Recent changes in the Romanian Labour Code
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August 2011 |
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ANDREEA SUCIU - Senior Associate
S.P.R.L MENZER & BACHMANN - NOERR |
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Strada General Budişteanu Constantin, Nr. 28C
010775 Bucureşti, Sector 1
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+40-21-312.58.88
Fax
+40-21-312.58.89
Website
www.noerr.com
The latest changes to employment regulations are aimed at more flexible working relations and their adjustment to the dynamics of the labour market, ensuring the conditions for the development of the business environment and also the adaptation of the Romanian legislation to the Community legislation.
The new provisions in the Romanian Labour Code (hereinafter: the Labour Code) are also referred to as a step in the right direction, especially because labour law in Romania was previously considered to be extremely friendly to employees. A large part of the amendments to the Labour Code which came into force on May 1st, 2011 is now viewed as more employer-friendly. We shall hereafter examine more closely the most important changes of the Labour Code.
Evaluation criteria and procedures
With the new Labour Code, the quality of work will play a more important role. Thus, the employer is assigned an explicit right to set individual performance goals. Furthermore, employers are required to establish criteria and procedures for the evaluation of their workers’ activity.
This provision can, for example, play a role in mass layoffs. The selection of employees to be dismissed will be first done according to the criterion regarding the achievement of objectives and only afterwards will the applicable collective agreement regarding specific social criteria be applied.
Fixed-term employment contracts
Fixed-term employment contracts have hardly played any role in Romania so far (1) . Firstly, before the crisis that began in 2008, there was already a great shortage of workers so that employers did not necessarily have a keen interest in fixed-term work contracts. On the other hand, the statutory regulations regarding fixed-term contracts were also rather strict.
The new Labour Code relaxes the previously strict requirements, at least partially. The maximum duration of a fixed-term employment contract has been extended, for example from 24 to 36 months, and two more consecutive (2) contracts, which may not exceed one year, may be completed after the expiration of the first fixed-term employment contract (article 82, paragraph 5 Labour Code).
It should be noted however, that this limitation in time concerning the period for which a fixed-term employment contract can be concluded is an "innovation" of the Romanian law, being able to restrict the application of such a contract. Thus, the EU fixed-term work directive (3) (hereinafter: Directive 1999/70/EC) provides that the end of the contract or employment relationship is determined by objective conditions such as reaching a specific date, fulfilling a specific task or the occurrence of a specific event (paragraph 3 section 1 Directive 1999/70/EC).
At least, the regulation, which previously explicitly stated that after expiry of the maximum period of (under previous legislation) 24 months, respectively after the third consecutive employment contract, only an employee on a permanent contract can be employed at the respective workplace, has been overridden.
Despite attempts of the Romanian legislator to harmonize the Romanian legislation with the Community legislation related to fixed-term employment contracts, the comparative analysis of the Romanian law and Directive 1999/70/EC results in a conclusion which we appreciate as being important. Namely, unlike the Community provisions, the Labor Code limits the situations in which a fixedterm employment contract may be concluded. The legislative solution chosen by the Romanian law is counterproductive, being able to reduce labor mobility in a labor market affected by economic restructuring.
Thus, although Directive 1999/70/EC provides that Member States may introduce provisions which are more conducive to the workers concerned, our perception is that the Romanian law has taken over the institution of fixed-term employment in a restrictive manner rather than in a general nondiscriminatory one.
Temporary employment
The subject of temporary employment, similar to fixed-term work, previously hardly played any role in Romania, particularly because of the rather inflexible regulations. However, temporary employment is a matter of interest for companies, since it is able to satisfy a temporary staffing need, e.g. during temporary heavy workload or a temporary need for specialists.
