What you should know about employing people in...Romania
By way of background, the Romanian Labour Code (the “Labour Code”) governs general employment relationships; although the Labour Code is usually modified every year by the publication of the government approved National Collective Labour Agreement in the Official Gazette.
General CommentsThe National Collective Labour Agreement may also be modified by collective labour agreements for each industrial activity in Romania.
The Labour Inspectorate is the governmental body within the Ministry of Labour and Social Protection and is the authority which supervises labour relationships and the compliance of the enacted labour safety rules. The Labour Inspectorate has territorial branches (Territorial Labour Inspectorates) that are responsible for the above-mentioned labour duties.
Individual labour contracts concluded with privately owned companies should be registered within twenty (20) days from date of execution with the Territorial Inspectorates of Labour. Any document regarding the execution, amendment, and termination of an individual labour contract shall be registered with the Territorial Inspectorates of Labour within five (5) days from the conclusion of such document, and the employer shall report on a monthly basis, on the 15th day of the following month, the documents evidencing payments for salaries, social security, supplementary pension, and unemployment contribution.
1. Individual Labour ContractThe Labour Code provides that individual labour contracts (hereinafter “ILC”) shall be in a written form and shall include a minimum the clauses provided for by the sample ILC. As a matter of practice, the inspectors from the Labour Inspectorate mainly accept employment agreements presented in the form of the sample contract. However, this practice is not compliant with the legal provisions, since the sample ILC provides for the possibility to add other clauses, which are not covered in the sample.
1.1. Duration of the Employment ContractILC may be established for either an undetermined or a fixed duration. The usual form of contract is one of an undetermined period of time. ILC may be concluded for a fixed period of time if done: (i) for replacement of an employee on a temporary leave of absence who the employer is required to retain; or (ii) for activities of a temporary nature; (iii) the temporary growth of the employer’s activity; (iv) if the contract is concluded on the basis of certain legal provisions issued with the purpose of temporarily favouring certain categories of unemployed persons; the hiring of a person which meets all retiring conditions within 5 years from the date she was hired; occupying eligible functions within trade union organizations, or non-governmental organizations, on the period of the mandate; hiring retired persons whom, under the conditions provided by the law, may cumulate the pension with the salary; other cases expressly provided by special laws.
1.2. Probation PeriodThe potential employee is subject to written and/or oral examination, a practical testing of their relevant skills and/or a probation period of time, if so desired by the employer. The duration of the probation period is a maximum of thirty (30) days for operational position and a maximum of ninety (90) days for management positions. The graduates of education institutions shall be employed, when debuting in their profession, based on a probation period of maximum 6 months.
2. Termination of an ILC
2.1. Termination by mutual agreement and termination by dismissalThe parties can agree a termination. Alternatively an employer may choose to dismiss unilaterally.
Labour Code stipulates the cases when the dismissal of employees cannot be ordered:
a. During temporary work inability, attested by medical certificate in compliance with the law;
b. During quarantine leave;
c. During the pregnancy of a salaried woman, as long as the employer knew of this fact prior to the dismissal;
d. During maternity leave;
e. During child care leave;
f. During military service;
g. During the performance of an eligible position in a trade union organisation, unless the dismissal is for a serious disciplinary breach or for recurrent disciplinary breaches; and/or
h. During annual leave.
2.2. Dismissal on grounds independent of the employee’s personLabour Code stipulates that dismissals for reasons that are not the fault of the employee may occur. Dissolution of a work place has to be effective and to have a real and serious cause.
Such dismissals can be individual or collective. Collective dismissals mean the dismissals, within 30 calendar days:
a. Minimum 10 employees, if the employer who dismisses the employee has more than 20 employees, but less than 100 employees;
b. Minimum 10% of the employees, if the employer who dismisses the employees has minimum 100 employees, but less than 300 employees; and
c. Minimum 30 employees, if the employer who dismisses the employees has minimum 300 employees.
2.3. Dismissal on grounds related to the employeeIn the event the employee has committed a serious breach or recurrent breaches of the work discipline rules or those provided for in the ILC, the applicable collective bargaining agreement, or the internal rules, the law entitles the employer to dismiss.
