jurisdiction
1. Hiring Employees
1.1. The Employment Contract | |
| Written form of employment contracts | A labour relationship is created by an employment contract made in writing in the Romanian language. |
| Presumption in the absence of a written contract and record | Such a presumption is not expressly regulated under the law.. However, in case an employment has been conducted de facto, the parties may claim in court that such an employment contract exists and was verbally concluded, and the corresponding rights and obligations that are due. In addition, the law expressly indicates that the employee is entitled to corresponding remuneration for the work performed based on a null contract. |
| Registration with the competent labour inspectorate | The employer must register the individual employment contracts with the electronic register of employees (known as REGES) before or at the latest one working day before the date when the employee commences work. |
| Issues to be specified in the contract | An individual employment contract must stipulate the following details:
if applicable, the right of the employee to a private medical insurance, contributions to a voluntary or occupational pension, as well as any monetary benefits. |
| Fixed-term employment requires justification | Generally, an individual employment contract is presumed to operate for an indefinite period. Consequently, fixed-term employment is lawful only if it is justified by a reason expressly provided for by law. Examples of this include when employment is related to a project, seasonal business, the replacement of temporarily absent workers, or a temporary rise in the volume of business. A fixed-term employment contract must be concluded in writing. |
| Probationary period | When entering into an employment contract, employees may be subject to a probation period of up to 90 days (or 120 days for management positions). Where there is a fixed-term employment contract, the duration of the termination notice is between five and 45 working days, but varies depending on the length of the agreed contractual period, as expressly set out in the Labour Code (the “Labour Code”). |
1.2. Choice of law | |
| Choice of law | Romanian law governs parties to an employment contract in the following situations: i) when a Romanian employee is performing work within Romania; ii) when a Romanian employee is performing work abroad, for a Romanian employer, unless the legislation of the country where the employment contract is performed is more favourable; iii) when a foreign citizen is performing work in Romania, for a Romanian employer; iv) when the employee has acquired the refugee status and is employed on the Romanian territory, under the terms of the Romanian law v) when an employed person performs work for a company with its registered office in Romania. In these situations, parties cannot elect an alternative jurisdiction or law to govern the employment. |
1.3. Jurisdiction clause | |
| Jurisdiction clause | The parties to an employment contract subject to the Romanian law can only rely on the jurisdiction of Romanian courts, practicing the procedural laws of Romania to resolve disputes. These courts may include country tribunals as first instance courts or courts of appeal for final appeals. |
1.4. Contracts for services | |
| Alternatives for employment contracts | A contract for the provision of services may offer an alternative to an individual employment contract. In this case, the service provider must be authorised to independently act or perform the services provided. It must be noted that such an agreement cannot be entered into for the purposes of avoiding entering into an individual employment contract. Furthermore, regardless of whether or not a contractor is employed under a contract for services, if the contractor is integrated into and subject to the contracting organisation’s control then, the Labour Authority and/or relevant fiscal authorities will likely consider that he or she is an employee and requalify the contractual relationship into an employment one. In addition, directors/managers of a limited liability company may be ‘hired’ under a ‘management contract’. In case of joint stock companies, entering a ‘management contract’ instead of an employment contract for management/directorship positions is mandatory. |
1.5. Employment of foreigners | |
| Employment provisions for EU citizens | Romanian legislation regulates EU citizens entering and residing in Romania (Government’s Emergency Ordinance no. 102/2005). EU citizens and their families have the right to move freely within EU Member States and can therefore reside in Romania. EU citizens also have unrestricted access to the labour market in Romania and do not require work permits. An EU citizen staying for more than 3 months in Romania will be required to ask Immigration Romania to issue a residency card. |
| Immigration law and labour market rules | When hiring non-EU citizens, in addition to the general conditions required under the Labour Code, additional special conditions required by the Government’s Emergency Ordinance on the legal status of foreigners (OUG 194/2002) must be fulfilled. As a result, non-EU foreign persons must obtain an appropriate visa (business visa or employment visa) from the National Authority for Foreigners and a work permit from the National Office for the Movement of Employees. There may also be additional conditions or exemptions contained in bilateral agreements between Romania and other states. |
