EmploymEnt law ovErviEw 2017 - L&E Globalknowledge.leglobal.org/wp-content/uploads/LEGlobal_Memo_Romania… · 3. legal framework employment law in Romania is mainly based on the

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EmploymEnt law ovErviEw 2017

Romania

i. GEnEral 01ii. hirinG practicEs 02iii. EmploymEnt contracts 03iv. workinG conditions 05V. Anti-DiscriminAtion LAws 07vi. social mEdia and data privacy 09vii. authorizations for forEiGn EmployEEs 10 viii. tErmination of EmploymEnt contracts 11iX. rEstrictivE covEnants 13X. riGhts of EmployEEs in casE of a transfEr of undErtakinG 15Xi. tradE unions and EmployErs associations 16Xii. othEr typEs of EmployEE rEprEsEntativE BodiEs 18Xiii. social sEcurity / hEalthcarE / othEr rEquirEd BEnEfits 19

Table of contEnts

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3. legal framework

employment law in Romania is mainly based on the following sources:

• TheConstitution;• Europeanlegalinstruments:EULaw(including Treatiesprovisions,EUregulationsandDirectives andtheCase-lawoftheEuropeanCourtofjustice) andtheEuropeanConventionfortheProtectionof HumanRightsandFundamentalFreedoms, RegulationsoftheInternationalLabour Organization;• TheLabourCode;• LawsandGovernmentdecisions,especiallyLaw nr.62/2011regardingthesocialdialogue,Lawno. 263/2010onpublicpensionsystem,Lawno. 319/2006 on health and safety at the workplace etc.;• Caselaw:TheprovisionsoftheLabourCodeare interpreted through decisions of the Supreme Court(HighCourtofCassationandJustice);• InterpretativedecisionsoftheConstitutionalCourt whicharemandatoryandgenerallyapplicable;• CollectiveLabourAgreements;• IndividualEmploymentContracts.

4. NewDevelopments

LatelytherehavebeenanumberofchangesintheinterpretationofemploymentlawrelatedlegalprovisionsasaresultofdecisionstakenbytheHighCourtofCassationandJustice(thatissuedrulingsonworkingconditions,physicalandpsychicalunfitnessetc.)andtheConstitutionalCourt(thatstatedthatthesuspensionoftheindividualemploymentagreementisaviolationoftheconstitutionalguaranteedrighttowork).Also,asaresultofintroducingalegaldefinitionforthemoralharassment,employeeshavestartedtofilecasesonthisgrounds(priorto2015therehavebeenonlyafewcasesonmoralharassment).Workinghoursandovertimearestillimportantissuesthataredebated in courts.


i. GEnEral

1. IntroductoryParagraph

Romanian employment law is the product of constant changesmadeoverthelastyears inordertoestablishequilibriumbetweenthepowerofunionorganizationsandthepoweroftheemployers.Thishasprovenahardtask.AsaresultRomanianlegislationisoneoffewthatestablishes the mandatory reinstatement of wrongfully dismissedemployeesandallowstheunionfederationstoparticipateincollectivenegotiationsatthecompanylevelononehand,butisalsolimitstherighttostrikeforemployeesundercollectiveagreements.

2. KeyPoints

• Mostdisputesinvolvefinancialclaimsfromthe employees,thatusuallyincludeovertimepayment, grantingofworkingconditions,bonusesetc. Employersoftenfacecollectiveactionsfrom employersregardingthesefinancialclaims.Unions usuallystartsuchcollectiveactions• Unionsmustrepresent50%+1oftheemployeesin onecompanyinordertoberepresentativeand partofacollectiveagreement.Inordertostillmake thecollectivenegotiationsaccessibletounions, thelawallowsunionfederationstoparticipatein companylevelcollectivenegotiationsifthey represent7%oftheemployeesintheindustry sector • Employershavetherighttoregulateworking hours,butspeciallegalprovisionslimittheirright• Greatimportancegiventotheformofthe documentsdraftedbytheemployer.Courtcases usuallyinvolveverifyingtheformofthedocuments and a great number of rulings are based only on this aspect• Strictregulationsinindividualandcollective dismissals.Incaseofunlawfuldismissal,the employee has the right to reinstatement and is grantedallfinancialrightsfortheentireperiodin which he was unlawfully dismissed

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TherearelimitedlegalprovisionsonhiringpracticesinRomania.TheLabourCodestatesonlythattheemployeehastobeinformedontheessentialclausesoftheindividualemploymentagreementduringthe hiring procedure. Recognized companies usually implementgoodpracticesinhiringpersonnelandusehumanresourcesspecialistsinordertoselectpotentialhires.Privatecompaniescannotconductbackgroundchecksotherthanrequiringinformationfromthecandidateandrecommendationfrompreviousemployers.Theycanhoweveraskthecandidatetopresent a criminal record issued by the competent authorities.Theemployerhastoaskthecandidateforamedicalcertificatethatascertainsthatthecandidateismedicallyfittobeemployed,sincehismedicalfitnesspriortothesigningoftheagreementisanissueoftheemploymentagreement’svalidity.

Publiccompaniesandpublicinstitutionscanaskthe candidate to present proof of not belonging toapoliticalparty,aproofofnotbeingaformercollaboratorofthecommunistpoliticalpolice(“Securitate”),fiscalinformationandotherspecificinformationthatisrelevanttothepubliccompanyorinstitution.

Privatecompaniescanorganizeatheoreticaland/orpracticalcontestinordertoselecttheiremployees.Asarulepublicinstitutionsandcompanieshaveto organize such contests in order to select the employees.

Usuallyvacantpositionsthataretobefilledbyhiringnewpersonnelareadvertisedinmediaand/oronspecializedon-linesiteswithgeneralaccess.ForpublicinstitutionstherearespecificrulesonpublishingtheavailablejobsontheirownwebsiteandintheOfficialBulletin(localornationaleditions)).TheemployercanaskforaCVandselectonlysomeofthecandidatestomeetwith.Jobinterviewsareheldeitherface-to-face,overthephone,orusinglivevideomessagingtechnology.

