Category: Serbia

Artificial intelligence (AI) is set to change how we perceive intellectual property.  With the recent surge of AI, people are discovering that AI can generate works of art.  This raises important questions, such as the attribution of authorship for these creations and the protection of intellectual property (IP) rights.

We explore some critical issues regarding AI and its connection with IP here and offer potential solutions.  We also provide insight into famous cases and trends that may be crucial for the further development of AI in IP rights.

The Owner of the Copyright

So, who is the author of intellectual property created by an AI?  Is it the individual giving instructions and prompts?  The creator of AI?  The owner of the data used for training the AI?  The AI itself?  Is there an author?

Even though using AI to create IP is not explicitly regulated, we can still find answers to some of these questions in existing legislation.  For example, the USA, Spain, Germany, and Serbia only allow human beings to be considered authors.  Therefore, AI may not claim authorship in these countries.  Similarly, patent registration offices in the UK, USA, Europe, South Korea, Taiwan, and Germany have refused to register AI as the inventor of a patent (DABUS case).  When we asked ChatGPT whether it can hold copyright, this is the response we got: “As an AI language model, I am a computer program, and I do not have legal personality, so I cannot hold copyright over anything.  The responses I generate are generated from patterns and associations in the data I was trained on and are not owned by me or any individual or organization.  However, the data I was trained on may be subject to copyright owned by the original sources or organizations that provided it.” So, AI cannot be the Author or the Inventor.

But who can?

The work must be an original creation of the author to enjoy copyright protection.  This poses the question, could an AI creation be considered authentic?  Even though not directly prohibited, the current case law is very much against this.  Both the European Court of Justice of the European Union and the US Supreme Court believe that copyright protection only applies to original works with some degree of intellectual creation, creative powers of the mind, and reflection of the author’s personality (in Infopaq and Feist Publications cases, respectively).  Since the element of originality is missing when an AI is the sole creator, this implies that the author is also missing.

Based on this, there are currently two possible solutions to this issue.  First, there is no author.  The IP created by AI will be considered public domain.  Alternatively, the work will be considered a derivative of all the materials AI used for training.

However, there is an obvious problem in proving that something was AI-generated.  Recognizing whether something was AI-generated or not is nearly impossible.  This is made further troublesome because even giving AI the same prompts can lead to different results based on the previous prompts given to the AI.  Even AI detection software can fail at this task, especially if the AI code is unavailable to the public, which most often will not be the case.  One way to avoid this issue is to have artists record the entire creation process.  This is, obviously, supremely impractical, but it’s the only way for now to avoid any doubts about the origin of IP.

The UK, however, takes a different approach.  The UK Copyright, Design, and Patents Act considers the author of any computer-generated work (meaning generated by a computer with no human author) to be the person that made the necessary arrangements to create the work.  This rule applies to copyright, music production, and design but not to patents.  While this provides some clarity, it still does not eliminate the uncertainty surrounding the authorship question.  The person who made the necessary arrangements could still be the person who made the AI or the user of the AI which gave the prompt, depending on how complex the prompts and algorithms are.  This would be the case if AI made the IP.  However, what if the AI didn’t create the IP but only helped you create it?  Could AI be considered an ordinary tool, just like any other software?  These cases are more complex and need to be solved individually.

We already have an existing case that may indicate a way to solve this issue in the future.  Zarya of the Dawn, a graphic novel created with the assistance of AI, has been registered in the United States.  It is important to note that AI only generated the images. A human writer conceptualized and structured the story, devised each page’s layout, and made artistic decisions about arranging all the components.

While the Copyright registration office is not a court, and courts may take a different stance on this issue, it is safe to assume that if there is significant human involvement in creating IP, AI could still be considered a tool like any other.

The Input-Output Issue

Ownership is the primary concern when it comes to using AI.  However, it is not the only one.  Another critical question needs to be addressed: Does the use of AI threaten the rights of other authors?

To understand this issue, we first need to know how AI works.  AI systems require data to generate an output.  This data comes from various sources, such as articles, books, pictures, social media, web pages, and databases.  The AI system then processes and analyzes the data using various techniques such as machine learning.  This is called training.  Training the AI with copyrighted content will likely be considered fair use.  But what about the output?

