1 Legal framework
1.1 Are there statutory sources of labour and employment law?
Yes. The Romanian labour legislation consists of:
- the Labour Code (3/2003); and
- the Social Dialogue Law (62/2011).
The Labour Code is the universal law which covers almost all issues relating to labour and employment, especially with regard to individual employment agreements. The Social Dialogue Law sets out the framework for collective labour relationships and labour conflicts.
Many other acts govern special situations or aspects relating to employment, such as:
- Law 319/2006 regarding health and safety at work;
- Law 67/2006 regarding the protection of workers within the framework of the transfer of undertakings;
- Law 476/2007 regarding employee information and consultation;
- Law 200/2002 regarding the equal treatment of men and women;
- Ordinance 137/2000 regarding the prevention and sanction of all forms of discrimination;
- Ordinance 96/2003 regarding maternity protection at work;
- Emergency Ordinance 158/2005 regarding holidays and indemnities pertaining to social security;
- Order 64/2003 regarding the form and content of individual employment agreements; and
- Law 81/2018 regarding remote working.
Extensive secondary legislation has been enacted under many of these laws.
1.2 Is there a contractual system that operates in parallel, or in addition to, the statutory sources?
Yes. Romanian law recognises collective bargaining agreements, which may be concluded at the following levels:
- economic sectors – these are not binding on an employer within the relevant sector unless it is a member of a signatory party (eg, an employers' organisation);
- company group – not very common; and
- company – currently the most common form of collective bargaining agreement.
The individual employment agreement is also an important source of law.
With regard to the hierarchy between the sources:
- an individual employment agreement may not include employee rights which are less favourable than those provided in an applicable collective bargaining agreement;
- a collective bargaining agreement concluded at a certain level may not include employee rights which are less favourable than those provided in a collective bargaining agreement concluded at a higher level; and
- the minimum basis of these rights is the applicable law.
1.3 Are employment contracts commonly used at all levels? If so, what types of contracts are used and how are they created? Must they be in writing must they include specific information? Are implied clauses allowed?
Individual employment agreements are mandatory at all levels, except for managing directors, who can (and should) conclude mandate agreements which are not governed by employment law. Most agreements are signed for an indefinite period, as Romanian law allows for fixed-term employment only in certain cases, which are exhaustively set out in the law.
All agreements must be in writing (Article 16 of the Labour Code).
Romanian law sets out a mandatory template for individual employment agreements, which all agreements must observe. Special clauses may be added, but only to the extent that these are in line with the law, according to Article 38 of the Labour Code. Employees are not entitled to waive any of the rights which are provided in their favour by the law. Any contrary provision in an agreement is null and void.
2 Employment rights and representations
2.1 What, if any, are the rights to parental leave, at either a national or local level?
The rights to parental leave are regulated at the national level. Romanian law provides for both:
- maternity leave, which is granted to mothers for pregnancy and childbirth for a period of 126 calendar days; and
- parental leave, which can be taken by either of the child's parents. Parental leave can be taken by parents who, in the two years prior to the child's birth, have earned taxable income from employment, self-employment, IP rights, agricultural activities, forestry or fish farming for at least 12 months.
2.2 How long does it last and what benefits are given during this time?
Parental leave is granted for a maximum period of two years from the birth of the child or for a period of three years in the case of disabled children.
Maternity leave lasts for 126 days, of which at least 42 must be taken after the birth of the child; the difference up to 126 days can be taken before or after the child's birth.
During parental leave, the monthly allowance is equal to 85% of the average net income achieved in the last 12 months of the last two years preceding the child's birth. Currently, the monthly allowance is capped at RON 8,500.
During maternity leave, the monthly allowance is equal to 85% of the average gross monthly income in the last six months, capped at 12 minimum gross national salaries (for 2022, the national minimum gross salary amounts to RON 2,550).
2.3 Are trade unions recognised and what rights do they have?
Trade unions are recognised under Romanian law and have the status of legal entities. They are usually organised at the company level, but may form federations and confederations and thus become influential at a higher level.
Trade unions are the most powerful form of representation of employees' interests. Provided that they are representative, their main right is the right to collective negotiation – more precisely, the right to negotiate and to sign collective bargaining agreements. If the employer delays or hinders collective negotiations or does not accept certain claims, the trade union represents the employees in collective labour disputes, which are resolved at first instance by conciliation with the support of the authorities, but may lead to arbitration, mediation or even a strike.
