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Compensation for working hours and annual leave are topics that often spark controversy in Romania. Existing legislation leaves many questions unanswered, and differing interpretations can lead to confusion in practice.
In this context, the recent intervention of the High Court of Cassation and Justice (HCCJ), through a series of landmark decisions, provides welcome clarification on matters of utmost importance, such as:
- compensation for work performed on weekly rest days;
- payment in lieu of unused annual leave.
These rulings are binding and will change the way employers and employees manage working time and annual leave.
Below we briefly analyse the main conclusions drawn from these rulings and their practical implications.
I. Compensation for work performed on weekly rest days
Decision No. 415/2025 of the HCCJ—Panel for the Resolution of Legal Issues—in interpreting Article 137 para. (5) of the Labour Code, establishes that compensation for work performed on weekly rest days—equal to twice the compensation for overtime work—is owed to employees, even if the work performed on such days does not exceed normal working hours; thus, the right to compensation is linked to the nature of the day (weekly rest day), not to exceeding the standard hours, which requires employers to maintain separate records of weekend work and excludes “absorbing” it into the 40-hour standard to avoid payment.
Art. 137 para. (5) of the Labour Code establishes that, in exceptional situations, when weekly rest days are granted cumulatively after a continuous period of work of up to 14 calendar days, employees are entitled to double compensation for overtime work (equivalent to a minimum of 150% of the base salary). The HCCJ’s ruling clarifies that this compensation is not contingent on the overtime nature of the work, but is due simply because the weekly rest period—a fundamental right of the employee—has been affected.
It should be noted that, even when rest days are not accumulated, the weekend premium remains mandatory, and its amount must be established through negotiation and expressly included in the individual or collective employment contract. In practice, this is frequently applied as a percentage of the base salary.
Hours worked on rest days exceeding the legal work limit must be compensated both through the weekend premium (negotiated) and through a premium of at least 75% for overtime.
II. Payment in lieu of unused annual leave
Court practice has long been inconsistent regarding the point at which the statute of limitations begins to run for claims concerning payment of unused vacation time. The issue was most evident in cases where an employee had not taken their vacation during the employment relationship and sought monetary compensation upon termination of the contract.
Decision No. 40/2026 of the High Court of Cassation and Justice provides two essential clarifications that change the approach to this issue.
Firstly, the three-year statute of limitations begins to run only upon termination of the contract—the right to monetary compensation arises only upon termination of the employment relationship, pursuant to Art. 268 para. (1) let. c) in conjunction with Art. 146 para. (2) and (3) of the Labour Code. Until then, the employee cannot claim payment for unused days, and thus the statute of limitations does not begin to run until after the termination of the contract.
Secondly, compensation for leave older than 18 months is possible only if the employer did not provide the actual conditions for taking the leave—the Labour Code permits the granting of unused leave within 18 months of the year following the year in which the right arose. The HCCJ has clarified that unused days of leave beyond that threshold may be compensated if the employer did not provide the employee with the actual opportunity to take them. Conversely, if the employee had the opportunity to take the leave and refused, the right to compensation for those days no longer exists. This approach is also consistent with the case law of the Court of Justice of the European Union regarding the protection of paid leave.
This ruling brings clarity and predictability regarding the right to leave: employees may request compensation for unused days if the employer did not offer them the opportunity to take them, and employers must ensure actual conditions for taking leave, otherwise risking having to pay compensation for those days.
III. Takeaway
These two HCCJ decisions are important because they establish clear and predictable rules regarding compensation for unused vacation time and work performed on weekly rest days. They provide both employees and employers in Romania with solid legal guidelines for the proper application of labour law. With this in mind, the following conclusions and recommendations are essential:
A. Conclusions
- The weekend premium is payable to employees even if the work performed on these days does not exceed normal working hours;
- The statute of limitations for the value of unused leave begins only upon termination of the contract, not during the course of the employment relationship.
- Compensation for unused vacation days after the statutory 18-month period is possible only if the employer did not give the employee the opportunity to take them.
B. Recommendations for employers
- Clearly record hours worked on rest days and include in contracts the amount of the weekend premium and method of calculation.
- Ensure that all employees have a realistic opportunity to take their leave.
- Review internal policies regarding leave scheduling to avoid the accumulation of unused days and potential requests for compensation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