Therearenorulesorexpresslimitationsonwhatquestionstheemployercanaskthecandidatebutitisgenerallyacceptedthatthequestionsnotbetoopersonal. also during the hiring process the employer


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ii. hirinG practicEs

hastopayattentionnottodiscriminateanycategoryofcandidates.Howeverthesearenotexpresslystatedrules and there is no case law regarding the hiring processotherthanregardingtheresultsreceivedatthecontest organized by the employer.


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1. MinimumRequirements

As a rule the individual employment contract is anunlimited term contract. However, the individualemployment contract may also be fixed term or parttime.

According to the Romanian Labour Code, any kind ofindividual employment contractmustbe concluded inwriting, intheRomanianlanguageandonthebasisofbothparties’consent(employerandemployee).

Before thebeginningof theemployment relationship,the employer has the obligation to conclude theindividualemploymentcontractandregisteritwiththeemployees’electronicprogram(ReGeS).

Priortotheconclusionoramendmentoftheindividualemploymentcontract,theemployerhastheobligationto inform the person selected for employment or the employee,abouttheessentialclausestobeintroducedin the contract or to be amended.

Amedicalcertificateuponhiringanapplicantrepresentsamandatory requirement forconcludingan individualemployment contract, in order to determinewhetherthe applicant is fit for the job. In case the medicalcertificateismissing,thecontractisnullandvoid.

Theindividualemploymentcontractshallbeconcludedafter the employer performs a preliminary check ofthepersonalandprofessionalabilitiesoftheapplicant.Information about the work performed and thedurationofthework,fromtheformeremployermayberequestedonlyafterhavingfirstinformedtheapplicant.

The individual employment contractmust contain thefollowingprovisions:

• theidentityoftheparties;• theplaceofwork;• theheadquartersordomicileoftheemployer;• theposition/occupationaccordingtotheRomanian ClassificationofOccupationsorotherregulatory documentsandthejobdescription;

• theprofessionalactivityevaluationcriteriaapplied bytheemployer;• thejob-specificrisks;• theemploymentstartdate;• theexpirationdate,inthecaseofalimitedduration ortemporaryemploymentcontract;• theannualentitlementtopaidholidayleave;• theconditionsandthelengthofthenoticeperiod (bothdismissalandresignation);• thecompensationandthepaymentfrequency;• theworkingtime,expressedinhoursperdayand hoursperweek;• thereferencetothecollectiveLabouragreement governingtheworkingconditionsoftheemployee;• thelengthoftheprobationaryperiod.

Besides the essential clauses, the parties may alsonegotiate and include other specific clauses in theindividualemploymentcontract,suchas:a)professionaltraining;b)non-competeclause; c)mobility clause;d)confidentialityclause.

In addition to the general requirements, part-timecontractsmuststatethefollowing:a)theworkingtimeandtheworkingschedule;b)caseswhentheworkingschedulemaybeamended;c)overtimeworkprohibition,exceptforactsofGodorotherurgentworksintendedtopreventtheaccidentsortoremovetheirconsequences.

Thefixedtermcontractsmaybeconcludedonlyforthelimited cases provided by the Labour Code andmustcontain the general imperative information plus thedurationofthecontract.

2. Fixed-term/Open-endedContracts

Open-endedcontractsaretheruleunderRomanianlaw.Thefixedtermcontractsmaybeconcludedonlyforthelimited cases provided by the Labour Code andmustcontain the general imperative information plus thedurationofthecontract.

TheLabourCodestatesthatthesametwopartiescannotsignmorethan3consecutivefixed-termcontracts.Alsothe fixed-term contracts and any extensions cannotexceed a period of 36 months. After this period thecontractistobeconsideredanopen-endedcontract.

iii. EmploymEnt contracts


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3. TrialPeriod

Employment contracts - concludedboth for afixedoropen-ended term,may contain a probationary periodclause.

Inordertoverifytheskillsoftheemployee,thepartiesmay agree upon a probationary period, mentionedwithin the individual employment contract, of amaximum90calendardaysforstandardpositionsandamaximum120calendardaysformanagerialpositions.With respect to disabled persons, the probationaryperiod will be of a maximum 30 calendar days.

Duringorbeforetheendoftheprobationaryperiod,theindividual employment contract may cease based onwrittennotification,withoutmotivationorpriornotice,duetotheinitiativeoftheemployeroremployee.

4. NoticePeriod

Theindividualemploymentcontractmaybeterminatedbytheemployerorbytheemployee.Incase the contract terminates due to the employer’s decision,withtheexceptionof1)dismissalfordisciplinaryreasonsor2)iftheemployeeisarrestedformorethan30days,theemployeeisentitledtoanoticeperiod of no less than 20 working days.

Incasethecontractterminatesduetotheemployee’sdecision,hehastheobligationtorespectanoticeperiodof1)nomorethan20workingdaysforstandardpositionsand2)nomorethan45workingdaysformanagerialpositions.Theemployerhastherighttowaivethenoticeperiodandtoagreetoterminatethecontractduetotheemployee’swill,atanymomentbeforetheendofthenoticeperiod.


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iv. workinG conditions

1. MinimumWorkingConditions

Employers and employees are free to negotiate thetermsandconditionsoftheiremploymentrelationship.However, employees have certain minimum rightsgrantedbythelawandtheparties’negotiationcannotstipulateconditionsorrightsbelowthelegalminimumprovisions. The minimum working conditions andrightsare set forth in theRomanian LabourCodeandthe Collective Agreements, if applicable (in Romaniatheconclusionofacollective labouragreement isnotmandatory).

2. Salary

AsofMay1st,2016,theminimumgrossmonthlywageisLEI1250.00(aboutEUR277.00andUS$310.00)fora168hourworkmonth.Employerscannotpayafull-timeemployeelessthantheminimumgrossmonthlywage.Specialprovisionsapplytopublicservants(therearepublicservantscategoriesthatarepaidlessthantheminimumgrossmonthlywage).

Thenegotiationofthemonthlywageisindividual,asarule.However,somecollectiveagreementsincludeasalaryscalethatappliestodifferentcategoriesofemployees(asaminimum,employeesbeingabletoindividuallynegotiateahigherwage).Forpublicservantstherearesalaryscalesthatareprovidedbylaw.Also,forpubliccompaniestherearesalarycapsthat apply usually to the management of the public company.