| Visas and other requirements | When hiring foreign citizens, business visas are usually issued to foreigners who are members of management or supervisory boards of Romanian companies. These non-EU foreigners must apply for either a short-term or long-term business work permit. |
1.6. Special rules for executives | |
| Alternative contracts for directors | Directors of Romanian companies may work under either an individual employment contract or a management contract, depending on the legal regime of the company (limited liability or joint-stock companies). In the latter case of a management contract, general commercial and civil law determines the director’s contractual relationship. |
2. Remuneration
2.1. Minimum wage | |
| Statutory minimum wage | The parties are free to agree on the amount of gross wages and bonuses that employees will receive, as well as further privileges and incentives. However, the parties must comply with the legal minimum wage per country. The Romanian government determines this minimum wage, and as of 1 January 2025 , the minimum gross wage amounts to RON 4,050 (approx. EUR 800) per month. |
| Collective agreements | If the employer is covered by a collective bargaining agreement, then the minimum levels of pay set out in such an agreement must also be adhered to. |
2.2. Pay increases | |
| Legal basis | Pay increases are usually agreed between employee and employer on an individual basis, or as a result of collective bargaining. In some circumstances, staff rules may also set out pay increases. |
2.3. Reduction of wages | |
| Only with the employee’s consent | An employer must obtain the consent of the employee if they wish to pay the employee a lower wage, or wish to amend the employment contract otherwise. |
| Termination of employment and offer of a new employment contract | If the employee withholds such consent, the only way the employer could amend the employment contract would be to unilaterally terminate the employee’s existing employment contract and concurrently offer the employee another employment contract containing the amended terms and conditions. Unilateral termination of an employment contract by an employer is however, limited to specific circumstances and requires strict compliance with restrictive conditions provided for by the Labour Code. Additionally, an employer must not propose any wage terms and conditions that bring the employee’s wage below the minimum wage (as defined by the relevant government decision, the collective bargaining agreement or the staff rules). |
3. Working time
3.1. Standard working hours and breaks | |
| Daily and weekly standard working hours | A regular working week for full time employees aged over 18, consists of 40 working hours or eight hours per day. Depending on the employer’s activity, the working program may be structured differently as long as it complies with the Labour code’s terms. |
| Paid breaks | A full- time employee is entitled to a meal break each day, however, that break is not included in the working hours. The applicable collective bargaining agreement or employer’s own regulations will determine the duration of this break. |
3.2. Minimum rest periods | |
| Daily minimum rest period | An employee is entitled to a daily rest of at least 12 consecutive hours between two successive working days. In the case of shift-work, the break must not be less than eight hours between shifts. |
| Weekly minimum rest period | An employee is entitled to at least 48 consecutive hours of rest per week. These are generally Saturdays and Sundays; if there is a specific need for the employee to work during these rest days, then the employee must be given time off during the other 48 consecutive hours within that week and additional remuneration. This time off and remuneration should be provided for in the applicable collective bargaining agreement or in the employer’s own regulations. |
3.3. Maximum working hours | |
| 48 hours per week | Working hours must not exceed 48 hours a week, including a maximum of eight hours overtime (please note that employees under 18 years of age cannot do overtime and can only work a maximum of 30 hours per week). By exception, the daily and weekly duration of work may exceed eight hours and 48 hours, provided that (i) the total hours per day do not exceed 12 hours and (ii) the average hours worked during a four-month period does not exceed 48 hours a week. Please note that for some activities and jobs such average period is calculated over six months. |
3.4. Working overtime | |
| General principle | Employees must consent to work overtime, however, employers may impose overtime in one of the following cases:
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| Overtime work interdiction | Employees under 18 years of age are barred from working overtime. |
| Limits to overtime work | In any event, a working week (including overtime) must not exceed 48 hours unless there are exceptional circumstances (see 3.3. and 3.4. above). |
| Compensation of overtime work | As a rule, when an employee works overtime they must be compensated by being given paid leave during usual work time, for the hours worked. This paid leave must be given within 90 days of when the overtime was performed. In circumstances where compensation in the form of paid leave is not possible, employees can be compensated by a payment of 75% of the base salary pro rata. |
