jurisdiction
- Angola
- Austria
- Belgium
- Bosnia and Herzegovina
- Brazil
- Bulgaria
- China
- Colombia
- Croatia
- Czech Republic
- France
- Germany
- Hong Kong
- Hungary
- Italy
- Kenya
- Luxembourg
- Mauritius
- Mexico
- Monaco
- Morocco
- Mozambique
- Netherlands
- North Macedonia
- Peru
- Poland
- Portugal
-
Romania
- Singapore
- Slovakia
- Slovenia
- South Africa
- Spain
- Sweden
- Switzerland
- Turkey
- Ukraine
- United Kingdom
1. Dismissal of employees
1.1 Reasons for dismissal
There are two alternative sets of reasons for dismissing employees:
- Employee-related reasons: (1) in case of disciplinary misconduct (in case of a severe breach, or more repeated breaches of work discipline rules or of those rules set forth in the individual employment agreement, collective bargaining agreement or internal regulations / policies), as disciplinary sanction; (2) in case of physical / mental incapacity, as duly ascertained by the relevant medical bodies; (3) in case of professional inadequacy; (4) in case of placement in police custody or house arrest for more than 30 days; or
- reasons not related to the employee: redundancy following workforce restructuring, based on e.g. economic, financial or organisational grounds (by way of either individual or collective procedures).
1.2 Form
Written form is necessary. The employer must adopt an individual termination decision, providing at least the following information: (i) the legal and factual grounds for dismissal; (ii) the notice period to which the employee is entitled (when this is the case); (iii) the dismissal priority criteria (in case of collective dismissals); (iv) a list of all available positions at the employee’s level and the deadline by which the employee may choose to fill a vacancy, in case of dismissal for physical / mental incapacity or professional inadequacy; (v) the legal term during which the dismissal decision may be challenged; and (vi) the competent court before which the dismissal decision may be challenged.
In case of dismissal due to disciplinary misconduct, physical / mental incapacity or professional inadequacy, the employer must conduct a prior investigation / evaluation procedure of the employee.
1.3 Notice period
The statutory minimum notice period is 20 working days and is applicable in case of dismissal for physical or mental incapacity, as well as dismissal for professional inadequacy, and/or individual or collective redundancies. Individual or collective labour agreements may provide for longer notice terms.
Notice terms shall not apply in case of disciplinary dismissals or dismissal for professional inadequacy, if the employee is under his/her probation period.
1.4 Involvement of employee representatives
No specific statutory involvement in the individual dismissal process. However, employees have the right to request employee representatives to assist them during the individual dismissal procedure for e.g. disciplinary reasons or professional inadequacy. Note, works councils are not currently regulated by nor allowed under Romanian labour law.
1.5 Involvement of a union
No specific statutory involvement in the individual dismissal process. However, employees have the right to request trade union representatives to assist them during the individual dismissal procedure for e.g. disciplinary reasons or professional inadequacy.
In case of collective dismissal, trade union involvement is mandatory. The employer has the obligation to inform and consult with the trade union on methods of mitigating the impact of the collective redundancy – in this respect, the employer must reply to the trade union on the mitigating factors, in a specific timeframe and also provide the trade union justifications for the redundancy-related measures being taken.
1.6 Approval of state authorities necessary
Not necessary. The approval or prior notification of state authorities may be required in case of e.g. collective redundancies within state-owned companies or within specific industries, as well as part of specific terms of state-aid schemes to which the employer is benefitting or has benefitted.
1.7 Collective redundancies
The employer must follow a specific collective redundancy process, in terms of procedural steps and relevant deadlines, as strictly prescribed by Romanian labour law. The collective redundancy process includes, inter alia, notifying and consulting with the trade union or employee representatives on the redundancy measure(s) and informing the territorial labour authority, as well as the territorial workforce agency about the proposed redundancy measure(s) and the outcome of trade union/employee representative consultations. The collective redundancy process applies if the employer plans to initiate redundancies, such as those listed below, within a timeframe of 30 calendar days:
- at least ten employees, if the total number of employees at the company level ranges between 20 and 100 employees; or
- at least 10% of employees, if the total number of employees at the company level ranges between 100 and 300 employees; or
- at least 30 employees, if the total number of employees at the company level is at least 300 employees.
1.8 Summary dismissals
Termination without notice (summary dismissal) is only lawful in case of disciplinary dismissal (for severe or repeated breach of work disciplinary rules or of those rules set forth in the individual employment agreement, collective bargaining agreement or internal regulations, but subject to a prior investigation). Also summary dismissal is allowed in case the employee is placed under arrest or under house arrest for more than 30 days. If there is a valid reason for summary dismissal, the employer should not wait more than 30 days after becoming aware of the reasons triggering the dismissal before approving the dismissal.
