Template- Employment Law Summary - Globalaw - Romania 2013 (GP)

SUMMARY OF EMPLOYMENT LAW – Romania (November 2013)

REGULATION OF THE EMPLOYMENT RELA-TIONSHIP

Labour law concerns subordinate work, regulating the situation of the person who works in favor and under the authority of another, in exchange of a salary. In the same time, its object is not limited only by the actual employment relationships, but also refers to other legally related relations . For example, prefessional training, social dialogue, health and security at work or labour jurisdiction. Also, labour law does not consider the personal work, such as the household, nor the independent work or freelancers. By special acts there is covered a range of professions and independent activities such as the lawyer profession, the auditor, architect, mediator, accountant, etc.

The main provisions regarding employment are set out in the Labor Code, in force since March 1st 2003. Although the Romanian Labour Code is relatively recent, it was amended and consolidated several times so far, both because of the dynamics of labour law and also by the need to harmonize the national Law with the EU Directives. The most significant change occurred in 2011.The Labour Code is appli-cable to all employment relationships within the territory of Romania or if a Roma-nian citizen is employed outside of Romania for a temporary period.

The own, fundamental and characteristic feature of any employment relationship is the relationship of subordination. But not as forced labour, as both the Romanian Constitution and the Labor Code prohibits this. The consequence of subordination lies in the fact that the employers determine the program and the work of the staff, having the right to give general or detailed instructions on how to perform tasks.

Another consequence of subordination is manifested through the employee's obligation to observe labour discipline, otherwise being subject to disciplinary liability. Legal subordination is also defining in order to classify a relationship as

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being civil or employment relationship. It is possible for some activities to be performed under a civil service contract, but while under the labour contract the business risk is beared by the employer, under the civil contract the risk is beared by the debtor of the claim that cannot be executed. In other words, the employer is always obliged to pay the employee regardless of the outcome of its activities.

The labour must be remunerated. A free labour cannot be the object of a legal relationship work.As a rule, employment relationship is established only between a legal entity and a natural person or, exceptionally, only between two individuals, but never between two legal entities, because the person who performs a work can be, by definition, only an individual.Employment relationship is personal, being concluded under the consideration of of the training, skills and abilities of the person performing the work, but also by considering the specifics of the other party, given the team, the climate and the working conditions offered by it. That is why, in the case of a civil enterprise contract, the contractor may partly contract a subcontractor to do its work, while the employee must always fulfill his obligations personally.

The employer is required to register the labour contract at the Labour Inspectorate in whose jurisdiction they operate and at the tax authorities. He also has the obligation to keep track on payments and to create an employee data sheet on his work, eventual misconducts, penalties, etc.. In Romania, if the employee calls his employer in front of the court, the last one will be presumed guilty and will have to prove its innocence by presenting supporting documents.

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NATIONAL MINIMUM WAGE

Government Decree on the minimum wage

Labor Code

Starting with 1st July 2013 the statutory minimum wage in Romania is: 800 lei (aprox. EUR 180) per month, for a complete work of 168,667 hours per month in 2013, representing 4.74 lei / hour (aprox. EUR 1).

If the normal work schedule is, by law, less than 8 hours daily minimum hourly wage is calculated by dividing the gross national minimum to the average number of hours per month according to legally approved work program.

In the present there is no statutory obligation on the employer to determine employee wages in compliance with the minimum coefficient of rank, only a conventional one and the source of this obligation is the collective labor contracts.

In other words for those who have a degree there is not any minimum statutory salary.

RESTRICTIONS ON WORKING TIME

Labour Code (LC)

Constitution

The Romanian legislation is also in line with the requirements of Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time.

Accordingly to the law, in Romania a full time working week consists of a maximum of 48 working hours, including overtime.

As an exception, working time, including overtime, may be extended beyond 48 hours per week, provided that the average working hours, calculated over a period of 4 months calendar reference, does not exceed 48 hours per week.For certain activities or professions established by the applicable collective labor contract can

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be negotiated reference periods greater than four months but not exceeding six months.

Additional work is done at the employer's request and only with the consent of the employee. Employee consent is not required in the following two situations: in case of force majeure and in case of urgent works to prevent accidents or eliminate the consequences of accidents.

It should be noted that additional work can not be done by young people aged up to 18 years.

Overtime is compensated by time off paid within 60 calendar days after execution.

Available hours are paid taking intoconsideration the employee's salary and the number of additional hours worked.

In the event that overtime compensation is not possible within 60 days of execution overtime will be paid to the employee by adding a salary increase, according to its duration.

Additional pay is determined by negotiation and it can not be less than 75% of base salary.

