Tepes Ana - Employer - Employee Relationship (Contract Terms - In Terms of the Employer)

8/6/2019 Tepes Ana - Employer - Employee Relationship (Contract Terms - In Terms of the Employer)

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Transilvania University of BrasovEconomics FacultyBusiness Administration

1st

year2nd groupBusiness Law project work

Employer employee

relationship(Contract terms in terms of theemployer)

Student: Tepes Ana Ionela

Coordinator: Prof. Alexis Daj


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Table of contents

I. Introduction 3

II. Individual and Collective Labour Agreements4

II. 1. Individual Labour Contract4

II. 1. 1. Legal provisions regarding the

form of the employment agreement5

II. 1. 2. Information on contract terms5

II. 1. 3. Special terms8

II. 1. 4. Main rights and obligations of the employer9

II. 1. 5. About posting11

II. 1. 6. Suspension of the individual employmentcontract 11

II. 1. 6. 1. Suspension de jure11

II. 1. 6. 2. Suspension on the initiative of theemployee 12

II. 1. 6. 3.Suspension on the initiative of theemployer 13

II. 1. 7. Dismissal13

II. 2. The Collective Labour Agreement17

II. 2. 1 Prohibited and minimal


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clauses in the collective labour agreement17

II. 2. 2. Coverage of the effects of collective workagreement 18

II. 2. 3. Other specifications18

III. Conclusions 20

IV. References 21


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I. Introduction

As a manager, you dont want to cause your company or yourself

unnecessary legal complications, such as lawsuits for wrongful

termination. More positively, you need to know what latitude the law does

and does not give you in your efforts to build and manage the best

possible workforce.

All too often there are cases of managers who are frustrated with the

legal system. After frequent interactions with human resources

professionals, management consultants, and attorneys, managers end up

believing that the law requires them to hire a certain job candidate even

though another candidate is far more qualified, that they cannot discipline

the employee who spends more time out of work because of illness than at

work, or that the law prevents them from firing an employee whose

performance is lousy.

All of these beliefs are fallacies. With a proper understanding of the

law, managers can hire the most qualified workers. Managers can

discipline employees for unreasonable absences. And managers can fire

employees who cannot or will not perform the critical functions of their

jobs.

As a manager, you can always get specific advice for some issuethat confronts you, and often you should. On the other hand, you dontwant to run up the cost, whether in time or money, of seeking professionalcounsel every time a employment question arises that might have legalimplications.

To manage efficiently, you need an internal compass that can guide

much of your everyday decision making and let you know when you really


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need to get expert advice. Developing that internal compass is possible,only if you know certain contract terms that advantage you.


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II. The Individual and Collective Labour

Agreements

II. 1. The Individual Labour Contract

Hiring Romanian employees implies signing an Individual Labour

Agreement and depending on certain factors, a Collective Labour

Agreement. The Individual Labour Agreement is a specially regulated

agreement concluded in written form with each respective employee. This

type of agreement is formed of 2 parts, respectively:

1) A mandatory part which contains the rights and obligations

expressly stipulated by the law in effect and

2) A conventional part which contains rights and obligations

established by the parties.

An Individual Labour Agreement shall contain clauses related to thefollowing issues:

a) Duration of Contract The rule is to conclude the Labour

Agreement for an undetermined period of time, however signingAgreements for determined periods of time can be done as an exception;

b) Working Location City and Unit where actual work takes place;

c) Type of Work;

d) Working Conditions;

e) Salary;

f) Working Hours.

Besides the above, the Individual Labour Agreement can contain

specific clauses related to professional formation of employees, mobility,

confidentiality etc.

The Individual Labour Agreement must be registered by the employer with

the Romanian Local Labour Inspectorate within 20 days from the date is

has been signed.


