following this, it is important to review and update the employment contracts to reflect the new employer while ensuring that employee benefits and entitlements are preserved.

25. Are there any statutory rules on harmonising the transferring employees’ terms of employment with the existing employees’ terms of employment?

No, the local law has not foreseen such obligations. However, the new contracts cannot be less favourable than the previous contracts. The new contracts must maintain at least the same level of protection and benefits as those established in the previous contracts.

26. Can an employer reduce the hours, pay and/or benefits of an employee?

No, changes to an employment agreement require mutual consent from both the employer and the employee. Once both parties agree to the changes, they should be documented in a revised employment agreement and signed by both parties to ensure that the modifications are legally binding.

27. Can an employer rely on an express contractual provision to vary an employment term?

Any changes to the terms of an employment agreement require the mutual consent of both the employer and the employee. This means that modifications such as salary adjustments, job duties, or workplace location cannot be unilaterally imposed by one party. Both parties must agree to any changes for them to be legally valid and enforceable.

But when provided by contract and within limitations, the employer may cancel certain benefits or terms with future effect, or unilaterally alter terms, such as work bonuses and working hours.

28. Can an employment term be varied by implied conduct?

As a general rule, no, but in the event that the fixed term employment contract continues without interruption for more than 10 years, according to the law, it becomes an indefinite contract.

29. If agreement is required to vary an employment term, what are the company’s options if employees refuse to agree to the proposed change?

As a general rule, the contract can be changed only by mutual agreement, but if the company proves that it has strong reasons to change the contract and the employee refuses it, it can be a basis for terminating the contract. For example, the risk of bankruptcy.

30. What are the potential legal consequences if an employer varies an employment term unilaterally?

If an employer unilaterally alters the employment agreement, the modified agreement will not be valid. As outlined in Question 29, for an agreement to be binding, it must be mutually agreed upon by both parties. Without the consent of both parties, the agreement is considered invalid and has no legal effect.

Suppose the employer proceeds with implementing the unilaterally altered agreement. In that case, the employee has the right to seek legal remedies by addressing the competent authorities to request the cancellation of the agreement.

Areas to Watch

The new labour law is currently under development. However, the draft proposal has not yet been published. The exact timeline for when the law will be finalised and enacted remains uncertain since the draft labour law has been withdrawn by the government from the 2024 legislative agenda. The new law must take into account the new circumstances created especially after Covid 19 in order to regulate remote work as well as provide more rights for trade union organisations.

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