This leads us to the core of this issue.  AI collects vast amounts of data, which may contain copyright-protected material, such as images, paintings, or text.  To create IP, AI usually reviews or uses reproductions of other people’s work.  AI-generated content may reproduce entire copyrighted works, such as articles, songs, or images, without permission or citation.  As a result, the owners of AI technology may risk violating someone’s copyright.

However, several arguments contradict the idea of AI violating copyright.  First, the input data which the AI uses is massive.  There is so much data that many argue there can be no copyright infringement.  Despite that, a prompt could make AI focus on different data, narrowing the search, and harming the rights of only a selected handful of artists, coming dangerously close to plagiarism.  In this case, it would still be unclear who made the infringement, the prompt giver or the author of AI.

Second, AI learns from the work of other authors, just like humans.  Learning and experiencing other people’s work is the backbone of all creation.  How could we forbid learning?  However, unlike AI, humans can understand and appreciate art on multiple levels, from surface-level aesthetics to the deeper meanings and themes that underpin the work.  Humans can also develop their unique styles and perspectives over time, which can be difficult for AI to replicate.

Undoubtedly, this issue will significantly impact the companies developing AI, the entire AI industry, and the owners of the data used for training.  This is why we need to look at several cases that may indicate the future development of AI regulation regarding IP.

Cases

1. Microsoft, OpenAI, GitHub

The first is a proposed class action lawsuit targeting Microsoft, its subsidiary GitHub, and business partner OpenAI, alleging that their creation of GitHub Copilot, an AI-powered coding assistant, relies on “software piracy on an unprecedented scale.” The lawsuit claims that Copilot is trained on code scraped from public repositories, some of which are published with licenses that require anyone reusing the code to credit its creator, which the Copilot did not do.  This lawsuit claims that Microsoft and its collaborators violated the legal rights of millions of programmers who spent years writing the original code.

According to Microsoft and OpenAI, the plaintiffs did not have the standing to bring the lawsuit as they failed to prove that they suffered specific injuries due to the companies’ actions.  Additionally, the companies argued that the case did not identify the copyrighted works that were allegedly misused or the contracts that were breached.

Microsoft also argued that the copyright allegations would conflict with the doctrine of fair use, which permits using copyrighted works without a license in certain circumstances.  They cited a 2021 decision by the US Supreme Court, which ruled that Google’s use of Oracle’s source code to develop its Android operating system was transformative fair use.

While the case is still in its early stages, it could have significant implications for the AI industry.

2. Stability AI

Stability AI, the maker of Stable Diffusion, has been the subject of two lawsuits: a class action lawsuit and a lawsuit by Getty Images.

Getty Images sued Stability AI for allegedly infringing on Getty’s copyrighted images on a massive scale.  Getty claimed that Stability AI marketed its Stable Diffusion and DreamStudio interface to consumers seeking creative imagery.  Its success was partly due to the infringement of Getty Images’ content.

Getty Images also claimed in the lawsuit that Stability AI removed Getty’s copyright management information, provided false copyright management information of its own, and violated Getty’s trademarks by replicating Getty’s watermark on specific images.

This case might be somewhat specific because Stability AI didn’t directly collect the model’s training data or train the models behind the software.  Instead, it was developed by a German university (LMU Munich).  Therefore, it might be more difficult to prove copyright infringement in this case since using AI for educational purposes would fall under fair use.

Regardless, as this case develops, we will need to keep a close eye on it since it could significantly impact AI regulation in the future.

3. Nova Productions v Mazooma Games

This case might be important when it comes to UK law.  Specifically, in this case, the court ruled that a person playing a computer game cannot be considered the author of screenshots taken while playing the game and that the player had not been involved in any of the necessary arrangements for creating the images.  The court instead determined that the game developers were responsible for making the arrangements required for creating the screenshots.  When we apply this principle to the issue of copyright regarding AI, this may imply that the author of the AI, more precisely, the designer of the learning algorithm, owns copyright over AI-created work.

Conclusion

Things will become even more complex as AI becomes more widespread and advanced.  That’s why new AI regulations are needed.  The question of who or what society wishes to reward would then need to be asked.  Should it be the owners of an AI system?

Regarding copyright protection, the approach that seems to provide the most economic incentives grants authorship to the person who made the AI possible.  This approach will ensure that companies invest in AI and technology, knowing they will get returns on their investment.