At the company level, employees are represented either by trade unions or, as an alternative, by employee representatives who are elected by the employees and have reduced powers compared to unions. Collective bargaining agreements will be negotiated and signed on behalf of the employees by:
- trade unions which are representative;
- a federation, where there are unions which are not representative but are affiliated to such federation, provided that the federation is representative of the relevant economic sector; and
- employee representatives, where there is no trade union.
2.4 How are data protection rules applied in the workforce and how does this affect employees' privacy rights?
As in all other EU member states, the EU General Data Protection Regulation (GDPR) applies in Romania; hence, the obligations arising from the GDPR must be observed.
Certain particularities must be observed by employers operating monitoring systems by means of electronic communication or video surveillance, based on a legitimate interest. In such cases, the employer must:
- base its legitimate interest on legitimate reasons and act in favour of the interests, rights and liberties of the data subjects;
- inform employees in advance, thoroughly and clearly;
- consult with the trade union or the employee representatives in advance;
- ensure that no other milder measures have proved to be efficient for the employer's purpose; and
- ensure that the storage duration for the purpose of processing is proportionate; except for cases expressly provided by the law or well-justified cases, this will be a maximum of 30 days.
Documentation in the register of processing activities plays a decisive role in this regard. Written evidence that an employee received and understood a corresponding notification before his or her data was processed is particularly important.
2.5 Are contingent worker arrangements specifically regulated?
Romanian employment law does not contain express provisions on contingent workers. The legislative framework provides for the following situations, which are considered atypical:
- fixed-term employment, which is possible only in certain exhaustively regulated cases, e.g. for specific projects;
- temporary work, where an employee is employed (usually on a fixed- term basis) by a temporary work agency that puts him or her at the disposal of a beneficiary, which has authority over the employee;
- freelance work, where a person offers his or her services on an independent basis on the market. To do so, the person must officially register a business – usually as an ‘authorised natural person' – with the Commercial Register. Agreements with freelancers must be carefully drafted and executed, to avoid them being regarded by the tax authority as false self-employment based on criteria expressly provided for by law; and
- day labourers, who may be employed as such to undertake non-skilled activities in certain areas (eg, expositions, promotion, catering, restaurants, agriculture) (Law 52/2011) for a limited period of up to 90 days per year for the same beneficiary, up to a maximum period of 120 days per year, irrespective of the number of beneficiaries.
3 Employment benefits
3.1 Is there a national minimum wage that must be adhered to?
Romania is a low-wage country compared to many Western EU member states. It provides for a national minimum wage, which traditionally is increased every year by government decision.
Currently, the minimum wage provided by law for full-time work (167.33 hours per month) amounts to RON 2,550 gross per month.
By way of derogation, employers in the construction industry (as defined in Article 60, paragraph 5 of the Fiscal Code) must pay all employees a monthly minimum wage of RON 3,000 gross.
3.2 Is there an entitlement to payment for overtime?
Yes. According to Article 122 of the Labour Code, ‘overtime' – defined as the number of hours exceeding 40 per week – must be compensated by a corresponding amount of paid free hours within 90 calendar days. If this is not possible, the employee is entitled to an overtime allowance amounting to at least 75% of the hourly base salary for each hour of overtime (Article 123 of the Labour Code).
3.3 Is there an entitlement to annual leave? If so, what is the minimum that employees are entitled to receive?
Romanian employees are entitled to at least 20 working days of annual leave (Article 145 of the Labour Code), of which there must be at least one continuous period of 10 working days. Of course, longer leave periods can be agreed individually or collectively.
3.4 Is there a requirement to provide sick leave? If so, what is the minimum that employees are entitled to receive?
According to Emergency Ordinance 158/ 2005, all persons insured in the social security system (eg, employees) benefit from sick leave and a corresponding allowance, based on a medical certificate issued by the competent doctor. The medical certificate must be submitted to the employer by the fifth of the month following that in which the sick leave was taken.
The sick leave allowance is granted in principle for a period of maximum 183 days within a year, calculated from the first day of illness. Starting from the 91st day of illness, sick leave may be extended by a specialised doctor, with the approval of a social security expert, up to a total of 183 days.
