Romania: Employment Law Overview Romania 2021-2022

I. GENERAL OVERVIEW

1. Introduction

Romanian employment law is the product of constant changes made over the last years in order to establish equilibrium between the power of union organisations and the power of the employers. This has proven a hard task. As a result, Romanian legislation has both pro-employee regulations, being one of the few that establishes the mandatory reinstatement of wrongfully dismissed employees, allowing the union federations to participate in collective negotiations at the company level, as well as pro-employer regulations limiting the right to strike for employees under collective agreements.

2. Key Points

• Most disputes involve financial claims from employees that usually include overtime payment, granting of working conditions, bonuses, etc. Employers often face collective actions from employees regarding these financial claims. Unions usually promote such collective actions.
• Unions must represent 50%+1 of the employees in one company in order to be representative and part of a collective agreement. In order to still make the collective negotiations accessible to unions, the law allows union federations to participate in company level collective negotiations, as representatives of the member unions that do not reach the requirements to be representative, if the federations represent 7% of the employees in the industry sector.
• Employers have the right to regulate working hours, but special legal provisions limit this right.
• Great importance is given to the form of the documents drafted by the employer. Court cases usually involve verifying the form of the documents and a significant number of rulings are based exclusively on this aspect.
• Strict regulations apply to individual and collective dismissals. In case of unlawful dismissal, the employee has the right to reinstatement and is granted all financial rights for the entire period in which he was unlawfully dismissed. Dismissed employees will often sue for unlawful dismissal.

3. Legal Framework

Employment law in Romania is largely based on the following sources:

• the Constitution;
• European legal instruments –
• • European Union law (including Treaties, EU regulations and directives, as well as case law from the European Court of Justice);
  • protocols and recommendations of the European Convention for the Protection of Human Rights and Fundamental Freedoms; and
  • standards and practices established by the International Labour Organisation (ILO);
• the Romanian Labour Code;
• legislation and government decrees, especially –
• • Law nr. 62/2011 regarding the social dialogue;
  • Law no. 263/2010 on the public pension system;
  • Law no. 319/2006 on health and safety at the workplace (among others);
• case law – the provisions of the Labour Code can be interpreted through generally applicable and mandatory decisions of the Supreme Court (High Court of Cassation and Justice);
• interpretative decisions of the Constitutional Court which are mandatory and generally applicable;
• collective labour agreements;
• individual employment contracts.

4. New Developments

Lately, there have been a number of changes in the interpretation of employment law related legal provisions as a result of decisions taken by the High Court of Cassation and Justice, which issued rulings on working conditions, limiting the potential discrimination risk of specific legal provisions, especially regarding pension rights and working after the standard age for retirement, etc. Working hours, flexible schedules and overtime are still important issues that are raised, discussed and debated before the courts.

In 2020, changes were made to the Labour Code regarding stricter rules in order to limit employee harassment and discrimination. The changes also include involving third party specialists in the negotiation process, in alternative forms of dispute resolution and disciplinary procedures.

II. HIRING PRACTICES

1. Requirement for Foreign Employees to Work

In Romania, citizens of the EU or the EEA do not need a work and residence permit. Foreign citizens (who are not EU or EEA citizens) must obtain a work permit in order to perform activity as an employee. The work permit is issued by the Romanian Office for Immigration. As a rule, the work permit is issued for a one-year period. The number of working permits issued every year is limited and is determined by the government. In 2020, the maximum number of working permits that could be issued was the highest ever, with 30,000 new working permits made available. Non-EU and EEA citizens have the right to work in Romania under certain conditions:

• vacancies cannot be filled by Romanian citizens, citizens of UE/EEA or permanent residents of Romania;
• they fulfill special conditions regarding professional qualifications, experience and authorisation;
• they prove that their state of health complies with the activity they will perform and that they have not been convicted of crimes that are incompatible with the activity they carry out or intend to carry out in Romania;
• they are within the limits of the early contingency approved by government decision;
• the employer has regularly made contributions to the state budget;
• the employer shall effectively perform the activity used to obtain the working permit;
• the employer was never convicted for illegal work.

2. Does a Foreign Employer need to Establish or Work through a Local Entity to Hire an Employee?

In order to hire an employee under Romanian law, the employer has to have a national legal entity. Romanian law can also apply to employment contracts conducted between foreign employers and local employees, if the parties so choose. Employees of foreign companies can perform work in Romania based on their existing employment agreement, or can be dispatched to a Romanian company.

3. Limitations on Background Checks

For certain positions (such as technical ones) an authorisation (from a national authority), a degree or a certificate may be required. Individuals that do not hold the required authorisation, degree or certificate cannot be employed. Medical approval for the potential employee is mandatory, prior to commencing employment and the absence of such approval can lead to the annulment of the employment contract.

Individuals can be employed starting at the age of 16 (15 with parental consent and only for jobs that are appropriate for an individual development). Individuals under the age of 15 cannot be employed.

Private companies cannot conduct background checks, other than requiring information from the candidate and recommendations from previous employers. They can however, ask the candidate to present a criminal record issued by the competent authorities. The employer has to ask the candidate for a medical certificate that ascertains that the candidate is medically fit to be employed, since his medical fitness prior to the signing of the agreement is an issue of the employment agreement's validity.

Public companies and public institutions can ask the candidate to present proof of not belonging to a political party, a proof of not being a former collaborator of the communist political police ("Securitate"), fiscal information and other specific information that is relevant to the public company or institution.

4. Restrictions on Application/Interview Questions

There are limited legal provisions on hiring practices in Romania. The Labour Code states only that the employee has to be informed on the essential clauses of the individual employment agreement during the hiring procedure. Recognised companies usually implement good practices in hiring personnel and use human resources specialists in order to select potential hires. Private companies can organise a theoretical and/or practical contest in order to select their employees. As a rule, public institutions and companies have to organise such contests in order to select the employees.

Ordinarily, vacant positions that are to be filled by hiring new personnel are advertised in media and/or on specialised on-line sites with general access. For public institutions there are specific rules on publishing the available jobs on their own website and in the Official Bulletin (local or national editions). The employer can ask for a CV and select only some of the candidates to meet with. Job interviews are held either face-to-face, over the phone, or using live video messaging technology.

There are no rules or express limitations on what questions the employer can ask the candidate, but it is generally accepted that the questions need not be too personal. Also during the hiring process the employer has to pay attention not to discriminate any category of candidates. To this end, the questions that are asked should not refer to matters that are grounds for discrimination. However, these are not expressly stated rules and there is no case law regarding the hiring process, other than the results received from the contest organised by the employer.

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