On the other hand, regarding patents, IP regulation can be very beneficial due to its flexibility.  Since patents made with AI can be easier to develop than regular patents, lawmakers could decide to protect the rights of AI-made patents for a shorter period than the standard patents.  This would balance the inventor’s rights, economic incentives, and social welfare.  Instead of just giving patents to the inventor, lawmakers could share the rewards of an AI-generated invention among the AI developer, the person directing the AI, and the owner of the data used to train it.

There may need to be more than existing copyright laws and regulations to address this new technology’s challenges and opportunities.  To ensure that AI-generated art is created and shared in a way that is both ethical and legally sound, future regulations will need to consider the unique characteristics of AI-generated works, the challenges of enforcing copyright in a digital age, and the need to balance the interests of creators, consumers, and society.  Only by approaching this issue with a thoughtful and nuanced perspective can we ensure that AI-generated art continues to push the boundaries of creativity while respecting all stakeholders’ rights and interests.  Luckily there is a new AI Act in the making.

By Miloš Petaković, Senior Associate, and Bojan Tutić, Associate, Gecic Law

Andrejic & Partners has advised Booking on offering insurance services in Serbia.

Booking operates as a travel e-commerce company.

According to Andrejic & Partners, Booking was exploring the possibilities of potentially offering insurance as an auxiliary service to people traveling to Serbia, once they book their accommodation.

Andrejic & Partners’ team included Managing Partner Aleksandar Andrejic and Associate Luka Ratic.

Former Senior Counsel Ivana Rackovic has been promoted to Partner at Karanovic & Partners.

According to Karanovic & Partners, “Ivana was a Partner in our Dispute Resolution team back in 2009 and after a pause in her career during which she was fully devoted to her family, Ivana came back as Senior Counsel in 2020. Now we are thrilled to have her back in the role of a Partner once again.”

Rackovic is a graduate of the University of Belgrade’s Faculty of Law. She first joined Karanovic & Partners in 2005, and became a Partner and Head of the Litigation Department in 2009, before leaving the firm in 2010. In 2020, she re-joined as Senior Counsel.

 

As mentioned in one of our previous articles (available here), the application of amendments to the Law on Personal Income Tax, which were published in the Official Gazette of RS no. 138/2022 of 12 December 2022 and which stipulate that the annual personal income tax shall be paid by self-taxation and not on the basis of the decision rendered by the competent tax authority, which was the case so far, commenced on 1 January 2023.

In relation thereto, the Rulebook on Tax Return for Annual Personal Income Tax (Official Gazette of RS no. 24/2023) was passed, and it entered into force on the first day following the day of its publishing, i.e., on 30 March 2023 (“the Rulebook”). The Rulebook prescribes the manner of submission and content of the tax return for the annual personal income tax that is calculated and paid by self-taxation.

Taxation by the annual personal income tax

As a reminder, the annual personal income tax is paid by natural persons whose income in a calendar year exceeds the amount of triple average annual salary per employee paid in the Republic of Serbia in the year for which the tax is determined, according to the data registered by the republic statistical office, i.e.:

• by residents – for income collected in the territory of the Republic of Serbia and in another state;
• by non-residents – for income collected in the territory of the Republic of Serbia.

This practically means that natural persons whose income in 2022 exceeded RSD 3,719.376 shall be subject to this tax.

The basis of annual personal income tax is a taxable income, which represents the difference between taxable income (from Article 87, para. 8 of the Law on Personal Income Tax) and personal allowances (according to Article 88 of the same law).

The annual personal income tax shall be paid to the above-mentioned base according to the following rates:

• to the amount up to sixfold average annual income – 10%;
• to the amount exceeding sixfold average annual income – 10% for the amount up to sixfold average annual income + 15% for the amount above sixfold average annual income.