The allowance during the sick leave amounts to 75% of the average gross monthly income in the last six months, capped at 12 minimum gross national salaries (for 2022, the national minimum gross salary amounts to RON 2,550). For serious diseases expressly recognised by law, a sick leave allowance of up to 100% may be granted.
3.5 Is there a statutory retirement age? If so, what is it?
Yes, the Public Pension Law (263/ 2010) stipulates a statutory retirement age of 65 years for men (born after March 1950) and 63 years for women (born after January 1967). For men and women born before these dates, the retirement age is determined based on the month and year of birth; a schedule with the corresponding retirement age for each case is provided by law.
A pension is due to persons who, on the date of retirement, cumulatively meet the conditions on:
- the statutory retirement age (according to birth date); and
- the minimum contribution period provided by law.
For both women and men, the minimum contribution period is 15 years, whereas the complete contribution period is 35 years. Depending on the birth date, the minimum and maximum contribution period may be different (again, a schedule is provided in the applicable law).
4 Discrimination and harassment
4.1 What actions are classified as unlawfully discriminatory?
The Romanian Labour Code prohibits direct and indirect discrimination, discrimination by association and harassment or victimisation based on the criteria of:
- social origin;
- genetic traits;
- sexual orientation;
- chronic non-contagious disease;
- HIV status;
- political choice;
- family situation or responsibility;
- membership or union activity; and
- membership of a disadvantaged category.
‘Direct discrimination' is defined as an act of distinction, exclusion, restriction or preference, based on one or more of the above criteria, which has as its purpose or effect the refusal, restriction or removal of the recognition, use or exercise of the rights provided in the labour legislation.
‘Indirect discrimination' is any provision, action, criterion or practice which is apparently neutral, but has the effect of disadvantaging a person based on one of the above criteria (certain exceptions are provided for by law).
‘Discrimination by association' consists of an act of discrimination committed against a person who, although he or she is not covered by any of the above criteria, is associated or presumed to be associated with one or more persons belonging to such category of persons.
‘Harassment' consists of any type of behaviour that is based on one of the criteria above which has as its purpose or effect the impairment of a person's dignity and leads to the creation of an intimidating, hostile, humiliating or offensive environment. In 2020, a series of new provisions regarding moral harassment in the workplace were introduced in a special law against discrimination (Ordinance 137/2000). These new rules require employers to adopt specific measures in this respect. Significant fines for failure to comply with the law are applicable.
4.2 Are there specified groups or classifications entitled to protection?
While everyone is protected against discrimination based on the criteria set out in question 4.1, the Labour Code puts particular emphasis on the protection of employees. The protected classes are mainly those mentioned under question 4.1 – that is:
- social origin;
- genetic traits;
- sex and sexual orientation;
- chronic non-contagious disease;
- HIV status;
- political choice;
- family situation or responsibility;
- membership or union activity; and
- membership of a disadvantaged category.
4.3 What protections are employed against discrimination in the workforce?
According to the Labour Code, employers must include rules on compliance with the principle of non-discrimination and the removal of any form of violation of employees' dignity in their internal regulations (which are mandatory for all companies).
Employers must also take any measures to prevent and combat acts of moral harassment at work. In this respect, the employer's internal regulations must provide for disciplinary sanctions for employees who commit acts of moral harassment at work.
Ordinance 137/2000 further stipulates that no employee shall be sanctioned, dismissed or discriminated against directly or indirectly – including with respect to salary, professional training, promotion or extension of the employment relationship – due to the fact that he or she was or refused to be subjected to moral harassment at work.
4.4 How is a discrimination claim processed?
A discrimination claim is generally processed based on the procedure stipulated in the employer's internal regulations. The internal regulations must include a special section on the settlement of individual labour disputes, individual claims or complaints of employees.
In addition, anyone who considers that he or she has been discriminated against may notify the National Council for Combating Discrimination, a specialised authority, within one year of the date on which the discriminatory act or deed occurred or the date on which he or she became aware of its commission. The council will investigate the claim based on the evidence submitted by the parties and will issue a decision within 90 days. The council's decision can be appealed before the administrative court within 15 days.
