Two recent rulings of the Romanian High Court of Cassation of Justice (the “High Court”) clarify the timeframe in which employers may take disciplinary action against employees and the unions’ capacity to bring court actions on behalf of their members.

The Romanian High Court of Cassation of Justice (the “High Court”) has recently ruled on two very important labor law topics. In doing so, the High Court has created a binding judicial precedent which sets out the mandatory rules for any subsequent cases involving identical or similar situations, trialed in front of the High Court itself or in lower courts in the judicial hierarchy. Under the Romanian legal system, the High Court has final authority in unifying divergent case law, through a special type of ruling – one that is issued following a so-called “appeal in the interest of law” (Rom. “recurs in interesul legii”), filed by the country’s General Prosecutor to restore legal certainty if, as the jurisprudence around existing legal provisions evolves, different opinions or interpretations of the lower courts are reported.

These recent rulings have clarified two important matters – (1) the timeframe to be followed by employers when taking disciplinary action against their employees (Decision 16/2012), and (2) the capacity of unions to bring court actions on behalf of their members (Decision 1/2013).

  1. The timeframe to be followed by employers when taking disciplinary action against their employees

According to the Romanian Labor Code, employers may take disciplinary action against employees only upon following a prescribed procedure. The procedure includes an investigation phase, within 30 calendar days of when the breach is acknowledged by the employer (subjective moment), but not later than 6 months from the occurrence of the alleged breach (objective moment). The jurisprudence was not uniform in identifying the subjective moment from which the 30-day term is calculated. Some courts considered that the subjective moment is the initial moment when the employer is first alerted (usually, by another employee or a third party, through a note, a written statement, letter, etc.) that a potential disciplinary breach could have occurred, while others considered that a formal and meaningful acknowledgement occurs only upon conclusion of the investigation phase by the employer’s representatives.

The latter position was deemed more accurate by the High Court as, at the initial moment when the employer is first alerted, since the investigation phase has not been completed yet, it is not certain yet if the deed allegedly committed by an employee amounts to a disciplinary breach (with the consequence that the employee is still presumed not guilty at that time). As such, the High Court has confirmed that, in fact, employers have 30 days, from the moment when the investigation commission issues its final report determining if a breach has been committed, to sanction the responsible employee.

However, we caution that many collective bargaining agreements and company-level internal regulations may refer to the initial alert of the employer as being the subjective moment from which the 30-day deadline starts to run. Although it could be argued that the ruling of the High Court has full legal force and prevails over conflicting provisions in such documents, going forward, a rewording of the relevant sections in collective bargaining agreements and company-level internal regulations may be advisable.

  1. The capacity of unions to bring court actions on behalf of their members

The High Court has shed light on a matter that has initially arisen under the previous law on unions, Law 54/2003, as amended, now replaced by Law 62/2011 on the Social Dialogue, which even if has brought about great reforms, has failed to clarify this issue. There were two different opinions in the jurisprudence regarding the capacity of unions to bring a direct court action in connection with the rights and interests of its members. One opinion says that the union itself did not have litigation standing in its own name and it could only represent its members, to the extent to which union members themselves launched a court action. Another opinion says that unions were allowed to initiate a court action even in the absence of a direct mandate from its members, to defend their rights and interests.

The latter opinion prevailed and was acknowledged by the High Court, which has thus consecrated the independent standing of unions in court. As a result, unions can initiate a litigation to the individual or collective benefit of their members.

It is important to note that union members retain the so-called “litigation disposition rights” at all times, which means that they may withdraw the claim and thus stop the trial if they choose to do so. The court which has jurisdiction with respect to the union’s headquarters is invested to rule on the case.