Employeescanbegrantedotherbenefits,financialorotherwise,suchastheuseofcompanycar,theuseofothercompanyownedproperty(housing,telephones,laptopsetc.),insurancesotherthanthemandatoryones.FiscaltreatmentofeachbenefitistobedeterminedaccordingtotheFiscalCode(someofthebenefitsareexemptedofallfiscaltaxes,someareexemptedofsomeofthefiscaltaxesandsomeareconsideredtobepartofthemonthlywage).

3.MaximumWorkingWeek

ThemaximumaverageworkingtimeisestablishedbytheLabourCodeandconsistsof40hoursperweekand8hoursperday.Maximumlegalworkingtimeis48hoursperweek,includingovertimehours.

Byexception,themaximumworkinglegaltime,includingovertimemaybeextendedover48hoursperweek,undertheconditionthattheaverageworkinghourscalculatedfora4monthperiod,willnotexceed48hoursperweek.Forcertainactivities,theparties(thesocialpartners,employees’representativesandemployers’representatives)maynegotiateaperiodofmorethan4months,butnotlongerthan12months.

4. Overtime

Overtimework ispermittedonlyupon theemployer’sspecialdemandandtheemployee’sagreement,exceptforcasesofactsofGodorotherurgentworksintendedto prevent or to eliminate the consequences of anaccident.

Overtimeshallbecompensatedbypaidoffhoursduringthenext60days.Ifcompensationisnotpossiblewithinthe60daysmentionedabove,theovertimeshallbepaidtotheemployeebyaddinganadditiontothesalary.Theovertime addition will be established by negotiationthrough the collective labour agreement or individualemploymentcontractanditcannotbelowerthan75%ofthebasesalary.Specialregulationsregardingworkinghoursmake theRomanian legislationstricter than theeuropean one.

employees who are not 18 years old are prohibited from overtimework.Theemployee‘stotalworkinghoursforonemonth,includingovertimeisrecordedinwritingonthe pay slip.

5. Holidays

TheRomanianlawestablishesaminimumdurationof20workingdaysofannualpaidleave.Thesocialpartnersmaynegotiateacollectiveemployment


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agreementthatprovidesmorefavorableconditionsforthe employees.

Theannualpaidleaveperiodisgrantedinproportiontotheactivityperformedinacalendaryearandmustbeusedforatleasttwoconsecutiveweeksduringthesameyear,ifrequestedbytheemployee,andtheremainderoftheweeksmustbeusedoveraperiodof18months.Forthedurationoftheannualpaidleave,theemployeereceivesaleavebenefitwhichcannotbelowerthanthebasicpay,thebenefitsandpermanentextrapaydueforthatperiod,asprovidedforintheindividualemploymentcontract.

Exceptforthecaseofterminatingtheemploymentcontract,anemployercannotreplacetherightoftheemployeestoaminimumannualholidayentitlementwith the payment of the indemnity for the holiday.

Theemployeeisalsoentitledtotakenon-paidleaveforsolvingcertainpersonalproblems.Thedurationofsuchleaveisregulatedbythecollectiveagreementortheinternalregulations.

There are approximately 13 public holidays in Romania andtheworkersareentitledtoremunerationforeach.Since some of the public holidays are religious there arelegalprovisionsthatstatethatpaidholidaysareto be granted to employees of other religions than theChristianOrthodox,consideredmajoritarianinRomania.

6. Employer’sObligationtoProvideaHealthyandSafeWorkplace

Theemployerhastheobligationtoprovideahealthyandsafeworkplace.Ifacollectiveagreementisnegotiated,provisionsonhealthandsafetyaretobeincludedinthenegotiationandintheresultingcontract.GeneralrulesthatapplytohealthandsafetyissuesareprovidedbyLawno.319/2006,butspeciallegalprovisionsonspecificindustriescanalsoapply.Aswestated,amedicalcertificateisnecessarytoconcludetheindividualemploymentagreement.Also,periodicalmedicalcheck-outsaretobeperformedbya specialized doctor. Health or safety incidents are to beannouncedtospecializedpublicauthoritiesthatcaninvestigatetheconditionsofsuchincidents,establishany fault of the employer or the employee and also impose measures to be taken in the future in order for suchincidentstobeavoided.


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1. BriefDescriptionofAnti-DiscriminationLaws

Non-discriminationisfirstlyaconstitutionalrightArticle16oftheRomanianConstitutionprovidingforequalityofallcitizensbeforethelawandpublicauthorities,withoutanyprivilegeordiscrimination.Anti-discriminationlegalprovisions are stipulated in Governmental Ordinance(GO) no. 137/2000 on preventing and sanctioning allformsof discriminationand Lawno. 202/2002on theequality of opportunity and treatment between women andmen.Anti-discrimination legal provisions targetedto employees are stipulated in the Romanian LabourCodeandinLawno.188/1999ontheStatuteofpublicservants.

2. ExtentofProtection

GO no. 137/2000 sanctions any difference, exclusion,restriction or preference based on race, nationality,ethnic origin, language, religion, social status, beliefs,gender, sexual orientation, age, handicap, non-contagiouschronicdisease,HIVpositivestatus,belongingtoadisadvantagedgrouporanyothercriterion,aimingto or resulting in a restriction or prevention of theequalrecognition,useorexerciseofhumanrightsandfundamentalfreedomsinthepolitical,economic,socialand cultural field or in any other fields of public life.Discrimination – being direct or indirect is sanctionedunder the same rules.

In employment law related matters special attentionhas to be paid to discrimination on union affiliation.Also some positive discrimination treatments such asreduced pension age for women, or salary bonusesbasedonsolelytheperiodofservicewereonlyrecentlystopped.

The public authority that handles discrimination isthe National Council for Combating Discrimination.An individual claiming to be discriminated againstcan address the National Council in an administrativeprocedure,or the competent courts. TheNCCD issuesadministrative rulings that canbechallenged in court.Incourtcasesthatincludediscriminationclaims(along

otherclaims),theNationalCouncilisaskedtoissueanopinionontheexistenceofthediscrimination.MostofthetimetheNationalCouncilfailstoprovideananswerintimeandjudgeshavethelibertytoestablishifthereisdiscriminationornot.