Weekly rest consists of on two consecutive days, usually Saturday and Sunday. If

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the rest on Saturday and Sunday would be prejudicial to the public interest or the normal activity, weekends can be given on other days determined by collective agreement or by applicable rules of procedure.

HOLIDAY ENTITLEMENT

Labour Code (LC)

Constitution

The right to annual leave is mandatory and compulsory as guaranteed to all employees, primarily by the Romanian Constitution, and the Labor Code.

Labour Code, as a general rule, stipulates a minimum of twenty (20) working days per year for the holidays. As an exception to this rule, the holidays will have a longer duration in the following situations:

- for young people aged up to 18 years - three days more;

- for employees working in difficult conditions, hazardous or harmful - 3 days more;

- for Blind People - 3 days more;

- when the employees labor contract, a collective bargaining agreement applicable to the employer or its internal rules provides a longer duration than the 20 working days - depending on how the contract states / Regulation;

- beneficiaries of the GD 250/1992.

Vacation is granted proportionaly with the work performed in a calendar year.

Vacation is granted on individual or collective scheduling by the employer with the employee or, where appropriate, with the union or employee representatives.

Vacation is given continuously for at least 10 working days, the remaining days of

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leave may be granted fractionated.

Upon termination of the employment relationship the employer must provide the salary of the employee for each unused vacation days.

ILLNESS AND INJURY OF EMPLOYEES

Labour Code (LC)

Government Emergency Ordinance158/2005 on leave and health insurance allowances

The duration of temporary disability indemnity shall not exceed 183 days within one year counted from the first day of illness.

Compensation for temporary disability shall be charged as follows:

A. by the employer from the first day until the 5th day of temporary disability;

B. the National Fund of Health Insurance, from the 6th day and up to the date of termination of temporary disability of the insured or his retirement.

The employee’s incapacity to work must be duly certified by a physician.

The gross monthly compensation for temporary disability shall be determined by applying the 75% of the computation base determined in accordance with legal provisions (75% from the average monthly income in the last six months of the 12 months which represents the contribution period). The gross monthly allowance for temporary incapacity for work due to tuberculosis, AIDS, cancer, and some infectious disease and surgical emergencies established is 100%.

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RESTRAINT OF TRADE

Labour Code (LC)

As a general rule, during the execution of the contract the employee must abstain from committing any act which may harm the interests of the employer, either by competition or by disclosing confidential information of the employer of economic, technical or managerial nature, which might be accessible through the work performed.

Labour Code allows parties to insert a non-competition clause in the contract that the employee obliges to continue this commitment also after the termination of the contract, but only for a period not exceeding two years. The employer will have to pay the employee monthly allowance whose minimum is set by law. The clause will be valid only if in the contents of the contract are set the specific activities that are prohibited, the period through which the prohibition operates, the monthly allowance, those for whom it is prohibited to work for, as well as the geographical area where the employee might get in a real competition with the employer

INTELLECTUAL PROPERTY (IP)

Copyright Act (CA)

Usually, the economic rights on the works created by the employee under a labour contract belong to their author. If there is a contrary clause in the contract, its significance lies in the assignment of the rights of the author to the employer.

Such assignment has to be made for a certain term and in the absence of any indication of the term, its duration will be, by law, for 3 years from the date of delivery of the work.

After expiration the rights will revert to their author .

However, in the case of industrial property rights , according to law 64/1991 on patents , if the inventor is an employee , and in the absence of a more

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advantageous contractual clause for the employee , the right of invention belongs to the employer for inventions made by the employee under the execution of a labour contract that requested an inventive mission explicitly trusted, corresponding with his function. However, in this case the inventor shall be granted with an additional remuneration specified by contract .

BENEFITS

Social Security Act(SSA)

Labour Code(LC)

Romania has a national security system, to which employees belong by force of law. Free lancers and entrepreneurs also belong to the national security system provided that they pay the contributions.

Generally, the social security system provides the following compontents:

- unemployment insurance;

- health insurance;

- nursing care insurance;

- statutory pension insurance;

The employer and the employees share the costs of the contribution to the social security system.The extend of the tribute depends on the gross income of the individual employee and is deducted from his or her salary.

The Labour Code stipulates that the employer also has the following obligations:

-to ensure the safety and the health of employees in all aspects of work-to adopt labor protection rules and measures on health and safety at work

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-to prevent, assess and control hazards-to ensure all employees to risk of accidents and occupational diseases-to organize staff training

Other benefits paid by the employer to the employees are freely decided and not regulated by law.

DATA PROTECTION

Privacy Act (PA)

Romanian legislation regarding the protection of confidential data has been harmonized in accordance with the European Directive no. 46/1995.

Employers have the quality of personal data operators.

