Law no. 40/2011 amending the Romanian Labor Code was recently enacted and its provisions shall enter into force on 30 April 2011.
The main amendments brought by Law no. 40/2011 are:
Individual labor agreements (“ILA”)
- written form of ILA becomes mandatory, and employers must provide the employee with one ILA original, before commencement of employment;
- ILA concluded in absence of an employee medical certificate shall be null and void;
- maximum trial period: 90 days for operational positions, and 120 days for management positions. Trial periods may be terminated by written notice;
- removal of the limitation on the maximum number of employees that can be hired for the same position on successive trial periods. The maximum period during which the employer may hire employees on such successive trial periods for the same position is 12 months;
- an ILA shall be suspended when an individual’s approval/authorization for his profession expires. If, within 6 months of expiry the employee fails to renew such approval/authorization, his/her ILA shall be terminated by law;
- the suspension of an ILA shall be allowed for a temporary reduction of activity lasting for more than 30 working days, and due to economic, technical, organizational or other similar reasons. After prior consultations with union or employees' representatives, the employer may reduce the working time from 5 to 4 days per week, and pro rata the salary, until its normal course of activity resumes;
- the death or dissolution of the employer shall constitute grounds for termination by law of an ILA;
- the performance level of employees shall be the first criterion to be taken into account in the case of collective dismissal;
- the termination notice in the case of resignation is increased to max. 20 working days for operational positions and max. 45 working days for management positions.
Fixed term ILA
- the maximum period for fixed term ILAs was increased to 36 months. The restriction to conclude, upon expiry of the term of the third fixed term ILA with an employee or the expiry of the maximum period of 36 months, with another employee a fixed term ILA for the same position shall no longer apply.
- temporary worker assignments limited to a maximum term of 24 months, extendable provided that the overall period (including the initial term) does not exceed 36 months;
- the salary of a temporary worker for each assignment shall be established by direct negotiations with the temporary employment agency and cannot be less than the minimum national gross salary.
- exceptionally, the work time period can exceed 48 hours per week (including overtime) provided that the average rate of working hours for a period of 4 months does not exceed 48 hours per week. For certain professions, collective labour agreements may provide periods longer than 4 months, but not more than 6 months. Moreover, for objective, technical or organizational reasons, and provided that the legal provisions on the protection of health and security at work are observed, the collective labour agreements may provide derogations from such reference period of 6 months, without exceeding 12 months;
- overtime shall be compensated with remunerated non-working hours, within 60 days of completion of that overtime;
- during periods when the work volume is low, the employers may grant paid non-working hours which may subsequently be compensated with overtime hours within the next 12 months.
- carrying out work in the absence of an ILA shall constitute a misdemeanor and may trigger fines for the employee ranging between RON 500 to RON 1,000;
- failure to conclude ILAs for a maximum 5 employees shall constitute a misdemeanor and may trigger fines for the employer ranging between RON 10,000 to RON 20,000 for each employee without an ILA. Moreover, failure to conclude ILAs for more than 5 employees constitutes a criminal offence and may trigger imprisonment from 1 to 2 years or a criminal fine;
- repeated failure to observe the national minimum gross salary constitutes a criminal offence and may trigger imprisonment from 6 months to 1 year or a criminal fine;
Collective labour agreements ("CLA")
- the CLAs, and addendums to any CLAs, concluded between 30 April 2011 and 31 December 2011, cannot provide for a term longer than 31 December 2011. After 31 December 2011, a new CLA law, subject to enactment, shall regulate such duration;
- the CLAs in force on 30 April 2011 shall continue to apply until expiry of their term.