At a glance: termination of employment in Romania

Termination of employment

May an employer dismiss an employee for any reason or must there be ‘cause’? How is cause defined under the applicable statute or regulation?

The reasons for dismissal are limited and expressly provided by the Labour Code, as follows:

• reasons related to the employee for physical or mental unfitness;
• for professional unfitness;
• for disciplinary misconduct;
• when the employee is under police custody or house arrest for more than 30 days; or
• for reasons not related to the employee consisting in the removal of the employee’s position.

Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice?

The minimum notice of termination that must be given by the employer in the case of dismissal is 20 business days. An employer may not pay in lieu of notice.

In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?

Employers may dismiss an employee without notice of termination in the case of disciplinary dismissal.

Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?

Romanian legislation does not regulate an employer’s obligation to pay compensation upon termination of employment by dismissal, except in the case of physical or mental unfitness. Also, depending on the type of termination (ie, termination by mutual consent of the parties, termination at the employer’s initiative-dismissal, termination at the employee’s initiative – resignation) the employee might be entitled to receive certain payments provided under applicable collective bargaining agreement or under the individual employment agreement, as the case may be.

Are there any procedural requirements for dismissing an employee?

The Labour Code expressly provides procedural requirements for dismissing an employee, irrespective of whether the dismissal is:

• for reasons related to the employee (eg, preliminary investigation for disciplinary dismissal;
• preliminary professional evaluation in the case of dismissal for professional unfitness; or
• for reasons not related to the employee (eg, informing and consulting trade unions or employees representatives and notifying labour authorities in the case of collective dismissal; restructuring procedure; prior notice procedure).

Prior approval from a government agency is not required by law, but informing or notifying labour authorities is required in certain cases (eg, collective dismissal). Also, the labour authorities may extend or reduce certain procedural terms under the conditions provided by law (ie, in the case of collective dismissal).

In what circumstances are employees protected from dismissal?

Employees are protected from dismissal, inter alia, in the following cases:

• during medical leave;
• during child-raising leave;
• during care leave for sick child;
• during annual holiday paid leave;
• during pregnancy;
• during maternity leave;
• for discriminatory reasons (ie, race, sex, language, political and union views, religion);
• where the employee is in receipt of reinsertion allowance; or
• six months after the definitive return of the employee from the child raising leave.

Are there special rules for mass terminations or collective dismissals?

The collective dismissal must observe the expressly legal requirements. Collective dismissal represents the termination of employment within a period of 30 calendar days, for one or several reasons not related to the employee, in a firm of:

• at least 10 employees for employers with more than 20, but fewer than 100 employees;
• at least 10 per cent of the employees, for employers with at least 100 employees, but fewer than 300 employees; and
• at least 30 employees, for employers with at least 300 employees.

Moreover, strict procedural steps for collective dismissal have to be followed, respectively: 

• approval by the relevant corporate body of the employer;
• first written notification to employees representatives or trade union from the employer on its intention to proceed with a collective dismissal (ie, first notification);
• sending a copy of the first notification to the Territorial Labour Inspectorate and local employment agency;
• conducting consultations with employee representatives or trade unions and applying the criteria for reducing personnel;
• approving the definitive terms and conditions of the collective dismissal;
• notifying the Territorial Labour Inspectorate, local employment agency and the employee representatives or trade union (the second notification) with regard to the final decision of the employer on the collective dismissals;
• granting of the prior notice period; and
• issuing the individual dismissal decisions.

Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?

Class actions as regulated under US jurisdiction are not regulated under Romanian law. However, several employees may together be plaintiffs if the object of the process is a common right or obligation, if their rights or obligations have the same cause or if there is a close connection between them. Nevertheless, trade unions may represent their members in court claims with respect to employees’ labour rights.

Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?

No. Romanian law does not allow employers to impose a mandatory retirement age. However, the standard retirement age for women is 61 years and will increase gradually to 63 years by January 2030. The standard retirement age for men is 65 years. The minimum contribution period is 15 years for both women and men. The full contribution period for women is 31 years and will increase gradually to 35 years by January 2030. The full contribution period for men is 35 years.