3.5. Working on weekends and public holidays | |
| Requires special business needs | To be considered lawful, work on weekends (Saturday and Sunday), and public holidays must be justified by a special business need, such as activities that objectively require the employees’ presence on those days. Employees that work during the weekend are entitled to 48 consecutive hours of rest within the same week and an increase in pay as set out in the individual employment contract or by the applicable collective bargaining agreement. Work on public holidays must be compensated by corresponding paid hours leave, within 30 days of the work. The employees benefit from a 100% increase in pay pro rata for the hours worked on legal holidays. |
3.6. Premiums for night work and heavy-duty work | |
| In addition to overtime and rest-days, or public holiday compensation, an employee is entitled to an increased payment for night work (work between 10.00 pm and 6.00 am). If the employees performs: i) night work at least three hours of his/her daily working time; or ii) night work amounting to at least 30% of his/her monthly working time, they may be entitled to a reduction of the work schedule with 1 hour than the normal length of the working day. Alternatively, an employee may receive an additional 25% of their base salary for at least three hours of work performed overnight. Regarding the heavy-duty work, in the private sector there are no mandatory provisions in respect of premiums/ extra payment. |
4. Paid annual leave (holiday)
| Minimum holiday entitlement | Each calendar year, an employee is entitled to receive at least 20 working days of paid annual leave. Public holidays are not counted as part of the annual leave. |
| Enhanced entitlement to paid leave | Employees who: undertake activities that are harmful to their health during their employment, are disabled, or below 18 years old, are entitled to at least three extra days of paid annual leave. Additional annual leave entitlements may be provided for in any other applicable collective bargaining agreements, internal regulations and policies or employment contracts. |
| Accrual of holiday entitlement | Employees accrue their entitlement to paid annual leave proportionally to the time worked; it must be used within 18 months of the year following its accrual. |
| Consuming the holiday | Employees must take annual paid leave in accordance with an individual or collective schedule of holidays agreed with the employer. The schedule must be planned to the end of each calendar year. The employer must schedule at least 10 consecutive days of paid leave in any calendar year. Employees may, for objective reasons, request to cancel or interrupt annual leave. The Labour Code does not define what objective reasons are but they may be interpreted to include the death or illness of a family member. The employer may also request such interruption in force majeure cases, or if an emergency, requiring the presence of that particular employee arises. In these cases, the employer must bear all expenses related to the interruption. |
| Compensation | The payment of an employee’s annual leave must be made at least five days prior to the commencement of the annual leave, and must be at least the employee’s usual base salary plus the average amount of other salary incomes; including bonuses, premiums and indemnities. This is calculated by taking the employee’s daily average income from the preceding three-month period and multiplying that daily average with the number of days off. |
| Payment in lieu of holiday | Annual leave cannot be exchanged, transferred, limited or waived in exchange for a compensation payment - even by agreement. The only instance where an employee may be paid a cash compensation for their annual leave is when their employment contract is terminated, in this case the leave can be paid in lieu. |
| Transfer of unused holiday to the next year | An employee should try to use their entire annual leave during the year it accrues. However, if an employee does not do this then any untaken leave can be taken within 18 months of the year following its accrual. |
5. Sick pay
| Notification and medical certificate | In cases where the employee is temporarily unable to work due to illness or injury, the employee may receive paid sick leave but must obtain a medical certificate granting medical leave for prescribed number of days. |
| Sick pay | The duration of the temporary incapacity for work, shall not exceed 183 days within one year, counted from the first day of illness. After 90 days, any additional medical leave up to the 183 day period must be extended based on the opinion of an expert medical practitioner. In the event this period of time is exceeded the employer must keep the employee’s job open for them but are not expected to continue to pay the employee sick leave. |
| Medical certificate at the outset of employment | Employees must have a medical certificate confirming that they are fit to perform their job – this must be ensured by the employer through the occupational health physician; if this certificate is not produced then the employment contract becomes null and void. The Labour Code also provides for several situations during the course of employment (generally those that imply changes in the performance of the contract) where a medical certificate must be produced. |
6. Termination of employment
