In Romania, over the last 20 years, employment legislation has been constantly changing as a result of government reforms. Nevertheless, the legislation provides a wide range of protection for employees. Romanian employment legislation is principally governed by the Labour Code and Social Dialogue Law. There are also special provisions on employment health and safety and insurance for accidents at work and industrial diseases.
Issues arising on hiring individuals
In Romania, citizens of the EU or of the EEA do not need a work or residence permit. Foreign citizens (who are not EU or EEA citizens) must obtain a work permit to work in Romania. Work permits are issued by the Romanian Office for Immigration. As a rule, work permits are issued for a one year period. The number of work permits issued every year is limited and the number issued is determined by the government. For 2016, the number of work permits that could have been issued was limited to 5,500.
Employment structuring and documentation
Individual employment contracts are usually unlimited term contracts, but the employment relationship can also exist for fixed-term and part-time contracts.
According to the Romanian Labour Code, any kind of individual employment contract must be in writing (this condition affects the validity of the contract), in the
Romanian language as a result of both parties' consent. Before the employment relationship commences, the employer must finalise the terms of the employment contract and register it with its employees' electronic program (ReGeS). Employers that do not register individual employment contracts will be subject to financial sanctions.
Before finalising the terms, or amending the terms of an individual employment contract, the employer must inform the person offered employment or the employee, about the essential clauses to be included in the contract or to be amended, as the case may be. The minimum content for the initial offer is stated by law.
Employment contracts for both a fixed or indefinite (unlimited) term may contain a probationary period clause.
Issues arising during the employment relationship
Wages, annual leave and working time
The current minimum gross base monthly wage is RON 1,250 for all full-time employees. The minimum gross monthly wage is currently RON 1,450.
The maximum average working time is 40 hours per week, or 48 hours with overtime, and eight hours per day. In exceptional circumstances, working hours can exceed 48 hours per week provided that the average working hours calculated over a four month period do not exceed 48 hours per week, including overtime. The minimum daily rest time is 12 hours and the minimum weekly rest time is 48 consecutive hours.
Under the Constitution and the Romanian Labour Code, every employee has the right to become a member of or to set up a trade union. There must be at least 15 employees in the company to set up a trade union.
The representative trade union is entitled to receive any necessary information (including financial information) from employers for the negotiation of collective labour agreements and other employment related agreements.
Trade unions play a key role in collective bargaining but they also have significant information and consultation rights. In addition, trade unions have the right to register petitions and to represent their members' interests before a Tribunal.
In Romania, employers must retain and pay social security contributions (contributions to the social security system, health system and unemployment system). These contributions are divided between employee and employer contributions.
The average employer's social security contributions can be up to 30% of the employee's gross salary and the employee's contribution up to 20%. However, these payments are made solely by the employer. These contributions relate to the amount of salary paid to the employee.
Issues arising on termination of the employment relationship
The transfer of an undertaking, business or part of a business is governed by the Labour Code and Law No. 67/2006 which provide strong protection for employees affected by the transfer.
Prior to the transfer, both the transferor and the transferee must consult the trade unions or the employees' representatives with respect to the legal, economic and social implications of the transfer.
All of the transferor's existing rights and obligations arising out of the employment contracts and collective labour agreements transfer to the transferee, except where the transferor is subject to a restructuring or insolvency procedure. Nevertheless, the transfer is not a valid reason for the individual or collective dismissal of transferring employees.
Under Romanian law, the employment contract may be terminated by law, by mutual consent or by notice given by one of the parties. The grounds for dismissal must be real and serious and there are two types of valid grounds (1) subjective grounds, such as serious or repeated disciplinary offences or poor performance or professional unfitness; and (2) economic grounds.
A dismissal for reasons unrelated to the employee as an individual, (the termination of the employee's position), can be the result of one of several objective reasons, such as closing down a workplace or business and must be for a genuine and serious reason. An employer can dismiss an employee even if the company does not have financial difficulties but simply wants to be more cost efficient.
Dismissals on economic grounds may be individual or collective. Where employees are dismissed on economic grounds, they are entitled to benefit from active measures designed to limit unemployment and they may be entitled to compensation under the terms of the law and the applicable collective labour agreement
Employees who consider that they have been unfairly dismissed can challenge their dismissal before the Employment Tribunal. If the judges find the dismissal unfair, they will reinstate the employee and award compensation for the amount of the employee's salary from the date of dismissal to the date of the Tribunal's decision or the date that the employee is reinstated (and will grant reinstatement every time they annul the dismissal, if the employee has asked for this).
The law provides several time limits for bringing an unfair dismissal claim; which is generally within 45 calendar days of the date the employee became aware of the relevant act which gave rise to the claim.
Published in collaboration with L&E Global an alliance of employers’ counsel worldwide
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