Indirect discrimination is defined as any provisions,criteriaorpracticesapparentlyneutralwhichmay disadvantage certain persons on grounds of oneoftheprotectedgroups,exceptwherethesepractices,criteria and provisions have an objective justificationbasedonalegitimatepurposeandthemethodsusedtoreach that purpose are adequate and necessary.

Victimization is defined as any adverse treatmenttriggered by a complaint in general or by a case lodged with the courts of law regarding infringement of the principle of equal treatment and non-discrimination.Protection against victimization is not limited byRomanian law to the complainant but also extends to the witnesses.Asthelawdoesnotdistinguish,victimizationisprohibitednotonlyinrelationtocomplaintsfiledwiththe NCCD but also in relation to those filedwith anyotherpublicorprivateinstitution(labourinspectorate,consumerprotectionofficeetc.).

Nolegaldefinitionand/orlegalprovisionsonaffirmativeactionsatthistime.

As for the sanctions that can be applied in case ofdiscrimination, the NCCD can issue administrativesanctions – administrative warnings and fines, thecourts being the only ones that can award moral compensation.Thecompensationisnotcappedbylegalprovisions,butcourtsusuallyaward reducedamountsasmoralcompensation.

3. ProtectionsAgainstHarassment

Harassmentingeneralisdefinedandsanctionedasanybehaviorongroundsofrace,nationality,ethnicorigin,language,religion,socialstatus,beliefs,gender,sexualorientation, belonging to a disadvantaged group, age,handicap,refugeeorasylumseekerstatusoranyothercriterion, which leads to establishing an intimidating,hostile,degradingoroffensiveenvironment.

V. Anti-DiscriminAtion LAws

Moral harassment is defined as of last year as beinganyimproperbehaviorthattakesplaceoveraperiod,isrepetitiveorsystematicandinvolvesphysicalbehavior,oralorwritten language,gesturesorother intentionalactsthatcouldaffectpersonality,dignityorpsychologicalorphysicalintegrityofaperson.Howeverfewcasesonharassment were registered in Romanian courts.

Sexual harassment, which is tied to a workingrelationship,isacriminaloffence.Foryearsthiswastheonly type of harassment recognized by Romanian law. However in this casealso therehavebeenonlya fewcases registered in Romanian courts.

4. Employer’sObligationtoProvideReasonableAccommodations

Theconceptofreasonableaccommodationforpersonswithdisabilities is not included in theRomanianAnti-discrimination Law and it is currently defined in thespecial legislationon thepromotionandprotectionofthe rightsofpersonswithdisabilitiesbutwithout anyprovisionforsanctions.

Therewerenoincidentsonrestrictionontheemployee’sreligiouspractices,suchaswearingdistinctivereligiousobjectsorworkinghours.AswestatedtheLabourCodeoffers the opportunity to employees of all religionsto benefit of 2 paid holidays for each of the 3majorreligious holidays.

5. Remedies

Incaseofsuspicionofdiscrimination,theemployeecanseekremedies,asstated,eitherofadministrativenature–filingacomplainttotheNCCD,orofcivilnature,filingacasedirectlyinfrontofthenationalcourts.Forsexualharassmentclaims,theemployeecanaddressthepoliceor the public prosecutor’s office. The employee canask theNCCDor the court toestablish that there is acaseofdiscrimination.Both institutions canorder theemployer to stop thediscriminating treatment and totakemeasures in order to avoid similar treatment. Asstated theNCCD can apply fines to the employer if itfindsthat there isacaseofdiscrimination.Thecourtscanoffercompensationiftheemployeeasksforitandprovesthattherewasaprejudicesustainedthatcanbevaluedinmoney.


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1. Cantheemployerrestricttheemployee’suseofInternetandsocialmedia during working hours?

Onobjectivegroundsandwiththeuseofclearinternalprocedures, the employer can restrict the employee’suseofInternetandsocialmediaduringworkinghours.This restriction applies to the use of the Internet andsocialmediaoncompanyprovidedplatforms.Arelevantnationalcasethatwasbroughtalsototheattentionofthe European Court for Human Rights confirmed thatin the case where the employer has strict, clear andobjective rules on the use of the Internet and otherprogramsthatrequiretheuseofInternetsuchasinstantmessagingprograms,thattheemployeeacknowledged,the violation of such rules can result in a disciplinaryactionandeven inadisciplinarydismissal (Barbulescuv.Romania).

2. employee’s use of social media to disparagetheemployerordivulgeconfidentialinformation

If the employeehas any confidential information as aresult of his position within the company, he cannotdivulge such secret with the use of social media. Arecent ruling of a national court established that thesocialmediaisapublicspace,evenifithasrestrictionsonaccess,meaningthatanymentionsonsocialmediaare to be regarded as publicly made. also as a result of thegeneralprincipleofconductingtherelationshipongoodfaith,theemployeeshouldrefraintomakepublicaffirmationsthatcoulddiscredithisemployer.

vi. social mEdia and data privacy


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InRomania,citizensoftheEUortheEEAdonotneedaworkandresidencepermit.Foreigncitizens(whoarenot EU or EEA citizens)must obtain awork permit inorder to perform work.

Theworkpermit is issuedby theRomanianOffice forImmigration.Asarule,theworkpermit is issuedforaone-yearperiod.Thenumberofworkingpermitsissuedeveryyearislimitedandisdeterminedbyagovernmentdecision.

Non-EU and EEA citizens have the right to work inRomaniaunderthefollowingconditions:

• vacanciescannotbefilledbyRomaniancitizens, citizensofUE/EEAorpermanentresidentsof Romania;

• theyfulfillspecialconditionsregardingprofessional qualifications,experienceandauthorization;• theyprovethattheirstateofhealthcomplieswith theactivitytheywillperformandthattheyhavenot beenconvictedofcrimesthatareincompatible withtheactivitytheycarryoutorintendtocarry outinRomania;• theyarewithinthelimitsoftheearlycontingency approvedbygovernmentdecision;• theemployerhasregularlymadecontributionsto thestatebudget;• theemployershalleffectivelyperformtheactivity usedtoobtaintheworkingpermit;• theemployerwasneverconvictedforillegalwork.

vii. authorizations for forEiGn EmployEEs


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viii. tErmination of EmploymEnt contracts1. GroundsforTermination

Under Romanian law, the employment contract mayterminatedejure,bymutualconsentorbynoticegivenbyoneofthetwoparties.