Submission of the tax return

The tax return for annual personal income tax is submitted to the Tax Administration on PP GPDG form (“PP GPDG Form“) as follows:

Based on the data from official records, the Tax Administration shall enter the data into the tax return on PP GPDG Form and upload it on the Tax Administration portal, no later than 1 April of the year following the year for which the annual personal income tax is determined;
The taxpayer is obliged to change and/or supplement the above-mentioned tax return, in the part where accurate and relevant data are not presented, and to submit this return electronically through Tax Administration portal, within a legally prescribed deadline that has not been changed, i.e., by 15 May;
Tax return on PP GPDG Form is submitted by taxpayer, its representative or another person authorised by the taxpayer to submit tax return, attorney or ex officio representative, whereas the applicant is obliged to place electronic signature on the tax return in accordance with the Law on Electronic Document, Electronic Identification and Trust Services in Electronic Business;
Non-resident taxpayer is obliged, for the purpose of submitting tax return, to designate a tax representative in the Republic of Serbia, in accordance with the Law on Tax Procedure and Tax Administration.
If the payer of annual personal income tax fails to submit or untimely submits the respective tax return, it may be subject to the misdemeanour liability and fine (from RSD 5,000 to 150,000).

By Lara Maksimovic, Senior Associate, PR Legal

On 23 March 2023, the Serbian government adopted Ethics Guidelines for the Development, Implementation and Use of Reliable and Responsible AI (“Guidelines”), which may be seen as yet another step in the process of harmonising Serbia’s legislative framework with the European Union, following the Proposal for an AI Regulation announced by the EU Commission two years ago.

The Guidelines largely rely on UNESCO’s Recommendation on the Ethics of AI adopted in 2021, which Serbian representatives also helped create. Since the EU is awaiting its regulatory framework on AI, Serbia took the first step down this road as well.

Purpose
In adopting the Guidelines the main goal is to prevent AI systems from endangering or marginalising people and their actions, and to ensure that the freedom of action, opinion and decision-making is not violated so as to render the rights and assets that preserve those values meaningless, diminished or forgotten. As stated in the Guidelines, the use of AI should serve to improve human productivity, optimise work resources and improve quality of life.

The Guidelines set the main principles and conditions for reliable and responsible AI systems, followed by a self-assessment questionnaire filled out by the developer or user of the AI systems and recommendations for improvement in accordance with the main principles and conditions set in the Guidelines. In addition, the Guidelines identify which AI systems may be considered high-risk.

General principles and conditions for reliable and responsible AI
The Guidelines set out general principles and conditions for the creation of reliable and responsible AI that all individuals and legal entities developing, applying or using AI systems should observe.

These general principles (“General Principles”) are: (i) explainability and verifiability, which emphasises the transparency of the AI system that could be checked throughout its life cycle; (ii) dignity, which means that the AI system cannot in any way lead to the subordination of humans to the functions of the system; (iii) “do not harm” principle, which means that the AI system must be safe and must contain mechanisms for avoiding damage to people and their property, as must not be used for malicious purposes; and (iv) fairness, which protects the rights and integrity of people, particularly sensitive categories (e.g. persons with disabilities).

The conditions for the creation of reliable and responsible AI are based on the above General Principles and are: (i) action (mediation, control, participation) and supervision; (ii) technical reliability and safety; (iii) privacy, data protection and data management; (iv) transparency; (v) diversity, non-discrimination and equality; (vi) social and environmental well-being; and (vii) responsibility.

Questionnaire and recommendations
The Guidelines set out for each of the conditions above (i) a self-assessment questionnaire (“Questionnaire“) and (ii) recommendations for complying with the stated conditions.

The Questionnaire is designed to assist individuals or legal entities that develop, market, acquire, apply and/or use AI systems to assess their compliance with the stated conditions. It is recommended that the Questionnaire be filled out in the earliest stages of creating an AI system, i.e. in the planning phase. By filling out the Questionnaire, the developers may identify areas for improvement and receive insight into already established measures.

Each of the conditions contains a list of recommendations that the subject must implement in order to achieve reliable and responsible AI systems.

High-risk identified AI systems
The Guidelines also identify high-risk AI systems that should be analysed and evaluated separately due to their importance and potential to influence people and their integrity. These include, for example, AI systems in the field of health (particularly systems analysing genetic and health data) and AI systems for the management of critical infrastructure (particularly systems that manage road traffic and the supply of water, gas, heating and electricity).

Conclusion
The Guidelines have been adopted to provide a framework and guide the work of all participants within the AI ecosystem. As an AI legal framework is only just starting to take shape in the EU, these Guidelines will enable further development in this ever-expanding area. Guided by the principles set forth in the Guidelines, AI should be used for the benefit of entire communities, and AI systems should serve to maintain and nurture democratic processes and respect the plurality of values and life choices of individuals. The Guidelines provide a basis for a wider implementation of AI in decisions that will shape social changes, increase knowledge and promote economic progress.