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II. 1. 1. Legal provisions regarding the form of the

employment agreement

Any individual employment contract must be concluded on the basis

of the parties written consent, in the Romanian language. The employer is

the one who has the obligation to conclude the individual employment

contract in a written form. However, a legal person, a natural person

authorized to perform an independent activity or a family association

acting as an employer has to conclude the individual employment contract

in writing, before the beginning of the employment relationships.

If the individual employment contract has not been completed inwriting, it is presumed to be of unlimited duration, and the parties may

prove by any other type of evidence the contractual provisions and the

services provided.

II. 1. 2. Information on contract terms

Before concluding the individual employment contract, the employerhas the obligation to inform the selected person for employment/the

employee on the essential clauses that are going to be introduced in thecontract or to be amended. The obligation to inform the selected personfor employment/employee shall be deemed to be completed by theemployer on the signature of the individual employment agreement.

The minimum of information the employer must give to theemployee, as provided for in Art. 17, paragraph 2 of the Labour Code,consists of:

a) the identity of the parties;

b) the workplace or, in the absence of a permanent workplace, thepossibility of working in several places;

c) the headquarters or, as appropriate, the domicile of the employer;

d) the position/occupation according to the Romanian Classificationof Occupations or other regulatory documents and the job description;

e) the job-specific risks;

f) the date when the contract takes effect;


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g) in the case of an employment contract of limited duration or of atemporary employment contract, its respective length;

h) the length of the leave the employee is entitled to;

i) the conditions under which the contracting parties may give noticeand its length;

j) the basic pay, other components of earned income, and thepayment frequency for the wage the employee is entitled to;

k) the normal length of work, expressed in hours per day and hoursper week;

l) the reference to the collective labour agreement governing theworking conditions of the employee;

m) the length of the probationary period.

These pieces of information must also appear in the individualemployment agreement. Any amendment to one or more of them requirethe conclusion of an addendum, within at most 15 days from the writtennotification of the employee, except on the condition that suchamendments are made possible by the law or by the applicable collectivelabour agreement.

During negotiating, concluding or amending the individual employment

contract, each party may be assisted by third parties.

If the selected person for employment or the employee is going to performactivity abroad, the employer has the obligation to communicate it in goodtime, before the departure, the information provided for in Article 17,paragraph 2, and information on the following, as Art. 18, paragraph 1provides:

a) the length of the work to be performed abroad;

b) the currency of wage payment, and the payment methods;

c) the benefits in money and/or in kind related to the activity performedabroad;

e) the climatic conditions;

f) the main labour law regulations in that country;

g) the local customs whose breach would endanger his/her life, freedom orpersonal safety;

h) employee repatriation conditions, as the case may be.


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The first three points must also be included in the individualemployment contract.

These provisions shall be supplemented by special laws governingthe specific conditions for working abroad.

In case the employer does not fulfil its obligation of information, asprovided for in Articles 17 and 18, the employee is entitled to appeal,within 30 days from the failure to fulfil that obligation, to the competentcourt and seek redress according to the damage incurred following theemployers failure to inform.

Besides the essential clauses provided for in Article 17, other specificclauses in the individual employment contract can be included by the

parties.

Art. 20, paragraph 2, of Labour Code:

The following shall be considered specific clauses, while theenumeration is not meant to be limitative:a) clause on vocational training;b) non-compete clause;b) mobility clause;b) confidentiality clause.

While concluding the individual employment contract or during itsperformance, the parties may also negotiate and include a non-competeclause in the contract, which requires the employee, after the cessation ofthe contract, to abstain from performing, in his or her own interest or for athird party, an activity competing with that performed for the employer,against a monthly non-compete benefit the employer undertakes to payduring the entire non-compete period.

This term can only take effect when the activities prohibited to theemployee upon the cessation of the contract, the amount of the monthly

non-compete benefit, the time limits of the non-compete clause, the thirdparties for whom it is prohibited to perform activities, and thegeographical area where the employee may reasonably compete with theemployer, have been specifically provided for in the individualemployment contract.