The grounds for dismissal must be real and serious and therearetwotypesofvalidgrounds:

Objective Grounds

• theemployeehascommittedaseriousorrepeated disciplinaryoffencesrelatedtotheLabourdiscipline rulesortheruleswithintheindividualemployment contract,• applicablecollectivelabouragreementorrulesof procedure,asadisciplinarysanction;• theemployeehasbeentakenintopreventive custodyformorethan30days,underthetermsof theCodeofCriminalProcedure;• bydecisionofthecompetentmedicalexamination bodies,aphysicaland/ormentalinabilityofthe employeeisfound,notallowinghim/hertofulfill thedutiescorrespondingtothepositionheld;• poorperformanceorunsatisfactoryprofessional skills.

Economic Grounds

a dismissal for reasons not related to the person of the employee is the termination of the individualemployment contract determined by the cancellationoftheemployee’sposition,foroneorseveralreasons,which are not connected to the employee’s person. The cancellation of the workplace must be effective andhavearealandseriouscause.

Thedismissal foreconomicgroundsmaybe individualorcollective.

2. CollectiveDismissals

The collective redundancy is the dismissal, within atimeframeof30calendardays,oneconomicgrounds,of:

• atleast10employees,outofatotalofbetween20 and100employees;• atleast10%oftheemployees,outofatotalof between100and300employees;• atleast30employees,outofatotalofmorethan 300 employees.

When the employer intends a collective redundancy,it shall initiate, in reasonabletimeandwithaview toreaching an agreement, under the terms provided bythe law, consultationswith the trade union or, as thecasemaybe,withtherepresentativesoftheemployees.

During the consultations, the employer provides thetrade unions or the employees’ representatives withthe relevant information related to the redundancy.Theemployermust forwarda copyof thenotificationto the Territorial Labour Inspectorate and the localpublicemploymentofficeonthesamedateithasbeenforwardedtothetradeunionor,asthecasemaybe,totherepresentativesoftheemployees.

Thetradeunionortherepresentativesoftheemployeesmay propose the employer measures to avoid thedismissals or to reduce the number of dismissed employees, within 10 calendar days after receivingthenotification.Theemployermustgiveawrittenandgroundedanswertotheproposalswithinfivecalendardaysfromtheirreceptionoftheemployee’sproposals.

When,followingtheconsultationswiththetradeunionortherepresentativesoftheemployees,theemployerdecidestoapplythecollectiveredundancymeasure,henotifiesinwritingtheTerritorialLabourInspectorateandthelocalpublicemploymentoffice,atleast30calendardays before issuing the dismissal decisions.

If, in 45 calendar days since the dismissal date, theactivities whose interruption led to the collectiveredundancyareresumed,theemployermustsendthedismissedemployeesawrittencommunicationforthispurpose and reinstate them in the same workplace as before,withoutanyexamination,contestorprobationaryperiod. The employees have a deadline of maximum5calendardays fromthenotificationof theemployer


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to express their written agreement on the proposedworkplace. If the employees that are entitled to bereinstated,donotagreeinwritingwithinthedeadlineor refuse the workplace provided, the employer mayemploynewpersonnelforthevacantpositions.

3. IndividualDismissals

Fortheobjectivegroundsdismissal,theemployermustrespectthespecificprocedurestipulatedbytheLabourCode. Incaseofdismissal fordisciplinary reasons, theemployer must follow the preliminary investigation,in order to establish the breach of the employment contract’s provisions or of the internal regulations. Incaseof dismissal for poorperformance, theemployermust first establish the grounds by the evaluationprocedure.

In all cases, the employer must issue the dismissaldecision within 30 calendar days since the date the employer acknowledged the cause of the dismissal.

a. is sEvErancE pay rEquirEd?

Severance pay for individual dismissals is to be paidonlyifitisagreedassuchintheindividualorcollectiveemploymentagreement.TheonlytimethattheLabourCode states that a severance payment (not specifyingtheamount)shouldbenegotiatedisforphysicaland/ormentalunfitnesstoperformtheactivityrequiredbythejobdescription.TheLabourCodeonlystatesthatsuchcompensation should be negotiated in the collectiveemploymentagreements,meaningthatintheabsenceof such an agreement, the employer cannot bemadetopaytheemployeeanyamountuponhistermination.

4.SeparationAgreements

a. is a sEparation aGrEEmEnt rEquirEd or considErEd BEst practicE?

A separation agreement is neither required norconsidered best practice in Romania. There are nospecific legal provisions on separation agreements.Usually some form of separation agreement canbe found when both parties agree to terminate theworking relationshipand theyneed tomakeclear theconditionsofthetermination.Howevertherearecaseswhentheemployeeviolatesthetermsoftheseparationagreement, especially when it is stated that theemployee will not bring any claim in front of the courts.

B. what arE thE standard provisions of a sEparation aGrEEmEnt?

Notbeingausualprocedure inRomania,therearenostandardprovisionsforseparationagreements.Howeverallclausesmustbeinaccordancewithimperativelegalprovisions.Alsotheymustincludeamoralcause,asinallcivilagreements.

c. doEs thE aGE of thE EmployEE makE a diffErEncE?

The age of the employee usually doesn’t affect theworkingrelationshipapartfromthecaseofreachingtheageoflegalpensioningwhentheindividualemploymentagreementendsdejure.

d. arE thErE additional provisions to considEr?

No.