By Marija Vlajkovic, Local Partner, Schoenherr

On Tuesday, the EU Parliament unleashed a legislative game-changer in the global climate battle, adopting the world’s first carbon border tax (CBAM). The MEPs also formally adopted the deals reached with the Council in December 2022 on several other critical pieces of legislation, including the closely-related revised EU’s Emissions Trading System (“EU ETS“) and a new Social Climate Fund (“SCF“), all a vital part of the EU’s Fit for 55 package, designed to help the bloc cut greenhouse-gas emissions by 55 percent by 2030 against a 1990 baseline.

The CBAM complements the EU Emissions Trading System (ETS), addressing the phenomenon of “carbon leakage.” Together, these systems aim to foster competition and establish a “polluter pays” principle across the board.

Why does this matter?
The CBAM is a significant milestone in the EU’s fight against climate change, aimed at preventing companies from moving production to countries with less stringent green policies. This mechanism will help level the playing field and encourage non-EU countries to increase their climate ambition.

However, this may have a significant negative impact on many economies, including the Western Balkans, as more than 80% of the region’s exports go to the EU, and are heavily exposed in the affected industries. Unless urgent measures are introduced, the levy may reduce the competitiveness of businesses and economies in the EU market.

Adoption Process & CBAM Scope
Although the adoption of CBAM faced challenges and disagreements, the final approval by the EU Parliament marked a turning point. The CBAM will initially cover iron and steel, cement, fertilizers, aluminum, electricity, hydrogen, and precursors, with the possibility of expansion in the future. By the end of 2025, the European Commission will assess the likelihood of including organic chemicals and polymers in the scope of the CBAM, which are currently excluded.

CBAM’s Entry into Force
The CBAM will come into force 20 days after its publication in the Official Journal of the EU. Starting in October 2023, there will be a transitional period until the end of 2025. The CBAM will be fully implemented by 2034, requiring all companies operating in the EU to pay for CO2 emissions embedded in imported goods.

What should be done?
Companies worldwide must make strategic decisions to reduce emissions, switch to green technology, and include carbon offsetting in their supply chains. Governments should urgently look into ways of introducing national carbon pricing mechanisms. Governments and businesses must quickly adapt to the changes and prepare to face the challenges ahead.

Gecić Law is closely monitoring these developments and will continue to provide updates on this groundbreaking mechanism.

By Nikola Ivkovic and Vasilije Boskovic, Associates, Gecic Law

Andrejic & Partners has advised Villa & Spa Stevic on submitting its successful application to the EU for Cultural Heritage and Tourism project.

According to Andrejic & Partners, “EU for Cultural Heritage and Tourism is a project aiming to support the tourism sector as a significant potential for the economic development of the destinations Eastern Serbia and the Lower Danube region, including the Municipality of Topola. It is funded by the European Union and German Ministry for Economic Cooperation and Development BMZ and implemented by Deutsche Gesellschaft fur Internationale Zusammenarbeit GIZ. The project is delivered in cooperation with several partners from the public and private sectors across central, regional, and local levels, most prominently the Ministry of Trade, Tourism, and Telecommunications, as the central actor for the steering and implementation of the national tourism strategy.”

According to the firm, Villa & Spa Stevic was “approved with funds for a project related to the transfer to green energy sources.”

The Andrejic & Partners team included Managing Partner Aleksandar Andrejic and Associate Luka Ratic.

Remote work has become widespread in Serbia – and dominant in industries like IT – while the country is facing both layoffs and a shortage of workers, depending on the sector, according to NKO Partners Partner Danica Milic.

“In Serbia, remote work has recently been a primary discussion point,” Milic begins. “Remote work models have become widespread and even dominant in some industries, not only due to technical progress but also as a consequence of the COVID-19 pandemic. In particular, the IT industry has seen the wide adoption of remote work, with employers making efforts to accommodate employees who prefer this model, allowing them to work from home or other locations.”