The monthly non-compete benefit owed to the employee may not bea wage-like benefit, it is to be negotiated and shall amount to at least 50%of the average gross wage income of the employee during the previous sixmonths before the cessation of the employment contract or, if the durationof the individual employment contract was less than six months, of theaverage gross wage income owed to him/her during the contract. The non-compete benefit has to be an expense made by the employer, deductible


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when calculating the taxable income, and the tax shall be collected fromthe beneficiary natural person, according to the law.

The non-compete clause may take effect for a period of maximum 2years from the cessation of the individual employment contract.

These provisions do not apply when the cessation of the individualemployment contract occurred de jure, except for the cases provided forin Article 56 (d), (f), (g), (h) and (j), or on the initiative of the employer, forreasons not related to the employee.

II. 1. 3. Special terms

~ Art. 25 of Labour Law Mobility clause:

Under the mobility clause, the parties to the individual employmentcontract shall provide that, taking into account the specificity of the work,the employee would not perform the job in a single workplace. In suchcase, the employee shall enjoy supplementary benefits, in money or inkind.

~ Art. 26 of Labour Law Confidentiality Clause

(1) Under the confidentiality clause, the parties shall agree, for theentire length of the individual employment contract and after its cessation,to refrain from disclosing data or information they took knowledge ofduring the performance of the contract, under conditions laid down inrules of procedure, collective labour agreements or individual employmentcontracts.

(2) Breach of this clause by any of the parties shall incur theobligation of the liable party to pay damages.

~ Art. 30 of Labour Law:

(1) The employment of employees with public institutions, publicauthorities and other government units can only take place by contest orexamination, as appropriate.

(2) The vacancies on the organization chart shall be open to contest,according to the needs of every organization provided for in paragraph (1).


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(3) When no more than one applicant registers for the contestorganized to fill in a vacancy, the employment shall be decided by anexamination.

(4) The conditions for the organization and carrying out of the

contest/examination shall be laid down in a regulation approved byGovernment Decision.

~ Art. 31 of Labour Law probationary period

(1) With a view to verifying the skills of the employee, aprobationary period of maximum 30 calendar days for the operational

positions and maximum 90 calendar days for the managerial positionsmay be agreed upon at the conclusion of the individual employmentcontract.

(2) The verification of the professional skills when employingpersons with disabilities shall take place exclusively in the form of aprobationary period of maximum 30 calendar days.

(3) For unskilled workers, the probationary period shall have anexceptional character and shall not exceed five working days.

(4) The graduates of higher education institutions shall beemployed, at the beginning of their career, under a probationary period ofmaximum six months.

(41) During or at the end of the probationary period, the individualemployment contract may only cease by a written notification, on theinitiative of any party.

(5) During the probationary period, the employee shall enjoy allrights and duties provided for in the labour legislation, the collective

labour agreement, the rules of procedure and the individual employmentcontract.

II. 1. 4. Main rights and obligations of the employer

As provided for in Art. 40 :


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(1) An employer shall have, mainly, the following rights:

a) to lay down the organization and operation of the unit;

b) to establish the corresponding tasks of each employee, under theterms of the law and/or the applicable collective labour agreement,concluded at national level, branch level or group of employers level;

c) to issue orders with a compulsory character for the employee,subject to their legality;

d) to exert control over the performance of the tasks;

e) to assess the disciplinary offences and apply the correspondingpenalties, according to the law, the applicable collective labour agreement

and the rules of procedure.

(2) An employer shall have, mainly, the following obligations:

a) to notify the employees of the working conditions and of issuesrelated to the employment relationships;

b) to permanently provide the technical and organizational

conditions taken into account when preparing the work standards and thecorresponding working conditions;

c) to ensure the employees all rights under the law, applicablecollective labour agreements and individual employment contracts;

d) to regularly notify the employees of the economic and financialsituation of the organization, except for sensitive or classified informationwhose disclosure is likely to harm its activity. The frequency of thenotifications shall be established by negotiation within the applicablecollective labour agreement;

e) to consult the trade union or, as appropriate, the representativesof the employees on the decisions liable to substantially affect their rightsand interests;

f) to pay all contributions and taxes due, and to retain and transferthe contributions and taxes owed by the employees, under the terms ofthe law;

g) to establish the general employee register and enter the dataprovided for in the law;


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h) to issue, upon request, all documents stating the employeequality of the applicant;

i) to ensure the confidentiality of the employee data having a privatecharacter.