| General background | Generally, an individual employment contract can be terminated in the following situations:
(i) the death of the employee or of the employer (if the employer is a natural person), or in the event of the dissolution of the employer, from the date when the employer ceased to exist in accordance with the law; (ii) a court decision declaring the death or interdiction of the employee or employer (if the employer is a natural person); (iii); when the employee cumulatively reaches the age of retirement and the minimum period of contribution for retirement; on the date the decision setting forth the full or partial early retirement or invalidity retirement (grade III invalidity) has been notified according to the law, or at the age of 65 years old for the female employee who decided to extend her work beyond the age limit for retirement, or at the date of communicating the medical decision on the work capacity in the case of grade I or II invalidity. (iv) when the parties acknowledge, or a court rules that an individual employment contract is null; (v) for an employee replacing an illegally dismissed employee, upon the reinstatement of such illegally dismissed employee, at the date the reinstatement court ruling remained final; (vi) upon a final court decision that determines that a person is convicted for the execution of a custodial sentence, as of the date of the final decision of the court; (vii) the date the competent authorities withdrew the consent, authorisations or permits required for the exercise of the profession; (viii) when an individual has been prohibited from exercising their role within a profession as a safety measure or complementary punishment, as of the date the court ruling to this effect remained final; (ix) at the expiration of the individual employment contract concluded for a determined period; (x) upon the withdrawal of the parents’ or legal representatives’ consent, for employees between 15 and 16 years of age.
(i) for reasons connected to the employee’s person (that implies e.g. the employee’s disciplinary misconduct or professional inadequacy or medical incapacity); or (ii) for reasons that are not connected to the employee’s person but occur for objective reasons that cannot be attributed to the employee, such as the removal of the position/job due to economic difficulties, technological transformations or activity reorganisation. A dismissal in this instance may be individual or collective. |
6.1. Formal requirements to be observed by the employer | |
| Specific procedure regarding termination required | The Labour Code requires an employer to follow a strict procedure if they intend to terminate an individual employment contract. For instance, the employer must formally issue a termination decision including reasons for the termination of the contract. Where the dismissal is connected to the employee’s person, usually a prior disciplinary investigation or professional review should have taken place, following steps stipulated by the Labour Code. Non-compliance with these requirements could result in the termination being invalid. |
| Employees’ representatives | The Labour Code provides for certain cases when employees’ representative(s) may be involved such as termination or disciplinary reviews. |
6.2. Notice periods | |
| Varying notice periods | Resignation: Romanian labour legislation provides for a maximum duration for notice periods depending on the employee’s role. Shorter notice periods can also be agreed by the parties in the individual employment contract or, provided in the applicable collective labour agreements, subject to always observing the maximum duration. The notice period cannot exceed 20 working days for employees in non-management roles or 45 working days for managing roles. Redundancies: Romanian labour legislation provides for a minimum duration of 20 working days for the notice period, irrespective of the employee’s role. Longer notice periods can also be agreed by the parties in the individual employment contract or, provided in the applicable collective labour agreements During this notice period, the employee is entitled to receive his/her salary rights, as well as all other statutory rights. At the same time, the employee is expected to carry out work, as usual. |
6.3. Termination without notice (summary dismissal) | |
| Severe breach of the employee’s duties | Termination without notice (summary dismissal) is not regulated as such nor recognised under local law. Nevertheless, there are cases of unilateral termination where there is no need to provide a notice period, as follows: (i) unilateral termination may occur in case of severe or repeated disciplinary misconduct(s), pursuant to an internal disciplinary investigation and subject to specific legal rules in this respect. (ii) unilateral termination is also allowed if the employee is held under temporary detention (preventive arrest) for more than 30 days. (iii) Separately, unilateral termination may take place, based on a mere notification, when the employee is still under a probation period, on the condition that such termination is related to the professional misfit of the employee. |
| Forfeiture after 30 days | If there is a valid reason for a disciplinary dismissal, the employer must give the employee notice of the dismissal within 30 days of the event or discovery of the circumstances giving rise to the dismissal. If the employer fails to do this, they forfeit their right to dismiss the employee. |