5.Remediesforemployeesseekingtochallengewrongfultermination

The employees seeking to challenge wrongful terminationcanfileaclaimincourtagainsttheemployer.TheTribunalasfirstinstancecourtwillanalyzethecausefordismissal,theformofthedismissaldecisionandthecorrectobservationofanymandatorylegalprocedure.If the Tribunal finds that the dismissal decision is notlegalorhasnogrounds(thisbeingararermotiffortheannulment of the dismissal decision), a court rulingannulling the dismissal decision is issued. The employee willbe reinstated (automatically ifhe/sheasked tobereinstated and the dismissal was found illegal or without grounds) and is entitled to payment of all financialrightshe/shewouldhaveobtained ifhe/shewerenotwrongfully dismissed. The Tribunal decision is subjectto an appeal. However the decision of the Tribunal isenforceable meaning that in some cases if the employee winsinfirstinstanceandlosesonappeal,theemployerhastotakeadditionalmeasuresinordertoobtaintheamounts already paid.


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iX. rEstrictivE covEnants

1. DefinitionofRestrictiveCovenants

There is no legal definition given by the Romanianlegislationtorestrictivecovenants.Howeversomelegalprovisionsallowtheinclusionofspecificclausesintheemployment agreements that can offer a guaranteeof good will between the parties. Also, some legalprovisions sanction directly, without the existence ofanycontractualclauses,aninappropriateconductoftheemployee with regards to his actual or former employer.

2. TypesofRestrictiveCovenants

A. non-compete cLAuses

Whennegotiatinganindividualemploymentagreement,orduringtheexistenceofsuchanagreement,thepartiescanagreeuponanon-competeclausefortheemployee.AccordingtoRomanianlaw,suchclauseswillbeenforcedonly after the employment agreement is terminated(except for cases when the contract is terminated bythe employer for reasons that are not related to the employeeandsomeofthedejureterminationcases).Duringtheexistenceoftheemploymentrelationshipitisconsideredthatanon-competeobligationisimplied,theemployeehavingtofulfillhisdutiesshowinggoodwill.Inadditiontheemployeehasafidelityobligationtohisemployerthatalsocoversrefrainingfromaconductthatmightbeconsideredasunfaircompetition.

AccordingtotheRomanianLabourCode,whenagreeinguponanon-competeclause,theemployeeassumestheobligation not to perform any activities that could beconsideredascompetitiontohis/herformeremployee,in his/her own interest or in the interest of a third party.

The non-compete clause is a monthly paid clause,legal provisions stating the minimum amount thattheemployerhas topay inorder toenforce thenon-compete clause. according to the Romanian labour Codethenon-competeindemnitycannotbelowerthan50%of the gross salary the employee had during thelast 6months of his employment (or of entire periodof employment if the agreement was in force for less than6months).Partiescannegotiateahigherpaidnon-compete clause.

The maximum period for the non-compete clause is2years.Also, thenon-competeclausehastobeclear,meaningthatwhennegotiatingsuchaclausethepartieshavetostatewhatexactactivitiesareprohibited,whoarethethirdpartiesforwhichtheactivityisprohibitedand also the geographic area of the prohibition. Theemployer has to keep in mind that imposing a non-compete clause that restricts the possibility for the former employee to perform any paid activity is tobe considered as a disproportionate restriction of hisconstitutionalrighttowork.

b. non-soLicitAtion of customers

Therearenoexpresslegalprovisionsthatregulatethenon-solicitation of customers. However the Law oncombating unfair competition sanctions the diversionof the clientele by a current or former employee or his representatives by using commercial secrets thatbelongtothecompany,ifthecompanytookreasonablemeasuresinensuringtheprotectionofsuchsecretsandthe revealing of such secrets might cause damage tothecompany.Suchconductmay leadtoafinefor theemployee.

Someadditionalclausesonnon-solicitationofcustomersmightbe included in theemploymentagreement,notexpressly prohibited, but the employer has to alwayskeepinmindthatanysuchclausesmustbereasonable,clearandenforceable.Inanycourtcaserelatedtotheenforcement of such clause the judge will take intoaccount the proportionality of themeasures that theemployer wants to impose with the damage that the employee’s conduct might cause to the employer’s activity.

c. non-soLicitAtion of empLoyees

There are no legal provisions that regulate the non-solicitation of employees. However, given the generalwording used by the fair competition legislation, thisconductmightfallundertheunfaircompetitionconductthatcanbesanctionedbytheadministrativebodiesthatmonitorcompetitioninRomania.


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3. EnforcementofRestrictiveCovenants—processandremedies

The employer can choose to enforce or not the non-compete clause in the employment agreement,whenthe agreement is terminated. As a rule it is advisableto inform the former employee that the clause will not beenforced,inorderforhimtoknowthathisconductwillnotberestricted inanyway. Ifhe isnot informedand the indemnity is not paid he can sue the former employer for thepaymentof the indemnity.However,hehastoprovethatherefrainedfromalltheprohibitedactivitiesasstatedintheclause.

If the employee does not respect the non-competeclause, the employer can sue for the entire amountof the indemnity paid plus any damages the former employeemighthavecausedtotheformeremployer.

Also, the former employee or the local labourinspectoratecanaskthejudgetodiminishtheeffectsofthenon-competeclause.

In case of conduct that might fall under the faircompetition legislation, the interestedparty canfile aclaim with the Competition Council that will analyzethe conduct and establish if there is a case of unfair competition. The Council can issue administrativesanctions – fines. Also the company that suffers animminentprejudiceduetoanactofunfaircompetitioncanaskthecourttoimposetheobligationonthepartythatcausestheprejudice(includinghiscurrentorformeremployee) torefrain fromtheconductresponsible forthe damage.

Incaseofbreachofanyothersimilarclausesincludedin the employment agreement the party that wants to enforce the clause has to address the court.

4. UseandLimitationsofGardenLeave

GardenLeaveisnotregulatedunderRomanianlaw.Iftheemploymentisterminatedandtheemployerdoesn’t require the presence of the employee during the noticeperiodhecanasktheemployeetonotperformworkduringthenoticeperiod.Incaseofresignationtheemployercanwaivehisrighttobenefitfromthenoticeperiod,meaningthathecanagreefortheemployeetostopworkingimmediately(andnotpay

theemployeeanymore).Howeverincaseofdismissalthe employer has to be careful in forcing the employee nottoworkduringthenoticeperiodsincetheemployerstillpreserveshisconstitutionalrighttowork.Somecollectiveemploymentagreementshaveprovisionsthat allow the employee that was dismissed to perform work only for half of the normal working hours during thenoticeperiodinorderfortheemployeetobeabletoactivelyseekemployment(inthiscaseitisuptotheemployeeifhewantstobenefitfromthiscontractualclause).