II. 1. 5. About posting

A posting is an act by which the employer directs the temporarychange of the workplace to another employer, for the performance ofcertain works in its interest. By way of exception, the type of work may bechanged during the posting, but only with the written agreement of theemployee.

A posting may be directed for a period of maximum one year. theperiod may be extended every six months, only with the agreement ofboth parties, for objective reasons that require the presence of theemployee with the employer where the posting was directed. Theemployee has the right to refuse the posting directed by the employeronly by way of exception and for duly justified personal reasons. Anydelegated employee has the right to the payment of transport andaccommodation expenses, and a delegation benefit, under the termsprovided for in the law or the applicable collective labour agreement.

II. 1. 6. Suspension of the individual employment contract

The suspension of the individual employment contract is possible byagreement of the parties or through a unilateral act of one of the parties.In consequence, the employee will suspend the provision of work and theemployer will suspend the payment of the wage. During the suspension,other rights and the obligations of the parties may persist. They should bespecified in special laws, in the applicable collective labour agreement, inindividual employment contracts or in the rules of procedures.

In case of individual employment contract suspension because of anact attributable to the employee, the latter will not enjoy any right arisingfrom the quality of employee during the suspension.

II. 1. 6. 1. Suspension de jure

As provided for in Art. 50 of Romanian Labour Code:


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An individual employment contract shall be suspended de jure in thefollowing cases:

a) maternity leave;

b) temporary disability leave;

c) quarantine;

d) fulfilment of the compulsory military service;

e) exercise of a function within an executive, legislative or judicialbody, during the entire term, unless the law provides otherwise;

f) employment in a paid trade union management position;

g) act of God;

h) when an employee is taken into preventive custody, under theterms of the Code of Criminal Procedure;

i) in other cases expressly provided for in the law

II.1.6.2. Suspension on the initiative of the employee


(1) An individual employment contract may be suspended on theinitiative of the employee in the following cases:

a) parental leave for children under two years of age or, in the caseof a disabled child, up to the age of three years;

b) leave for care of sick child under the age of seven years or, in thecase of a disabled child, for intercurrent diseases, up to the age of

eighteen years;

c) paternity leave;

d) vocational training leave;

e) exercise of elective offices within professional bodies establishedat central or local level, during the entire term;

f) participation to strike;

g) repealed.


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(2) An individual employment contract may be suspended in case ofemployee absences without leave, under the terms provided for in theapplicable collective labour agreement, individual employment contract,and the rules of procedure.

II. 1. 6. 3.Suspension on the initiative of the employer


(1) An individual employment contract may be suspended on theinitiative of the employer in the following cases:

a) during the preliminary disciplinary hearing, under the terms of thelaw;

b) as a disciplinary sanction;

c) when the employer has lodged a criminal complaint against theemployee or he/she was prosecuted for criminal acts incompatible with theposition held, until a final judgment has been issued;

d) in case of temporary interruption of the activity, without acessation of the employment relationship, in particular for economic,technological, structural or similar reasons;

e) during the posting.

(2) In the cases provided for in paragraph (1) (a), (b) and (c), shouldthe innocence of the person concerned be established, the employee shallresume the prior activity and shall, under the rules and principles of civilcontractual liability, receive an indemnification equal to the wage and theother rights he/she was deprived of during the suspension of the contract.

II. 1. 7. Dismissal

Legal definition: A dismissal is the cessation of the individualemployment contract on the initiative of the employer.

