2024 million euros were spent on service contracts from the Montenegrin budget in 20,8, which is four times more than 10 years ago, according to data obtained by Center for Investigative Journalism (CIN-CG).
Abuses of such contracts occur where employees are supposed to remain in systematized positions and work “permanently.” However, this is not the case in a large number of institutions.
People who are practically employed through a temporary employment contract are directly harmed, because their employers do not pay them pension benefits, they do not have the right to credit, annual leave, paid leave, increased earnings based on night, overtime, holiday or Sunday work, the right to union organization and action, etc.
This is supported by CIN-CG's interlocutors, who wished to remain anonymous because they have been employed in certain state bodies for a long time, and believe that they have been directly harmed, and that such contracts prevent them from establishing an employment relationship as stipulated by the Labor Law.
When it is L. (identity known to the editorial team) after completing her education, she started working in a public institution in Montenegro. She was happy because she got the opportunity to do what she knows and loves.
Several years later, she finds herself in the same institution, without an employment contract. All this time, she has been employed through a contract for work and a contract for assignment, as well as a contract for occasional and temporary work. And all this, as she claims, because "she has no connection."
She told CIN-CG that she was not entitled to a vacation for three full years at that institution, and that at one point she worked for an amount that was even below the minimum wage. During that time, dozens of people had established a normal employment relationship at the same institution. They received an employment contract even after the stipulated two-year period and a permanent employment decision. Some, she notes, received that decision even after two or three months. Not her.
"They told me that if I 'had someone', everything would go faster and easier. Which means that the effort and proving things are not worth it in these cases. There are a lot of people who have been in similar situations to me and for a much longer period of time," L told us.
Her employer deliberately did not give her a contract so that she would not even come close to a chance of starting a permanent job, even though she regularly goes to work every working day. In order not to take the position of someone with a connection, she was left "hanging around".
He has been working in another public institution in Montenegro for the past few months. N., also hired through a contract for services. She tells CIN-CG that she was hired for that job to perform a specific job for a specific fee within a specified period. However, as she notes, she goes to work every day and works full-time at that institution even though that was not planned, because, as she said, her employer “tied” her to that position. She also does tasks that are not planned within her job description.
IN SOME INSTITUTIONS, EVEN 70 PEOPLE WITHOUT EMPLOYMENT CONTRACTS, THERE IS A LACK OF SOCIAL DIALOGUE
The cases of our two sisters are not isolated, so the cost of the state budget for service contracts has increased from 5,7 million (2014) to almost 21 million euros, which is what it was in 2024, although 16 million were planned to be spent for this purpose last year. This is twice as much as in 2021.
Expenditures on this basis amounted to around eight million euros in 2019, and around 2022 million euros in 14, increasing to 21 million last year. A reduction in the cost of service contracts is planned for this year, but they still represent a significant item and amount to 16,6 million euros.
For service contracts, in the first eight months of the previous year, 15.334 contracts were signed and 15.156.190 euros were paid.
Among the institutions that lead in spending state money for the accounting period from January to August on the basis of service contracts is the Statistical Office. During that period, when the census was also conducted, 1.010 service contracts were concluded and just over four and a half million euros were paid out on that basis.
The Ministry of Foreign Affairs spent 1,8 million and signed 405 contracts in the same period. The Directorate for the Execution of Criminal Sanctions spent 969.429 euros in eight months and signed 127 contracts. The Ministry of Internal Affairs spent 686.084 euros and 1.580 contracts.
The Ministry of Culture and Media allocated 743.110 euros and signed 390 contracts, and the Real Estate Administration allocated 841.354 euros and signed 593 contracts for eight months of 2024.
Data was not available for many institutions that spend large amounts of money from the state budget.
The Statistical Office spent the largest part of its funds on the needs of the population census and the fees that were necessary for that purpose. The Ministry of Foreign Affairs traditionally allocates more funds for service contracts and expert contracts for the engagement of external associates and consultants.
CIN-CG also obtained information that a significant number of people in the Real Estate Administration (UZN) are employed on the basis of service contracts.
Until January 4, 2024, the Real Estate Administration functioned within the Cadastre and State Property Administration, and by decision of the Government on that day, the Real Estate Administration and the State Property Administration were established.
The Administration told us that, in accordance with the Rulebook on the Organization and Systematization of Jobs, a total of 106 temporary contracts were hired for auxiliary jobs that are necessary for the regular work of this body, for a period of three months.
SYSTEMIC PROBLEM, NEEDS A “CUT”
The Deputy Secretary General of the USSCG believes that this practice has become established and has become a means of legalizing nepotism. Ivana MihajlovicShe told CIN-CG that for years, service contracts, along with temporary and occasional work contracts, have been abused in Montenegro with the aim of circumventing employment procedures prescribed by the Labor Law and the Law on Civil Servants and Employees.
