Are you aware of Just Cause clause in the Field of Employment Law?


Just cause is the concept usually found within the field of employment law related to reasons for dismissal initiated by the employer. In comparative law, employer and the employee may agree to include such contractual clause in the employment contract. Typically, just cause refers to an employer’s right to terminate the employment contract for a specifically determined reason without providing severance. In all other cases, the employee would be entitled to contracted severance pay. Thus, just cause ensures job security for employees by providing that termination is not arbitrary. It also ensures clear expectations and consequences in the employment relationship between employer and the employee.

Upon termination of employment due to employees breach of discipline or other work-related obligations, the employer is obliged in the least to provide some sort of notice to the employee i.e. to warn the employee in writing of the existence of cause for dismissal of the employment contract. On the other hand, it can be agreed that the employer pays some kind of severance pay or bonus in case of dismissal. But in case of serious misconduct or repeated grave violations of employer policies by employees, which are specially determined as just cause for dismissal, the employee wouldnt have any rights – it is what Just cause clause means.

Just cause clause is not prescribed under Serbian employment law. The validity of such contracted clause depends on its effects. In answering these questions, the existing rules and principles of labor law should be considered. 

  1. The Principle of the Greatest Advantage for Employees

The Labour Law guarantees minimum employees’ rights. Namely, any legal act related to employment as employment contract or employee handbook cannot provide less than the minimum employee rights prescribed by the Labour law. In employment law, this principle is known as the principle of the greatest advantage for employees. In practice, it causes the nullity of those prescribed provisions which conflict with the Labor Law provisions.

An employee cannot have fewer rights than minimum rights guaranteed by the Labor law legislation, but all the provisions contracted for greater benefit of the employee remain in force. Therefore, just cause is nullity if it prescribes dismissal without warning notice or other deterioration of the employee’s position.

On the other hand, just cause clause under which it is prescribed that the employer owes the severance pay in case of dismissal in all cases of the dismissalexcept in specially determined causes for dismissal,should beallowed under domestic employment law.

  • Just Cause and Severance Packages

Just Cause could provide more favorable position for the employees in the case when the clause prescribes “just reasons” when employer does not pay severance packages for employees (here, we speak solely about contracted severance, bearing in mind there are legal provisions regarding obligatory severance pay). In all other cases, the employer would be obliged to pay the employee some type of agreed severance package upon dismissal. In this case, just cause prescribes that former employer provides agreed severance package upon dismissal for all reasons except “just cause” reasons. Thus, the topic of this article is actually enabling the mandatory severance package to be agreed upon every dismissal by the employer.

The question arises as to whether the mandatory severance package can be contractedwithout just cause? Although this solution is the greatest advantage for employees, it would not be fair in any case. In this sense, note that contractual provisions contrary to compulsory regulations, public policy or fair usage shall be void. It can be considered that such provision which obliges the employer to provide severance package even in the case of serious misconduct by employees is contrary to fair usage. For example, absence of an employee or criminal offense related to the employment cannot result in the payment of severance package. Therefore, it is necessary to foresee in the form of just cause the specially determined reasons for refusing severance.

Lastly, just cause could find its place under umbrella of domestic practice, if we takse stand that such clause brings more favorable rules for the employees. Therefore, in the negotiation with the employer, employees should consider such clause, which can bring a great benefit to the employee when it is duly defined.




Milica Radović

Attorney-at-Law | Counsel