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X. riGhts of EmployEEs in casE of a transfEr of undErtakinG1. employees’ Rights

The transfer of an undertaking, business or part of abusinesstoanewownerbyagreementissubjecttotheLabourCodeandLawno.67/2006.Thelegalprovisionsgrantastrongprotectionfortheemployeessubjecttothe transfer.

Priortothetransfer,boththesellerandthepurchaserhavetheobligationtoconsulttheirtradeunionsortheemployees’representativeswithrespecttothejudicial,economicandsocialimplicationsrelatedtothetransferof undertaking.

Alloftheseller’sexistingrightsandobligationsarisingfrom the employment contracts and collective labouragreementswillbetransferredtothepurchaser,exceptforcaseswhentheseller issubjecttorestructuringorinsolvency procedure. Nevertheless, the transfer ofundertakings cannot be a reason for the individual orcollectivedismissalofthetransferredemployeesbytheseller or purchaser.

2.RequirementsforPredecessorandSuccessorParties

According to Law no. 67/2006, the seller has theobligation to notify the purchaser about all the rightsandobligationsthataretransferredbetweenparties.

The purchaser is bound by all rights and obligationsresultingfromtheexistingemploymentcontractsatthetimeofthetransferandhastheobligationtomaintainalltherightsuntilthecontractsexpireorareterminated.Beginningoneyearfollowingthetransfer,thepurchaserhasthepossibilitytorenegotiatethecollectiveclauseswiththeemployees’representatives.


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Xi. tradE unions and EmployErs associations1. BriefDescriptionofEmployeesandEmployersOrganizations

In Romania, employees and employers organizationsarestructuredasprivateassociationsgovernedbytheLaw no. 62/2011 regarding the social dialogue. Everyemployee has the right granted by the Constitutionand by the Romanian Labour Code, to constitute ortobecomeamemberofatradeunion.Inordertosetupatradeuniontheremustbeat least15employeeswithin the same company. a person cannot be part ofmore than one trade union organizationwithin anemployer at the same time. Certain persons, such aspublicofficials,membersof themilitaryandmembersof certain government ministries, are not allowed toestablish a trade union.

Employees‘andEmployers’Organizationsarestructuredby level starting fromthecompany level,where thereareunionsasorganizations,sectorlevelwherethereareemployers’organizationsandunionfederationsandthenationallevelwherethereareemployers’organizationsandunionconfederations.

2.RightsandImportanceofTradeUnions

The representative trade union is entitled to receivefrom employers any necessary information for thenegotiation of the collective labour agreementsand other agreements related to the employment relations. Since a union needs 50%+1 employee tobe representative, Romanian law also allows unionfederationsthatarerepresentativeatthesector’slevel(representingatleast7%oftheemployeesinthesector)toparticipateincollectivenegotiationsatthecompanylevel representing an affiliated union. Since the lawdoesn’t restrict the number of unions within a company andinsomesectorsthereareatleast3representativeunion federations, a company might negotiate withmorethanoneUnionFederation.

The trade unions play a key role in collectivebargaining, but they also have significant consultation

and information rights. Also, based on a specificempowerment from their members, trade unionshavetherighttoregisterpetitionsandtosustaintheirmembers’ interests in front of the tribunal.

3.TypesofRepresentation

If there are not any representative unions within thecompanyandthecompanyisonethatneedstonegotiateacollectiveemploymentagreement,employeeshavetoappointrepresentativesforthenegotiation.

4.NumberofRepresentatives

There are no rules on howmany representatives aretobeappointed,but Lawno. 62/2011 states that theemployer and the employees agree on the number of representatives taking into account the numberof employees (if the company has a large number ofemployees that perform various types of activitiesin different geographical areas, the number ofrepresentativewillbehigher).Thecommonpracticeistoappoint3representatives.

5.AppointmentofRepresentatives

There are no clear rules on how the appointment should bemade.Howeveritisspecifiedthattherepresentativeshavetohavethevoteofat least50%+1employees inthecompany.Also,inordertoensurethecorrectnessoftheappointingproceduretheemployershouldreduceto a minimum the interference in the appointment process.Theemployeeshavetofindawaytoorganizethemselvesinordertoappointtherepresentatives.

6.TasksandObligationsofRepresentatives

Themandateoftherepresentativesisestablishedduringthe appointment process and it is limited to a maximum of 2 years. The employees give their representativesmandate to participate in the collective negotiationof specific terms. The representatives will participate

in the collective negotiations and sign the collectiveagreement.

7. Employees’ Representation inManagement

The representatives have some of the rights therepresentativeunionshaveingainingaccesstorelevantinformation and being consulted in specific matters(suchaswhentheemployerwantstoimplementanewinternalregulation).


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EuropeanlegislationonworkscouncilwastransposedinRomanianlegislation,butfewcompaniesactuallyhavesuchrepresentativebodies.Theroleofworkscouncilintheemployer-employeerelationshipisreduced.Mostoftherightsthattheworkscouncilshaveinvolveonlyreceivingpriorinformationfromthecompanyonimportantmatters.

Xii. othEr typEs of EmployEE rEprEsEntativE BodiEs

Healthandsafetycommitteeshaveanimportantnegotiationrole.Theemployer’srepresentativesandtheemployees’representativesdiscussandagreeuponhealthandsafetymeasures,butalsoonsocialandeconomicmatterswithinthesestructures.


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Xiii. social sEcurity / hEalthcarE / othEr rEquirEd BEnEfits1. legal framework

InRomaniatherearemandatorypensions,healthcare,unemployment common national systems that applyto all employees and employers. There are mandatory contributionsmadetoeachof thesesystems,bothbytheemployeesandtheemployer.Also,thesystemscoverpredeterminedbenefitsfortheemployees.Thenationalpension system is regulated by law no. 263/2010. The national healthcare system is regulated by a seriesof specificnormativeacts suchas theFiscalCodeandGovernmentalOrdinanceno.159/2005.Unemploymentindemnity is regulated by law no. 76/2002.