At the same time, Milic highlights that “the rise of remote work has also raised legal concerns, such as how to regulate it in contracts, how to manage working hours and supervision, and how to address health and safety issues.” Additionally, she says there are “concerns about the utilization of work-related tools and equipment, as well as the reimbursement of associated costs. These concerns highlight the need for organizations to carefully consider and internally regulate the legal implications of remote work, especially considering that Serbian law lacks clear and precise regulations on remote work, even though it allows for remote work agreements.” For example, “regarding health and safety, it is the employer’s responsibility to ensure a safe workplace for employees, but specific provisions should be included to clarify that employees are also responsible for maintaining a safe and distraction-free home working environment,” she points out.

Furthermore, Milic adds that “post-pandemic, some companies have found the need for organizational changes, including restructuring and redundancy procedures. Lawyers have frequently been involved in creating redundancy programs for various companies over the past six months, as this need has become more widespread.” In addition to assisting with redundancy programs, she notes that lawyers “also help companies to explore alternative options for targeted employees before letting them go. This includes considering measures required by law, such as finding other types of employment within the company or helping employees change their qualifications through seminars and courses to transition to another company with different requirements.”

“Despite companies’ efforts to find work in different departments or sections and shift the workforce, unfortunately, layoffs have still been necessary in some cases,” Milic points out. “The most significant layoffs have been observed in production companies working with non-essential commodities. The implementation of upgraded technologies has resulted in reduced demand for labor on new machines, leading to workforce reductions in these industries.”

“Still, the construction sector has shown potential for employment opportunities,” Milic adds. “There has been an influx of workers from different continents coming to Serbia to seek employment in construction and transportation, such as bus driving. A significant number of Serbian workers have left for Western countries, creating opportunities for foreign workers in these areas.”

“Furthermore, the IT industry in Serbia has been experiencing growth and expansion, providing additional employment opportunities for individuals with relevant skills and qualifications,” Milic notes. “Despite the challenges faced by certain industries, there are still areas where employment opportunities can be found and pursued in Serbia.”

NKO Partners has advised CTP on the acquisition of Jagodina land intended for industrial development from the City of Jagodina, acting through its local government representatives.

According to NKO, “the project was declared to be of special economic importance for the city of Jagodina and local development.”

Two months back, NKO Partners had also advised CTP on its acquisition of Vojvodina-based land developer BIMS Properties (as reported by CEE Legal Matters on February 28, 2023).

The NKO team included Partner Djordje Nikolic and Senior Associate Luka Aleksic.

The answer is simple: to make EU membership top priority, to form the team with the capacity to drive and stay on the train until the final destination. But it is not only important for the team to have only the Loco pilot only to drive the train, the team must have other members with the understanding who is in the train, the train route both in Serbia and EU and who share strong belief that the final destination will bring the benefits not only to the country of the departure (passengers) but also to the countries and citizens of  the destination. If something is missing in that chain, it may happen that the Loco pilot may drive the train via Antarctica to EU with the possibility that the train may get stuck somewhere on the route and may never reach its final destination.

 1) Where is the train for the time being?

Life Event – Processing of Employees’ Health Data by Employers

A) Patient/Employee Vs Doctor

An employee feels health problems and goes to the doctor. The doctor performs medical examination, determines health condition of the employee – health diagnosis and inserts medical prescription in ICT system. The pharmacist identifies the patient and issues medicines to the patient.

B) Doctor Vs Sick Employee Vs Employer

Fact 1

The employer must plan and organise the working operations.

Fact 2

The employer must be notified on the absence of the sick employee to be able to plan and organise work operations.

Fact 3

Manner of notification of the employer on temporary inability of the employee to work

Current condition: Within three days upon occurrence of inability for work, the employee must deliver certificate issued by doctor containing expected time of inability to work.

The doctor and Health Commissions determine the length of time of temporary inability to work.

Applicable regulations:

Article 103 para 1 and para 4 of Labour Law

Article 73 para 2 Law on Health Insurance

Fact 4

Content of the certificate

The certificate contains general data of the health institution and employee, ground for temporary inability (disease) and health diagnosis (International Classification of Diseases code).

The fact that health diagnosis codes are publicly available enables employer to process health data of the employees without any legal justification. The matter is more challenging as the employers may abuse the health data of employees, i.e., interpret the codes and the length of absence and take certain measures against the employees.

The Rulebook defining content of the certificate was rendered in 2001.

Fact 5

Purposes of processing of personal data from certificate

By employer: payment of compensation on the ground of the inability to work for the first 30 days

By the Healthcare Insurance Fund: payment of compensation on the ground of the inability to work of after 30 days

Employer calculates the compensation in both cases; in the latter case, the employer submits request for payment of compensation to the Health Insurance Fund.

