New Proposals for Amending the Romanian Labour Code

Not happy with the latest amendments to the Labour Code, trade unions are striving to change the situation in their favour.

Employees against employers

Only one year from the latest important changes to the Romanian Labour Code, one of the country’s biggest trade unions drafted a project for amending again the Labour Code. The project is co-financed by the European Social Found though the Operational Programme for Human Resources Development 2007-2013.

The trade unions see the changes from 2011 as favourable to employers and are trying to bring the balance back in their favour.

Main changes proposed

First, one of the main changes is related to the value of the minimum wage on the economy, aiming to increase its value to be equal or higher than 50% of the value of the medium net salary communicated by the National Statistics Institute. According to the project, the minimum gross salary should exceed RON 1,050.

A second important change refers to the criteria for collective dismissals. Trade unions propose that, when establishing the priority order upon dismissal, performance objectives should not be used as employee tie-breaking criteria.

Third, other changes are envisaged connected to performance objective – one of the biggest employee complaints. The promoters of the project claim that the possibility of the employer to unilaterally establish performance objectives may lead to abuse.

The amendments’ aim is that establishment of performance objectives be made via negotiation between the employer and the employees’ representatives, and established on the category of employees through the applicable collective bargaining agreement or internal regulation.

Moreover, non-fulfilment of the performance objectives should not trigger dismissal for professional incompliance, as the labour law currently provided. Rather, it should be a condition for a higher salary or for promotion.

To this end, a special clause may be negotiated between the employer and the employee and inserted in the individual employment agreement: the “performance objective clause”.

Non-compete clauses

The trade unions believe that the non-compete clause should also be reconsidered. Currently, such a clause is effective only after termination of the employment relationship. The new proposals envisages that a non-compete clause be effective only during the employment agreement. Only exceptionally could it be applied after the termination of the employment relationship.

Another change refers to the possibility granted to the employer to unilaterally denounce the non-compete clause at any time during its applicability. Also, indemnity amount is envisaged to vary between 25% of the base salary if the clause is applicable during the execution of the employment agreement, and 50% from the average of the last six months’ gross incomes (as is currently regulated) if the clause is effective after termination of employment.

More envisaged changes

Like the above, it is envisaged that the confidentiality clause be applicable only for the duration of the agreement and, only by exception, after its termination – but only for certain information and for a limited time.

Besides the probation period, to determine the aptitudes of employees in the private sector, other forms of examination can be used, such as competition or exam.

Mandatory payment of an indemnity if the individual employment agreement is terminated by mutual agreement should be also regulated. In practice, such an indemnity is usually paid by the employer, but trade unions propose that this be expressly regulated in the Labour Code.

The duration of the individual employment agreement concluded for a determined period should be extended from three years to a maximum of five years.

It was also proposed that the concept of working from home (telemunca) be expressly regulated in the Romanian Labour Code – already done in practice but not regulated.

The social dialogue law

Unions also want to change the social dialogue law.

Currently, collective bargaining agreements, trade unions, employers unions and social dialogue between employees and employers are regulated under Law no. 62/2011 regarding social dialogue. Trade unions’ proposals include some significant changes in this respect as well, mainly with a view to assure more protection for employee’s representatives in the trade unions.

Even if some of trade unions’ proposals are welcomed, most aim to protect solely employees. It remains to be seen what the position of the employer’s unions will be and whether the proposals will be implemented into law.

It is envisaged that the confidentiality clause be applicable only for the duration of the agreement and, only by exception, after its termination – but only for certain information and for a limited time.