Also, anyone who considers himself or herself to be discriminated against may bring a claim in a court of law for damages and the restoration of the situation prior to the discrimination, in accordance with the common law. The limitation period for such claims is three years.
4.5 What remedies are available?
The law does not expressly stipulate specific remedies in case of discrimination. Such claims will be decided on a case-by-case basis through the settlement of the discrimination claim, based on either the employer's internal regulations or the procedure submitted by the National Council for Combating Discrimination. Certain remedies are specifically provided by law for moral harassment at work (see question 4.6).
Nevertheless, as mentioned in question 4.4., anyone who considers that he or she has been discriminated against may bring a claim in a court of law for damages and the restoration of the situation prior to the discrimination.
Any employee who commits discriminatory acts or deeds may also be subject, on a case-by-case basis, to disciplinary sanctions imposed by the employer or to sanctions for misdemeanours or criminal offences imposed by the state authorities.
4.6 What protections and remedies are available against harassment, bullying and retaliation/victimisation?
Under the law, ‘moral harassment' consists of a series of behaviours which have as their purpose or effect a deterioration of the working environment by:
- infringing the rights or dignity of an employee;
- affecting his or her physical or mental health; or
- compromising his or her career.
- hostile or unwanted conduct;
- verbal comments;
- actions or gestures; and
- stress and physical exhaustion.
If it finds that an act of moral harassment at work has been committed, the competent court may oblige the employer to:
- undertake all necessary measures to stop any acts or deeds of moral harassment at work regarding the employee;
- reintegrate the harassed employee into the workplace;
- pay compensation in an amount equal to the equivalent of the salary rights of which the employee was deprived;
- pay compensatory and moral damages to the employee;
- pay the costs of psychological counselling that the employee needs to recover from the harassment, for a reasonable period established by the occupational physician; and
- modify the disciplinary records of the employee.
The National Council for Combating Discrimination may also oblige the employer to:
- undertake all necessary measures to stop any acts or deeds of moral harassment at work regarding the employee; and
- pay the costs of psychological counselling that the employee needs to recover from the harassment, for a reasonable period established by the occupational physician.
An employer's failure to undertake any necessary measures for combating moral harassment at work or to stipulate disciplinary sanctions in its internal regulations will trigger a substantial fine ranging between RON 30,000 and RON 50,000.
5 Dismissals and terminations
5.1 Must a valid reason be given to lawfully terminate an employment contract?
Unilateral termination by the employee (resignation) is possible at any time and does not require a reason.
In contrast, unilateral termination by the employer (dismissal) always requires a valid reason; Romanian labour law does not allow ordinary termination by the employer. The reasons for dismissal exhaustively prescribed by the Labour Code are as follows:
- Reasons relating to the employee (ie, subjective reasons) according to Article 61 of the Labour Code:
- serious or repeated disciplinary misconduct (disciplinary dismissal);
- preventive arrest of the employee for more than 30 days;
- physical or psychological incapacity of the employee which prevents him or her from fulfilling his or her professional tasks, as determined by the competent medical authorities; or
- the employee's failure to correspond to the relevant position from a professional point of view.
- Reasons unrelated to the employee (ie, objective reasons):
- the elimination of the employee's position (termination for operational reasons).
- These dismissals are regarded as collective and trigger a more complex procedure with the authorities if the number of employees affected during a 30-calendar-day period is at least:
- 10, where the total number of workers is between 21 and 99;
- 10% of the workforce, where the total number of workers is between 100 and 299; and
- 30, where the total number of workers is at least 300.
In all cases mentioned above, a special procedure must be implemented. In case of litigation, the courts will take a strict approach in assessing whether the dismissal conditions have been fulfilled; any formal mistake may lead to the annulment of the dismissal.
In case of dismissal due to the employee's incapacity or failure to correspond to the position, the employer must offer a vacant alternative position to the affected employee. If no alternative position is available, the employer must request the support of the National Employment Agency.
5.2 Is a minimum notice period required?
In case of dismissal due to the employee's incapacity or failure to correspond to the position, or dismissal for operational reasons, the minimum notice period is 20 working days.
There are no legal provisions stipulating different notice periods depending on factors such as the period of employment or age.
