The Ministry of Labor, Employment and Social Dialogue has confirmed to Pobjeda that it has initiated a process to amend the Law on the Labor Fund, aimed at addressing the issue of unpaid pension and disability insurance contributions for employees whose employers no longer exist. The formation of a working group, which will include representatives from the Ministry, the Labor Fund, the Union of Employers, the Union of Free Trade Unions and the Trade Union Confederation of Montenegro, marks an important step toward strengthening social justice and state responsibility.
These amendments are intended to enable workers who meet the legal requirements for retirement, but have been deprived of this basic right due to unpaid contributions by their employers, to receive their pensions. It is expected that the expanded powers of the Labor Fund will bring greater security and sustainability to the system, while also addressing the harmful consequences that have affected hundreds of Montenegrin citizens for years. The Ministry of Labor has stated that it is too early to estimate the number of affected former workers or the amount of funds required for disbursement.
The Union of Free Trade Unions (USSCG) told Pobjeda that the Ministry of Labor responded to their initiative and plans to work on a draft law to amend the Law on the Labor Fund.
In their initiative, the USSCG called for expanding the powers of the Labor Fund to allow for the payment of pension and disability insurance contributions for employees whose employers failed to provide them. Ivana Mihajlović, Deputy Secretary-General and Legal Advisor at the USSCG, emphasized to Pobjeda that the proposed amendments would ensure greater fairness and sustainability of the Labor Fund and called on lawmakers to urgently include the initiative in the legislative agenda.
Amendments and additions
Mihajlović warned that a large number of employees have been affected by the issue of unpaid contributions due to employer neglect and company closures, and the state must take responsibility and allow these employees to access their pension rights.
“We prepared and submitted the proposed amendments to the Law on the Labor Fund to the Speaker of the Parliament and all parliamentary clubs as early as 2021, and followed up in 2022, 2023, and twice last year. The proposed changes aim to expand the powers of the Labor Fund, which is in line with its intended role as a guarantor. Additionally, the initiative is grounded in the availability of financial resources, as almost 90% of the funds allocated to the Labor Fund are misused or redirected to other budgetary units,” Mihajlović explained.
She clarified that, unfortunately, there is no precise record of how many employees in Montenegro are suffering due to unpaid mandatory social insurance contributions, but she believes the number is significant. She also noted the severe violation of constitutional and legal rights regarding the payment of these contributions.
“Nevertheless, we are confident that the existing resources of the Labor Fund are sufficient to meet the needs arising from the proposed expansion of its powers. The USSCG receives daily complaints from our colleagues who are unable to claim their pensions because their employers have failed to pay part or all of the required contributions, and the companies involved have since ceased to exist. Since the state bears the greatest responsibility for this situation, by allowing employers to neglect their obligations both to employees and the state budget, it is the state’s duty to take responsibility for the future of citizens affected by this situation,” Mihajlović stated.
Given that this initiative has been submitted in previous years, she expects lawmakers in the Parliament to finally recognize the significance, importance, and urgency of acting on this initiative, as its implementation will determine the future and livelihood of hundreds of citizens.
Ensuring citizen rights
Mihajlović emphasized that the initiative to amend the Law on the Labor Fund is based, among other things, on the fact that the failure of relevant institutions has led to many citizens being unable to access their rights due to illegal actions by their employers.
“These employers have harmed both their employees and the state budget, and have remained unpunished. It is clear that the state must take responsibility for mitigating the harmful consequences. State institutions, particularly those responsible for monitoring and enforcing the legislative framework, are the most responsible for introducing a system of accountability in the labor market with consistent application of the law and authority. Establishing a system of accountability at all levels, including in the labor market, has been a chronic issue that the USSCG has insisted on since its inception,” Mihajlović explained. She further noted that any inaction, neglect, or inadequate response from relevant institutions leads to legal uncertainty, undermines the rule of law, and contributes to the erosion of legal security, giving cover to those who do not bear responsibility for their illegal actions.
“Let us remind you that violations of labor and social security rights are classified as criminal offenses, punishable under Montenegro’s Criminal Code with fines or up to two years in prison,” Mihajlović concluded.
The Minister of Labor and Social Welfare, Naida Nišić, recently stated that the amendments aim to expand the scope of the Labor Fund and address the injustice faced by workers who were left without pensions due to employer negligence.
“The Labor Fund is a guarantee institution that must exist. Through the Fund, we resolved the ‘Košuta’ issue. We believe this institution has been underutilized. If something has the status of a guarantee institution where a certain portion of contributions is paid, then all our citizens who meet one of the conditions for a pension but, for some reason, their employers did not pay contributions, will be able to secure it through the Labor Fund, which will no longer be limited solely to bankruptcy cases, but its activities will be expanded,” Nišić said.