All this is done with the intention of circumventing respect for labor rights for people engaged in these precarious forms of work and, ultimately, with the aim of party-infiltrating those who would not be able to work in the public sector through regular procedures, adds Mihajlović, concluding that it is the parties that dictate everything.
Director of Action for Social Justice (ASP) Ines Mrdovic For CIN-CG, it is problematic that no one is putting an end to this practice - neither the inspections, nor the State Audit Institution (DRI)...
“It is possible that the fear of potential criminal prosecution could somewhat stop this practice,” said Mrdović.
Mihajlović, on the other hand, finds it devastating that, for years, this negative practice has been dominantly used in the public sector, where the state is the employer and which, through such a practice, sends a very clear message to the private sector that it is okay and profitable to hire the necessary executors in this way.
This shows that it is "okay" to perform regular business activities using persons hired under such contracts, without having any obligations towards them and ultimately having the ability to terminate such a contract at any time.
There are also abuses of service contracts in various ways. For example, a person meets the requirements for an old-age pension, but continues to work in an authority, institution, or company, even though a new employee is being hired in parallel. Or, a manager “honors” an employee in this way, even though he already has a regular salary. The bottom line is that there is no real control over these engagements.
INSTITUTIONS ARE KEEPING SILENT ABOUT THE PROBLEM, AND WHEN THEY DO APPROACH A SOLUTION, THEY DO IT COSMETICALLY
Employment based on service contracts has reached a critical point, Mrdović states, adding that the competent authorities need to consider the possibility of criminally regulating this issue. When asked whether they are considering doing so, the Ministry of Justice did not respond.
"This is the only way to put an end to this illegal, yet widespread practice. Contracts for service have literally become a 'shortcut' for entering the public sector for politically, interest-based or nepotistically connected individuals. First, they are hired in this way, and then at some point, through a competition, the outcome of which is usually known in advance, they receive an employment contract," Mrdović notes.
After the Prime Minister's announcement Milojko Spajić that the use of these contracts will be reduced by 20 percent, and at the initiative of the Head of the Prime Minister's Office Branka KrvavacIn January, the Government adopted information on the need to reduce the number of engagements under service contracts in spending units financed from the budget of Montenegro.
The Government previously added that, in this regard, and due to the need to conclude possible new service contracts, they have proposed to the Government the formation of a five-member commission, which includes, among others, the relevant Minister of Public Administration, as well as the Ministers of Finance and Justice.
CIN-CG's questions about how the government commission will implement this, what the current situation is with these contracts, and what the executive branch's systemic response to this problem will be have not been answered by the time the article was published, despite numerous inquiries.
"The government team's intention to reduce the number of these contracts by 20 percent by the end of the year will not fundamentally solve the problem, which is already serious enough. A radical cut is needed for this problem, not obscuring the essence," said Ines Mrdović.
The government previously announced that the Prime Minister's Office is responsible for creating and maintaining the register of service contracts. This is the first of numerous measures that will follow, which, they say, are aimed at rationalizing spending and optimizing public administration.
This measure does not appear to be a systemic response from institutions, but rather merely a cosmetic adjustment of this area without a real approach to the problem.
TYPES OF CONTRACTS
A contract for services is defined by the Law on Obligations, so it is not a labor law institution. This type of engagement implies that the employee (entrepreneur, contractor) undertakes to “perform a certain job (manufacture or repair of something or perform some physical or intellectual work, etc.), and the client undertakes to pay him compensation for it”.
These are temporary contracts under which the employer hires workers for a specific, commissioned job, usually additional or part-time for a month or two, which cannot be completed with the existing number of employees. However, at the local level, as well as in state institutions and companies, workers work on this basis for years, in positions that are systematized as permanent, which is contrary to the Labor Law.
Contracts that are often used to circumvent the law include those for performing occasional-temporary work, as well as contracts for orders. Contracts for performing temporary and occasional work are regulated by the Labor Law. This contract can be concluded for performing tasks that are not provided for by the act on internal organization and systematization of jobs, and which by their nature do not last longer than 120 working days in a calendar year. There is also a contract for orders, which is regulated by the Law on Obligations. This contract implies that the employer and the executor of the contract conclude a contract for performing a certain job or providing a service. The executor is obliged to act in accordance with the order, and the person giving the order is obliged to compensate him for the costs and any damage incurred during the execution of the order.
It is important to note that this contract does not establish an employment relationship, but rather regulates the performance of a specific job or the provision of a service for a fee.
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