A dismissal can be ordered only after compliance by the employer with the disciplinary procedure and within the terms provided for by the Labour Code. The prior research procedure is also compulsory if the employee is not suitable from a professional point of view.
3. Employee ProtectionThe employer may be subject to dissolution upon request by the general divisions of labour and social security if the employer:
a) Repeatedly hires persons without concluding an individual employment contract;
b) Refuses to allow access and/or to present the necessary documents to the labour inspectorate officers; and/or
c) Does not maintain the register of civil conventions in compliance with the law.
In case the shares of a company are transferred, the new owner is bound by the existing collective labour contract and individual employment agreements as well as civil conventions for their entire duration. When such agreements are terminated, the new owner is required to negotiate new ones.
4. Working HoursAccording to legal provisions, the working week has five days (Monday to Friday). The regular working time is 8 hours per day or an average of 40 hours per week. The distribution of work hours during the week is generally uniform, 8 hour workdays for 5 days, with two rest days. Depending on the specific characteristics of the unit or the performed work, it can also be opted for a variable distribution of work hours, by complying with the normal 40 hours work per week.
The maximum legal work hours cannot exceed 48 hours work per week, including overtime. When work is performed in shifts, the work hours can be extended beyond 8 hour workdays and 48 hours work per week, provided that the average work hours, for a maximum of 3 consecutive months, does not exceed 8 hour workdays or 48 hours work per week.
A person can also be employed on a part time basis, with 6, 4, or 2 hours per day. In such cases, the employee will be rewarded proportionally with the time spent. Employees working on a part-time basis can be employed full time, upon request, where there are vacant positions and if they fulfill the legal conditions for applying for those specific positions.
The beginning and end of the official work time will be established through the company’s internal rules.
Work carried out between the hours of 10 p.m. and 6 a.m. is considered night work. For night work, the employee may work one hour less than those worked during the day, with no corresponding reduction in wages.
5. OvertimeThe time spent after the regular established work time represents overtime. The employees cannot be requested to do overtime, without their consent (except during events of force majeure).
As a general rule, overtime should be compensated with leisure time given in the following 30 days. If due to the employer’s activity, the employee cannot get leisure time, the overtime is compensated with money at an hourly rate increased with at least 75% of the based salary.
In case of part-time employees work performed outside the normal work schedule (6,4 or 2 hours) or during the holiday or the weekend is deemed overtime and is paid according to the same rules, as mentioned above.
6. Leisure TimeEmployees are entitled to a rest period of at least twelve (12) consecutive hours between the end of work on one day and commencement of the next day’s work (24 hours). Employees are entitled to two (2) statutory rest days a week, normally Saturday and Sunday. In case of a shift of 12 working hours, the employee is entitled to 24 hours rest time.
7. Annual LeaveEmployees have the right to annual paid leave of at least 21 working days. The employees who work in difficult, dangerous or damaging conditions, blind people, other disabled persons and young people under 18 benefit from additional holiday of a minimum of 3 business days. Employees have the right to paid days off for special family events, such as a marriage (5 days), marriage of a child (2 days), childbirth in case of the father (2 days), death of a relative (3 days), secondment in another town (5 days).
Employees may not waive the right to paid leave.
8. Collective Labour AgreementA company with more than twenty-one employees is required to commence negotiations upon the request of the employees operating at such company for the purpose of concluding a collective employment agreement.
There is no obligation for the parties to conclude a collective employment agreement, but only an obligation to negotiate for the purposes of concluding such agreement. Negotiations cannot last more than sixty (60) days. A collective employment agreement must be concluded for a minimum period of twelve (12) months.
9. Labour DisputesLaw defines a labour dispute as a conflict between the employer and the employees arising from the professional, social or economical interests of the employees, or rights resulting from the employment contract.
In the case of a labour dispute, the parties may agree to mediation or arbitration proceedings.
10. Trade UnionsAll employees, except managers, persons holding positions of authority in the state administrative system, or members of the judiciary or armed forces, have the right to establish trade unions and are guaranteed the freedom of association and organization.
Trade Unions must be independent, apolitical organizations, formed for the purpose of protecting and promoting the interests and the rights of their members. Trade union funds used to achieve their purposes are derived from membership fees, entrance fees, and the proceeds from cultural and sporting events.