Dismissal may be decided for reasons related to the person of the

employee as well as for reasons not related to the employee.


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Art. 59 of Romanian Labour Law:

The dismissal of the employees shall be prohibited:

a) based on sex, sexual orientation, genetic characteristics, age,

national affiliation, race, colour, ethnicity, religion, political option, socialorigin, disability, family situation or responsibility, trade union affiliation oractivity;

b) based on the exercise, under the terms of the law, of the right tostrike and to unionisation.

Art. 60 of Romanian Labour Law says that:

(1) The dismissal of the employees may not be decided:

a) during the temporary disability, as certified by a medicalcertificate according to the law;

b) during the quarantine leave;

c) during the pregnancy of the employee, insofar as the employertook knowledge of it prior to issuing the dismissal decision;

d) during the maternity leave;

e) during the parental leave for children under two years of age or,in the case of a disabled child, up to the age of three years;

f) during the parental leave for children under seven years of age orin the case of a disabled child, for inter current diseases, up to the age ofeighteen years;

g) during the compulsory military service;

h) during the exercise of an elective office in a trade union, exceptfor the case where the dismissal is decided for serious or repeateddisciplinary offences of that employee;

i) during the leave.

(2) The provisions of paragraph (1) shall not apply in the case ofdismissal due to reasons related to the legal reorganization or bankruptcyof the employer, under the terms of the law.


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As provided for in Art. 61 of Labour Code, an employer has theright to decide the dismissal for reasons related to the person of theemployee in the following cases:

a) when the employee has committed a serious or repeateddisciplinary offence related to the labour discipline rules or the rules laiddown in the individual employment contract, applicable collective labouragreement or rules of procedure, as a disciplinary sanction;

b) when the employee has been taken into preventive custody formore than 30 days, under the terms of the Code of Criminal Procedure;

c) when, by decision of the competent medical examination bodies,a physical and/or mental inability of the employee is found, not allowinghim/her to fulfil the duties corresponding to the position held;

d) when the employee is not professionally fit to the workplacewhere he/she is employed;

e) when the employee fulfils the standard age and period ofcontribution conditions and has not requested retirement, under the termsof the law.

When the dismissal has been caused by one of the reasons provided

for in Article 61 (b)-(d), the employer shall issue the dismissal decisionwithin 30 calendar days from the establishment of the cause of dismissal.

The dismissal caused by serious or repeated disciplinary offenceagainst the labour discipline rules may only be decided after the employercarries out the preliminary disciplinary hearing and within the deadline laiddown in this Code.

The dismissal of the employee for the reason provided in Article 61(d) may only be decided after a prior assessment of the employee,according to the assessment procedure established in the applicable

collective labour agreement, concluded at national level, branch level orgroup of employers level, and in the rules of procedure.

Art. 64 of Labour Law - Mandatory reallocation proposal

When the dismissal is decided for the reasons provided for in Article61 (c) and (d), the employer shall propose the employee other vacantpositions in the organization, which are compatible with his/herprofessional background or, as the case may be, with the work capacity,as established by the occupational medicine physician.


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When the employer has no vacancy it will request the support of thelocal public employment office in order to reallocate the employee,according to the professional background and/or according to the workcapacity, as established by the occupational medicine physician. Anemployee shall have a deadline of three working days from the notification

of the employer for the expression of his/her written agreement on thenewly offered workplace.

If the employee does not express his/her agreement within thedeadline, and after notifying the local public employment office, theemployer may dismiss the employee.

In case of dismissal for the reason provided for in Article 61 (c), theemployee shall receive a benefit, under the terms of the applicablecollective labour agreement or the individual employment contract,depending on the case.


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II. 2 . The Collective Labour Agreement

If an employer has at least or more than 21 employees then the

employer must start negotiations for the signing of the Collective Labour

Agreement with the employees for determining working conditions,

payment and other rights and obligations resulted from labour

relationships.

