New Serbian Law on Gender Equality – Spotlight on M&A Transactions

New Serbian Law on Gender Equality – Spotlight on M&A Transactions

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Employment law related matters are a fundamental part of every legal due diligence analysis of Serbian companies and their respective businesses. Following the enactment of the Law on Gender Equality ("Official Gazette of the Republic of Serbia", no. 52/2021, "Law"), the scope of legal due diligence exercises should be extended to also include targets’ compliance with obligations set forth in the Law.

In accordance with the Law, Serbian companies with more than 50 employees and individuals engaged on an out-of-employment basis are obliged to prepare and deliver to the Serbian Ministry of Human and Minority Rights and Social Dialogue ("Ministry") the following set of gender equality related documentation: 

  • company’s records of achieving gender equality ("Records"), which shall be delivered to the Ministry by 15 January of a calendar year for the previous year;
  • company’s annual report on achieving gender equality ("Annual Report"), which shall be delivered to the Ministry by 15 January of a calendar year for the previous year; and
  • company’s annual plan of measures for achieving gender equality ("Annual Plan"), which shall be delivered to the Ministry within 15 calendar days following the date of its adoption in the respective calendar year.

Although the Law entered into force in 2021, companies were not able to fulfill their obligations with respect to the Records as the Ministry did not adopt bylaws prescribing the respective template forms. However, the Ministry has recently adopted the Rulebook on keeping records and reporting on achieving gender equality ("Official Gazette of the Republic of Serbia", no. 67/2022, "Rulebook"), which prescribes necessary template forms of the Records and the new template form of the Annual Report, enabling Serbian companies to go forward with preparing the necessary Records and the Annual Report for 2022 and filing them with the Ministry by 15 January 2023.

As for the Annual Plan, this document shall contain several mandatory elements prescribed by the Law (e.g., short assessment of the current gender equality status, a list of special measures aimed to achieve gender equality, measures for implementing and supervising gender equality, etc.), but the Rulebook does not prescribe a compulsory template.

The failure to deliver any of the aforementioned documents to the Ministry constitutes a misdemeanor for which the respective company can be fined up to RSD 2,000,000 (approx. EUR 17,000), while the responsible person in the company can be fined up to RSD 150,000 (approx. EUR 1,280).

Even though it remains to be seen how stringently the Ministry will supervise the fulfillment of the abovementioned obligations and in which cases it will initiate misdemeanor proceedings, it seems that the Ministry will be able to conduct a strict supervision of compliance with the Law with relative ease.

Therefore, in the context of M&A transactions involving targets that fall within the scope of the Law, Serbian due diligence request lists should be updated going forward to adequately cover this matter and respective questions shall be raised during the Q&A process in order to analyze the target’s potential shortcomings in this respect. Based on the target’s feedback, an adequate seller’s warranty or seller’s indemnity (in case the target has not complied with any of the abovementioned obligations within the prescribed deadlines) shall be included in the respective share purchase agreement.

By Sasa Stojanovic, Partner, and Luka Radojevic, Attorney at Law, Radovanovic Stojanovic & Partners