2.RequiredContributions

For the employer, the required monthly contributionsare:

• Forthepensionsystem–15,8%oftheemployee’s incomefornormalworkingconditions,20,8%ofthe employee’sincomeforparticularworkingconditions and25,8%oftheemployee’sincomeforspecial workingconditions• Forthehealthcaresystem–5,2%oftheemployee’s incomeplusanadditional0,85%oftheemployee’s incomeformedicalleaveindemnitiesand0,15%- 0,85%oftheemployee’sincomeforworkaccidents and professional illnesses• Fortheunemploymentfound–0,5%ofthe employee’s income• Fortheguaranteefund–0,25%oftheemployee’s income.

For the employee, the required monthly contributionsare:

• Forthepensionsystem–10,5%oftheemployee’s income;• Forthehealthcaresystem–5,5%oftheemployee’s income;• Fortheunemploymentfound–0,5%ofthe employee’s income

3.Insurances

Apartfromthemandatorycontributionsthatwereferredtopreviously therearenoothermandatory insurancesthat the employer is required to provide. Additionalhealthandlifeinsurancecanbeprovidedbytheemployerasabenefit.Thefiscalregimeofsuchbenefitstakesintoconsiderationtheamountpaidbytheemployer.

4.RequiredMaternity/Sickness/Disability/AnnualLeaves

Romanian legislation states aperiodof 126mandatorymaternity leavedays, ofwhich63days canbegrantedbeforetheduedateand63daysaftertheduedate.Theemployeecanreceivemorethan63daysforeachoftheperiods,buthastobenefitfromatleast42daysofleaveafter the due date. The maternity leave is considereda medical leave, the employee’s physician being thedecidingfactorinhowthedaysaredividedbetweenthetwo periods.

Apartfrommaternityleave,parentscanalsobenefitfromapaidleaveforraisingtheyoungchilduntiltheageof1or2years.Duringthisleaveperiodtheparentreceivesanindemnity that is a percentage of the income the parent hadpriortothe leaveperiod. Incentivesaregrantedtoparents that return towork after only 11months. Theindemnity is not paid by the employer.

Medical leave is granted to the employee if the illnessprevents him/her from performing his/her activity.Disabilityleavecanbeaformofmedicalleaveoraformofpension,dependingonthetypeofdisability(peoplewithpermanentdisabilities thatcannotworkbenefit fromaspecialtypeofpension).Themedicalleaveindemnityispaid by both employer and the state healthcare system dependingonthenumberofdaysofmedicalleave.First5daysofmedicalindemnityarepaidbytheemployerandthe rest of the period by the state healthcare system. The indemnity is a percentage of the income of the employee.

Employees have the right to benefit from a minimumof 20 working days of paid annual leave each year.Compensation with financial benefits is only allowedin case of the termination of the employment. Theemployerhas toensure thatemployeebenefits fromacontinuousperiodof10consecutiveworkingdaysofpaidannualleave.

5.MandatoryandTypicallyProvidedPensions

ThemandatorycontributiontothepensionsystemcoversinRomania2Pylonsof thepension system– the stateprovided pension (Pylon 1) and themandatory privatepension(Pylon2).Inordertofundthesetwopylonsthemandatory pension contribution of both the employerandtheemployeearedividedbetweenthestatepensionsystemadministrator andprivate insurance companies.The percentage of the mandatory contribution that isgiventoprivateinsurancecompaniesisverylow–5%in2015.


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In addition to these 2 mandatory pylons the pensionsystem in Romania recognizes 2 more pylons. Pylon 3or the individual facultative pension system allows theemployeetocontributetoaprivatepensionsystemwithupto15%ofhismonthly income,whilepylon4allowstheemployeetocontributetoaprivatepensionsystemwithoutanylimitstothecontributions.Pylon4pensionplansusuallyincludelifeinsurance.Pylons3and4arenotmandatory. The employer canoffer the employees thebenefitofoneofthesefacultativeinsurances.

In addition to contributions to the national healthcaresystemtheemployercanoffertheemployeesthebenefitofprivatehealthorlifeinsurance.


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The firmMagda Volonciu& Asociatii has an excellentreputation both in the national and internationalmarketandisratedasthebestlawfirmspecialisinginlabour lawand industrial relations inRomania.Duetothe professionalism, seriousness, devotion, and teamspirit that characterises the law firm, it is recognisedbyspecialisedinstitutionsfromallovertheworld(TheLegal 500 andChambers andPartners Europe, amongothers) and is consistently ranked as a leader in theemployment law market in Romania.

The firm’s excellence extends to all aspects ofemployment law, but is especially renowned forcollectivelabouragreementsandconflictmanagement.Thefirmrepresentsanimpressiverangeofinternationalclients such as OMV Petrom, Rompetrol -Kaz MunayGas, ArcelorMittal, CSCT – DPWorld and BCR – ErsteGrup.ThefirmregularlyassistsmajorcompanieswithdiscussionsforthemodificationoftheRomanianLabourCodeandothernormativeactsintheemploymentlawarea.

MagdaVolonciuandAssociatesprovidesrepresentationinallcourtsinthecountryaswellastheConstitutionalCourt and the authorities and specialized institutions(e.g. the conciliation, mediation and arbitrationorganized by theMinistry of Labour and theNationalCouncilforCombatingDiscrimination).

The firm puts a great emphasis on developingoutstanding relations with its clients, protecting theirinterestsandkeepingtheminformedatalltimesaboutthe legaldevelopments inthe labourfield, through itse-servicesanddirectcommunication.

maGda volonciu & asociatiil&E GloBal romania

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This memorandum has been provided by:MagdaVolonciu&AsociatiiWorldTradeCentre10MontrealSquare1stFloor,Sector1Bucharest,RomaniaP+4.0372.755.699

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2017

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EmploymEnt law ovErviEw 2017 - L&E Globalknowledge.leglobal.org/wp-content/uploads/LEGlobal_Memo_Romania… · 3. legal framework employment law in Romania is mainly based on the