Operators handling employee data have the general obligation to ensure the confidentiality and the security of the processed data and to respect the rights of the employee regarding:

- the right to be informed

- the right to have access to the information registered

- the right to intervene and the right to object to the information registered

- the right of not being subject to individual decisions

- the right to address to the court

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TERMINATION OF EMPLOYMENT

Labour Code (LC)

The employment may terminate as follows:

- de jure, for example if the employee reaches the legal conditions for retirement, if the employee/ employer has died or ceased to exist, at the expiry date of the labour contract concluded for a determined period, etc.

- due to agreement of the parties, on the date agreed by them

- as a result of the will of one of the parties, in the cases and under the conditions stipulated by the Labour Code

The dismissal may be ordered for reasons related to the employee or for reasons unrelated to the employee. The employer may order dismissal for reasons related to the employee in the following circumstances:

a) where the employee has committed a serious or repeated violations of the rules of labor discipline or to the individual contract of employment or collective agreement applicable, as a disciplinary sanction;

b) if the employee is in custody for a period longer than 30 days, under the Code of Criminal Procedure;

c) If, by decision of the competent medical expertise, there is physical unfitness and / or mental health issue of the employee, which does not allow him to fulfill the duties corresponding to the position held;

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d) if the employee does not professionally meet the job in which was is employed.

Decision shall be issued in writing and, under the penalty of nullity, must be grounded in fact and in law and must include details of the term in which it can be challenged and the court to which it may be challenged.

Employees dismissed for reasons not related to them benefit of measures for fighting unemployment and of compensation provided by law and applicable collective bargaining agreement.

UNFAIR DISMISSAL

Labour Code (LC)

In order to avoid breaking the law or to commit a misuse of law, a dismissal for reasons unrelated to the employee have to occur when there is a true objective reason and only if that reason effectively prevents continuation of the employment relationship between the employer and the employee. According to the Labour Code, the cancellation of an employment has to be effective and has to be based on a real and serious cause.

In practice there is a tendency of the employers to use the economic crisis as a pretext to carry out the restructuring based on other purposes, including the dismissal of certain disagreeable employees. (Bucharest Court of Appeal, Decision 1707/2010)

NOTICE

Labour Code(LC)

The employees dismissed for phisical or mental unfitness, for professional misfit or for reasons that are not related to their person have the right to be notified at least 20 working days prior.

Employees have the same obligation if they decide to cease the employment relationship.

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Since the law requires a minimum period of 20 working days, nothing stops the parties to effectively fix by contract a longer period.

REDUNDANCY In case of a temporary reduction of activity for a period larger than 30 days, the employer is able to reduce the weekly working schedule from 5 days to 4 days, with a corresponding decrease in salary. However, it is mandatory for the employer to consult the trade union in advance.

PROTECTION FROM DISCRIMINATION AND HARASSMENT

Constitution

Equal Treatment Act (ETA)

Labour Code (LC)

Based on the Equal Treatment Act, the employer is expected to comply with the principle of equal treatment and non-discrimination in respect of:

a) completion, suspension, modification or termination of employment;

b) establishing and modifying of job duties, work or wages;

c) granting social rights other than wages;

d) training, improving, conversion and professional advancement;

e) application of disciplinary measures;

f) the right to join a trade union and to access the facilities granted by it;

g) any other terms of work performance, according to law.

It is against the law to discriminate against job applicants and workers, or to dismiss one on the basis of any of the following protected characteristics: gender, sexual orientation, genetic characteristics, age, disability, trade union membership or activity, religion, skin colour, national affiliation, political option,

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The discrimination can happen in the form of:

- direct discrimination

. indirect discrimination

- harassment

- sexual harassment

- assignment to a harassment

The victim of discrimination and harassment has the right to appeal, to refuse performance and to claim damages. He or she is also protected against being reprimanded for making demands on these rights.

PARENTAL AND CARERS RIGHTS

MATERNITY RIGHTS

Labour Code (LC)

Social Security Act (SSA)

Once an employee is pregnant, she must inform the employer through a letter about the state of pregnancy, attaching in that sense a certificate on the state of pregnancy issued by a physician.

Once the employer has been informed officially about the state of pregnancy of the employee, it will be forbidden to dismiss the employee throughout the pregnancy, maternity leave and parental leave

Pregnant and breastfeeding women enjoy certain protection regarding working

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conditions such as:

- they cannot work in harmful, heavy, dangerous or medically contraindicated environment; in such situations they shall be transferred to other types of employment, without a reduction in salary;

- they cannot be forced to work during night;

- during the working schedule, they have the right to receive two breaks of one hour each for breastfeeding and child care; at the mother’s specific request, the breaks will be replaced with a two hour reduction of the daily working schedule; these benefits don’t affect the wage.