The clauses stipulated by the this Labour Agreement are regarded as

minimal when compared to those contained in the Individual LabourAgreement, in other words the employees rights cannot be established at

an inferior level than the one in the Collective Agreement.

This type of agreement concluded at the Units level must be

registered with the Directorate of Labour, Social Solidarity and Family at

the respective county level.

Collective Labour Agreements concluded at a higher level (groups of

Units, activity branches or national level) shall be registered with the

Ministry of Labour, Social Solidarity and Family.

The parties, their representation and the procedure of negotiationand conclusion of the collective labour agreements must be establishedaccording to the law.

II. 2. 1 Prohibited and minimal clauses in the collectivelabour agreement

It is prohibited that the collective labour agreements contain clausesestablishing rights below the level set by collective labour agreementsconcluded at a higher level.

The individual employment contracts may also not contain clausesestablishing rights at a lower level than that established by collectivelabour agreements.

Art. 238, paragraph 3 of Romanian Labour Code saysthat When concluding the collective labour agreement, the legal

provisions regarding the rights of the employees shall have a minimalcharacter.


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II. 2. 2. Coverage of the effects of collective workagreement

According to Art. 240 of Labour Code, the collective labouragreements can be concluded at employer, branch and national level, aswell as at the level of groups of employers, hereinafter called groups ofemployers


(1) The clauses of the collective labour agreements shall takeeffect as follows:

a) for all employees of an employer, as regards the collective labouragreements concluded at that level;

b) for all employees of the employers belonging to the group ofemployers covered by the collective labour agreement concluded at that

level;

c) for all employees of all employers belonging to the branchcovered by the collective labour agreement concluded at that level;

d) for all employees of all employers in the country, as regards thecollective labour agreement concluded at national level.

(2) Only one collective labour agreement may be concluded at eachof the levels provided for in Article 240

II. 2. 3. Other specifications

~ The collective labour agreement has a limited duration, of at least12 months, or it may cover a particular work.

~ The performance of the collective labour agreement is mandatoryfor the parties, and the non-performance of the obligations under the

collective labour agreement entails the liability of the responsible parties.


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~ The clauses of the collective labour agreement can be amendedduring its performance, under the terms of the law, if the parties agreeupon it.

~ Art. 245 of Labour Code: A collective labour agreement shall

cease:

a) at the end of its term or at the end of the work for which it wasconcluded, if the parties do not agree to extend its application;

b) at the date of the dissolution or winding-up by the court of theemployer;

c) by agreement of the parties.

~ Art. 246 of Romanian Labour Code: The application of thecollective labour agreement may be suspended by consensus of the

parties or in case of an act of God

~ When there is no collective labour agreement at employer, groupof employers or branch level, the collective labour agreement concludedat the superior level shall apply.


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III. Conclusions

The legal system is less weighted against the employers than manymanagers believe.

As a manager, you should approach the legal aspects ofemployment questions as you do other business problems, as posing bothbenefits and risk.

The mere possibility of a lawsuit should not determine yourdecisions. Instead, you should carefully weigh risks and rewards, just as

you do when confronted with other issues.

By setting your internal compass to treat your employees fairly,thoughtfully, and with consideration, most of the time you will also placeyourself in compliance with legal standards.

The goal of a good manager should be to form a base of knowledgein order to best use the appropriate experts, engage lawyers productivelyto assist in analyzing your problems when necessary, and, ultimately,protect both himself and his company while building the best possible

workforce.

Finally, its important to understand that managing legal risk andopportunity in employment decisions is just a special case of what youalready do as a manager.


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IV. References

1. Romanian Labour Code

2. Dana M. Muir - A Managers Guide to Employment Law how to protect your company and yourself, published by

Jossey-Bass, 2003

3. Ion Traian Stefanescu Tratat de Dreptul Muncii, vol. Iand vol. II, published by Lumina Lex, Bucharest, 2003

Documents

Tepes Ana - Employer - Employee Relationship (Contract Terms - In Terms of the Employer)