In the case of resignations, the maximum notice period is 45 working days for senior employees and 20 working days for other employees. The employer may waive this notice period, as it is considered to be stipulated in its favour.
5.3 What rights do employees have when arguing unfair dismissal?
Any dismissal that breaches the legal conditions is absolutely (ie, incurably) null and void, under Article 78 of the Labour Code. Therefore, any employee who considers that he or she has been unfairly dismissed can challenge such dismissal in court.
If the court confirms the invalidity of the dismissal, it will annul it and oblige the employer to pay the employee compensation equal to the entire remuneration from which he or she would have benefited in the absence of the dismissal. This remuneration will be indexed, increased and updated, if necessary.
At the employee's express request, the court will order that he or she be restored to the position in which he or she was in before the dismissal – that is, it will order the employee's re-employment. In the absence of such claim from the employee, the employment contract will end de jure once the court's decision becomes definitive.
5.4 What rights, if any, are there to statutory severance pay?
The law provides only that in case of dismissal for operational reasons, employees may receive severance pay subject to the provisions of the law or the applicable collective bargaining agreement. In the absence of such provisions, there is no legal obligation to pay severance pay in such cases.
Thus, currently, in the usual case of dismissals for operational reasons, there is no legal obligation to pay severance pay, unless otherwise stipulated in an applicable collective bargaining agreement or otherwise at the company level.
6 Employment tribunals
6.1 How are employment-related complaints dealt with?
Romanian employment disputes generally concern the conclusion, execution, modification, suspension and/or termination of individual employment agreements or collective bargaining agreements, as well as the relationship between the parties to such agreements.
Individual labour disputes are usually resolved at the internal company level through a complaints-handling mechanism implemented by the employer. The employer is also entitled (although not obliged) to implement an internal dispute settlement procedure, during which the parties try to resolve the dispute amicably with the support of a specialised external adviser. If a settlement is not reached or fails, the parties can file suit before the competent tribunal.
Collective labour disputes arise only with regard to the initiation, conduct or finalisation of negotiations for collective bargaining agreements. If they arise at the company level, a first step is a mandatory settlement procedure between the employer and the trade union/employee representatives, with the support of the local labour authorities. If the dispute remains unresolved, the parties can continue with mediation or arbitration (or both, if agreed); and the dispute may ultimately lead to a strike.
6.2 What are the procedures and timeframes for employment-related tribunals actions?
Individual labour disputes are brought before the tribunal at the place where the claimant has his or her domicile and/or place of work.
The law provides for a celerity principle, according to which the maximum term for a hearing is 10 days. Unfortunately, however, this is not respected in practice. Employment-related litigation (eg, following an action for unfair dismissal) usually takes up to one year.
The first-instance decision can be appealed to the competent court of appeal, but remains enforceable. As a principle, non-compliance with a court decision following unfair dismissal is considered a criminal offence.
7 Trends and predictions
7.1 How would you describe the current employment landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
Since the outbreak of the COVID-19 pandemic, the employment relationship has generally become more flexible. In particular, the concept of remote working, which was recognised under Romanian law in 2018, has gained importance. In the near future, we expect a heated debate on the pros and cons of remote working and the issues related thereto, such as the electronic signature of employment-related documents.
Whistleblowing is set to become another hot topic in Romania. The country has not yet incorporated the relevant EU directive into national law; the draft law is subject to debate and is expected to undergo further modification before its adoption.
Another interesting area is collective labour law, where changes can also be expected in the near future. These concern issues such as:
- the incorporation of trade unions;
- an increase in the powers of such organisations; and
- extensions regarding the applicability of sectoral collective bargaining agreements.
8 Tips and traps
8.1 What are your top tips for navigating the employment regime and what potential sticking points would you highlight?
Although a substantial part of the Romanian employment regime is based on European law, there are still considerable differences between the legal systems of different EU member states. The Romanian employment regulations are still relatively rigid and bureaucratic – as is the practice more widely – and the law is very rigorous regarding the rights of employees (it is not possible to renounce rights recognised by the law in favour of the employee).
When dealing with employment-related matters, one should not rely on experience from other countries, as this might not lead to the desired effects and could result in time and cost-consuming litigation. In order to mitigate the risks relating to differences both in legislation and in cultural backgrounds, consultants with long-term cross-border experience should be engaged.
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.