Employment Contract Termination in Montenegro
Conditions, notice periods and compensation for each ground of dismissal
For employers: grounds for dismissal
1.1. Redundancy
Conditions: Economic or organisational necessity. Prohibition on hiring for the eliminated positions for 6 months.
Notice: 30 days (up to 20 employees) or consultations with the trade union 30 days in advance (20 or more employees)
Compensation: Minimum 1/3 of average salary for each year of service; no less than three average monthly salaries
1.2. Company liquidation
Conditions: Liquidation decision documented and registered. Employment Centre notified.
Notice: None — the contract terminates by operation of law (Art. 164 Zakon o radu)
Compensation: Minimum two average monthly salaries (excluding taxes and contributions)
1.3. Poor performance
Conditions: Written instructions and a remedy period of no less than 30 days.
Notice: General notice period (otkazni rok) — 30 days
Compensation: None
1.4. Breach of labour discipline
Conditions: Regular lateness, absenteeism, alcohol/drugs at the workplace. Documentary evidence required.
Notice: 5 working days for explanation
Compensation: None
1.5. Contract expiry
Conditions: Contract terminates automatically.
Notice: Not required
Compensation: None
1.6. Probationary period (up to 6 months)
Conditions: The employer may terminate without giving reasons.
Notice: 5 days
Compensation: None
Employee rights
Severance pay
- • Redundancy: minimum 1/3 of average salary for each year, no less than 3 salaries
- • Liquidation: minimum 2 average monthly salaries
- • Wrongful dismissal: labour inspectorate or court — reinstatement + compensation
Right to appeal
- • Labour inspectorate (Inspekcija rada) — can be contacted regardless of other procedures; the law sets no deadline (Art. 139 Zakon o radu)
- • Before going to court, a mandatory amicable dispute resolution procedure applies — a proposal is filed with the Agencija za mirno rješavanje radnih sporova or the Centar za alternativno rješavanje sporova (Art. 140 Zakon o radu)
- • Court — if the dispute is not resolved amicably, the claim must be filed within 15 days of receiving the decision terminating the amicable procedure (Art. 141 Zakon o radu); the deadline does not run while the procedure is ongoing
For foreign employees
- • The contract duration is tied to the temporary residence and work permit: as a rule — up to 1 year, renewable. For IT and healthcare employees, under the amendments to the Law on Foreigners (Zakon o strancima, Off. Gazette of Montenegro 12/2018, last amended 3/2026, applicable from 31 Dec 2025) the permit is issued for up to 3 years, renewable for another 3 years
- • If the employee does not speak Serbian — in practice it is advisable to draw up the contract in two languages to avoid disputes over its content
- • Foreign employees have the same rights and obligations as local employees
Table: overview of termination conditions
| Ground | Notice | Compensation | Note |
|---|---|---|---|
| Redundancy | 30 days | ≥ 1/3 salary per year | Mass — additional steps |
| Liquidation | None | ≥ 2 salaries | Employment Centre notified |
| Poor performance | 30 days (otkazni rok) | None | Instructions required |
| Misconduct | 5 w.d. | None | Documentation |
| Contract expiry | Not required | None | Per contract |
| Probationary period | 5 days | None | No reasons required |
Penalties for employers
Failure to follow dismissal procedures exposes the employer to fines, lawsuits and an obligation to reinstate the employee with compensation for forced absence.
Current as of August 2026. This material is for information purposes.