Applicable regulation:

Articles 101 and 102  of Law on Health Insurance

Fact 6

Personal data required for calculation of salary

Report on inability for work issued by the doctor – this document does not contain health diagnosis since 2021.  

This document shall be differentiated from the certificate. The certificate is issued at the beginning of sick leave, while the report is issued at the end of sick leave period or at certain point of time during the sick leave to provide the employer with information that the sick leave is either still opened or closed and to calculate the compensation on the ground of the sick leave.

Applicable regulations:

Article 1  para 1 Rulebook on Forms in the Health Care System

Article 81 of the Rulebook of Manner and Procedure of Achievement from Obligatory Health Insurance

Fact 7

Personal data required for approving inability to work above 60 days and revision of the opinion of the doctor 

a) After 60 days –the doctor submits documents to the Health Commission – proposes prolongation of the sick leave;

b) In case the Healthcare Insurance Fund or employer require revision of the opinion the doctor.

In these cases, personal data are processed by the doctor, the Health Commissions or the Healthcare Insurance Fund itself.

Applicable regulations: Articles 75 para 4, Article 156 of the Law on Health Insurance  

In case under a) health data are processed by the doctor and the Health Commission/the Healthcare Insurance Fund

When the employer initiates revision of the temporary inability to work, personal data processed are contained in medical documentation (in possession of the health institution) and are processed in presence of the employee and, if necessary, a medical examination of the employee is performed.

None of the applicable regulations authorise the employer to process health data in case when the employer decides to request revision on temporary inability to work, to check potential abuse of the right to sick leave by sending the employee to another health institution at his expense or by conducting internal checks to collect information on potential abuse on the right to sick leave (Article 17 para 2 item 2 of the Law of Law on Protection of Personal Data in connection to the Article 179 para 4 of the Labour Law).

Fact 8

Processing of health diagnosis by Health Insurance Fund

Having in mind that the employer does not need personal data – health diagnosis for any reason, it is necessary to change the provisions of the Law on Health Insurance in a manner that the doctors share this data directly with the Health Insurance Fund. The processing of this data by the Health Insurance Fund is necessary to decide in the procedure on the right to salary compensation in the case of temporary inability to work upon expiration of 30 days or in the case when the Health Insurance Fund performs revision of the reasons for temporary inability to work itself.

2) Where does the train go?

It remains unclear why the Government has not for 22 years amended regulation which prescribes that certificate issued by the doctors and provided to employers contains health diagnosis. This unclarity gains more significance due to the fact that the Government changed the content of the report on inability for work, which now does not contain health diagnosis and serves as the ground for payment of compensation during the temporary inability for work by the Health Insurance Fund. In situation when the document submitted by employer to the Health Insurance Fund for the purpose of payment of compensation does not contain health diagnosis, the question is from which source the Health Insurance Fund will obtain health diagnosis for its records and to perform its competences. A possibility that doctors send report on temporary inability to work is not foreseeable at the moment.

The form – report on inability for work without health diagnosis is still not used and nobody knows the reason for delay. The doctors still use the old form and insert the health diagnosis.

It is unclear why the Ministry of Health has still not consummated the power from Article  33 para 2 item 11 of the Law on Health Documentation and Records in the Field of Health and amended the content of the certificate, while on the other side amended the content of the report on inability for work.

It is also unclear why the lawmaker and the Government determined that certificate on temporary inability for work shall contain health diagnosis and could not anticipate that this health data is not needed for any reason and may be abused by employers.  Is this a problem with Loco pilot or the members of the team who should understand the route in Serbia and in EU or the persons in the train?

In 2021 the amendments and supplements of the Law on Health Insurance were proposed authorising the Health Insurance Fund to calculate the compensation of salary during temporary inability for work after 30 days and to transfer to employer the funds. In the proposal to the said amendments and supplements, it is stated that the doctor shall, with the consent of the employee, provide certificate on temporary inability to work to employer. However, the latter amendment is not visible from the proposed text of the amendments and supplements of the Law on Health Insurance. The processing of the health diagnosis by employers is still possible and there are no indicators that this practice may be stopped in the near future.

By Ivan Milosevic, Partner, JPM Jankovic Popovic Mitic