1.9 Consequences if requirements are not met
The dismissal will be null and void and, upon request, the employee can be reinstated into his/her former position within the company, which triggers the obligation to pay wages and salary benefits corresponding to the period from dismissal effective date and until reinstatement date, as well as compensatory damages. . Moral damages and court expenses may also be awarded, depending on the evidence brought by the employee before the court. Moral damages aim at repairing a moral prejudice sustained by the employee who is a victim of an illegal dismissal and are separate from material damages (e.g. the European Court of Human Rights awarded moral damages of up to EUR 5,000 for the stress felt by an employee going through court proceedings).
1.10 Severance pay
There is no statutory minimum or maximum severance payment. However, the employee may be entitled to severance payments pursuant to his/her individual employment agreement and/or applicable collective bargaining agreement and/or internal regulations/policies.
1.11 Restrictive covenants
Post-contractual non-competition clauses are only valid if the individual employment agreement specifies:
- the activities prohibited; and
- the amount of the monthly indemnification during the restricted period (at least 50% of the average of the last six monthly gross salaries before the employment termination or, in case the employee is hired for less than six months, the average of the monthly gross salaries to which the employee was entitled during his/her employment ); and
- the duration of the non-competition clause (the legal maximum duration being two years);
- the third parties for whom the employee may not work; and
- the restricted geographical area(s).
1.12 Miscellaneous
If the reason for an individual or collective redundancy results from the change of employer control or transfer of undertakings, the court may invalidate the dismissals.
2. Dismissal of managing directors
Under Romanian company law, the equivalent of the position of ‘managing director’ may either be the position of ‘director’ in a joint-stock company (‘SA’) or in a limited liability company (‘SRL’) (in Romanian, ‘administrator’), but also the position of ‘general manager’ in a SA or SRL (in Romanian, ‘director general’). For the sake of clarity, both roles are referred to below as ‘managing director’. The managing director is (i) appointed by and (ii) has his or her mandate powers established and revoked by the relevant management body of the employer (either the general meeting of shareholders, in case of directors or the board of directors in case of general managers). Mandate contracts between the managing director and an SA or SRL could also be concluded; such agreements are deemed ‘commercial agreements‘ governed by the rules of the Romanian Civil Code (and not by Romanian Labour Code).
2.1 Reasons for dismissal
Under Romanian corporate law, the managing director may be dismissed without cause, pursuant to the corporate decision of the competent management body in this respect. In the event a management agreement has also been concluded between the managing director and the SA or SRL, dismissal must also follow the terms and conditions (including specific reasons) set forth in the management agreement.
2.2 Form
A written corporate decision by the competent management body is needed in order to revoke the managing director. In order to be valid, this decision must comply with the specific requirements provided under Romanian company law (e.g. call or meeting formalities, quorum, etc.).
If a management agreement has been entered into, the managing director must additionally be provided with formal notice of the revocation in accordance with the provisions of the said management agreement.
2.3 Notice period
There is no statutory notice period. The notice period may be set forth in the corporate decision of the competent management body approving the revocation of the managing director or in the specific management agreement.
2.4 Involvement of employee representatives
No involvement.
2.5 Involvement of a union
No involvement.
2.6 Approval of state authorities necessary
Not necessary. Approval or prior notification of state authorities may be required in case of e.g. specific industries.
2.7 Collective redundancies
Not applicable.
2.8 Summary dismissals
Not applicable.
2.9 Consequences if requirements are not met
The managing director may be revoked at any time by the relevant corporate body of the company. However, the managing director may seek compensation in case the dismissal was without cause.
Also, the managing director may require additional compensation, depending on the terms of his/her management agreement or rules of the Romanian Civil Code.
From a corporate law perspective, not meeting the relevant requirements upon adopting the decision of the competent management body of the employer may lead to the invalidity of this decision.
2.10 Severance pay
There is no statutory severance payment. Severance payments may be provided for in the corporate decision of the competent management body approving the revocation and/or in the management agreement.
2.11 Restrictive covenants
Non-competition clauses may be set out in the resolution of the general meeting of shareholders approving the appointment of the managing director and/or in the management agreement. Such clauses are in general enforceable, provided that rules of competition law and civil law are observed.
2.12 Miscellaneous
In the case of a general manager (in Romanian ‘director general’) of a S.R.L., an individual labour contract may also be concluded (please see above).