The newmothers benefit of maternity leave (paid period without work) for 126 days.Maternity allowance is 85% of the average monthly earnings in the last 12 months.

Women after maternity leave must get the same salary increase as other collegues and may not be dismissed without proper reason.

PARENTAL RIGHTS

Labour Code (LC)

Governmental Ordinance no. 111/2010

The mother or the father may request paid leave for child raise up to the 2nd anniversary of the child. If the child has a handicap, the leave may be extended up to the 3rd anniversary of the child. The allowance is paid by the state and not by the employer.

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PATERNAL RIGHTS

Labour Code (LC)

Governmental Ordinance no.111/2010

Currently, fathers have two types of leave in terms of newborn baby:

1. Paternity leave for five days, which may be extended for an additional ten days if the fathers have completed a childcare course taken with the family physician.

2. One or two years of parental leave for growth and child care and 3 years of parental leave if the child has a handicap.

Although fathers in Romania enjoy a parental leave which is longer than in most EU countries, few of them decide to stay home with the child. Mostly, the reason of that is because they earn more than mothers and because the state pays only 85% of the net revenue obtained in the last 12 months, but in no case more than 3.400 RON.

According to the latest provisions, the parent that took the parental leave has to cease at least a month from his leave to the other parent, regardless of his choice. These provisions represent the implementation of the EU Directive 2010/18/ which obligates fathers to take part in the growth and care of children.

ADOPTION RIGHTS

Labour Code (LC)

Parents adopting a child enjoy the same benefits as blood parents.

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CARER’S RIGHTS/FLEXIBLE WORKING

Labour Code (LC)

The carers may request leave if the child is sick or needs special care. Otherwise there is no special protection for carers

TEMPORARY AND AGENCY WORKERS

Labour Code (LC)

In Romania, the provisions in the Labour Code regarding the rights of agency workers are mostly in accordance with the requirements of EU Directive 2008/104/EC.

The temporary work agent (a service provider) gives one of his employee (temporary employee) to a user, in order to accomplish for him specific tasks (under law terminology, a mission) with a temporary character. The employment contract is concluded between the temporary work agent and his employee for a determined period, usually for the time needed to accomplish the mission, time that cannot be larger than 24 months. However, this period may be extended up to 36 months.

During the mission, the user is liable for providing the working conditions to the temporary employer. The user has to immediatly notify the temporary work agent about any work accident or professional ilness that the temporary employer was subject to.

At the end of the mission the temporary employee may conclude an employment contract with the user.

PART-TIME EMPLOYEES

INSIGNIFICANT EMPLOYMENT

Labour Code (LC)

Romanian Labour Code regulates part-time work. This type of contract has the benefit of reducing uneployment and also covering specific needs of the future employer/employee. Usually the initiative belongs to the employer and the contract concludes if the future employee agrees.

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The law sets an upper limit to the number of hours of part-time work, wich has to be under the number of hours performed by a full-time employee in a week or in a month. The work duration of a part-time employee is not related to the daily duration, but to the weekly or monthly duration legally allowed for a full-time employee (40 hours per week and 170 hours per month). So, the part-time employee must not reach the limit of 40 hours/week or 170 hours/month.

In the same respect, the law does not fix any inferior time limit. The parties are freely allowed to agree the exact part-time work (i.e. 1,2,4,6 hours/day or week or as a monthly average).

In the case of which the employers request to be transferred from a part-time work schedule to a full-time work or viceversa, the employer shall be obligated, as possible, to take into consideration.

Other than the time limit, the part-time employment contract is subject to the same general rules provided by laws for any employment contract.

Insignificant Employment is not recognized in Romania.

CONSEQUENCES OF A BUSINESS TRANSFER

Law 67/2006 on the protection of employees in case of business transfer

If case of a business transfer, all rights and obligations of the transferor (the person who loses the employer position)arising from individual or collective labour contracts existing at the date of transfer, will be entirely transferred to the transferee (the person who becomes the employer).

The employment contracts will not terminate, but will be transferred to the transferee who will become the new employer under the contract of merger /

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transfer agreement between the two companies. The agreement must include provisions relating to the transferred employees.

In this respect, the transferor emits a collective decision of transfer, which also contains in the annex a list of the transferred employees effectively working on the transfer date, a decision that has the purpose to inform employees and become part of the contract work.

Prior to the transfer, both the transferor and transferee are obliged to inform in writing the employees' representatives or, where these are not set times appointed, the employees own at least 30 days before the date of transfer to be informed of:

- the date or the proposed date of transfer;- reasons of the transfer;- the legal, economic and social consequences of the transfer for the employees;- measures envisaged for employees;- conditions of employment and work.

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Template- Employment Law Summary - Globalaw - Romania 2013 (GP)

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