6.4. Requirement of a valid reason to terminate the employment | |
| General rule and exceptions | Unlike the employee, the employer must have a lawful reason to terminate an individual employment contract, unless the employee is under probation. |
| Reasons of dismissal | The definitions of valid reasons for dismissing an employee are set out in the Labour Code. (i) a disciplinary sanction, where an employee has engaged in severe or repeated misconduct, and/or breached provisions of the individual employment contract, collective labour contract, internal regulation or other labour discipline rules; (ii) where the employee is under temporary detention (preventive arrest) for a period exceeding 30 days, as provided by the Code of Criminal Procedure; (iii) where the competent medical investigation body has established the employee’s physical or psychological inadequacy for performing their job tasks; (iv) where the employee fails to meet the professional requirements for his/her position (professional inadequacy); The second category of reasons is not related to the employee personally. These occur for objective reasons that cannot be attributed to the employee in case of workforce restructuring consisting of removal of the position/job due to e.g. economic difficulties, technological transformations or activity reorganisation for efficiency purposes. In such cases, redundancy-based dismissal may be either individual or collective. |
| Suitable alternative employment | The Labour Code imposes on employers to offer the employee alternative employment prior to dismissing the employee in cases expressly provided in the law. Such cases would include those where a competent medical investigation body has established that an employee is physically or psychologically inadequate in performing job tasks attributed to his/her role; where the employee does not meet the professional requirements for his/her position; or where an unlawfully dismissed employee, whose position has been filled by a new employee, is reinstated. |
| Criteria for the selection process | Selection criteria apply generally as part of an individual or collective redundancy. The Labour Code does require the employer to use selection criteria in case of collective redundancies. Such criteria may consist of: performance, personal circumstances of the employee etc.. It is not mandatory to use selection criteria in case of indivdiual redundancies; however, depending on the reasons behind individual redundancies, it might be useful / required to have them in place. |
| Re-engagement | Re-engagement is possible, except for employees whose employment was terminated based upon a disciplinary review where such re-engagement cannot be made within 12 months from such termination, during when such sanction is still deemed as valid. Further, re-engagement is not possible in the next 45 days from when a position was made redundant. |
6.5. Collective Redundancies | |
| Definition | Redundancies qualify as a “collective redundancies” if the number of employees being terminated during a 30-day period is:
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| Redundancy social plan, information, consultation and assistance | In these cases, the employer must consult, the Labour Union and inform the relevant territorial labour inspectorate of its intention/decision to carry out collective redundancies. If there is no Labour Union, the employer must consult with the employees’ representative(s), who need to be lawfully elected before starting the collective redundancy process. |
| Alternative measures proposed by the labour union | If the employer intends to make collective redundancies, it has to initiate and consult with the relevant labour union or the employees’ representatives, in due time, for the purpose of reaching an agreement on measures that can be taken to avoid collective redundancies or mitigate effects of the collective redundancies. In return, the Labour Union or the employees’ representatives may, within 10 days of receiving notification of collective redundancies, provide a proposal that aims to avoid or limit the number of redundancies. The employer must provide reasoned answers to these proposals in writing within 5 days of receiving them. |
| Sanctions for failure to follow the procedure | If the employer fails to follow this collective redundancy procedure, any redundancy may be unlawful, thus null and void. In addition, employees may successfully claim (i) reinstatement, (ii) payment of all salary from the redundancy date and up to the reinstatement date, as well as (iii) any other material or moral damages. |
6.6. Severance payments | |
| Compensation in case of dismissal for reasons non-attributable to the employee | There is no statutory provision imposing for a minimum or maximum amount consisting of severance payments in cases of redundancies. However, severance payments/pagckages may be provided by employer’s internal regulations, collective bargaining agreements applicable at the level of the employer or by the individual employment agreement entered into with the employee. |
6.7. Involvement of the works council (labour union) | |
| Optional involvement of the labour union | In accordance with the relevant provisions of the Romanian Labour Code, the employer must consult the Labour Union or employees’ representative(s), in relation to those decisions which may substantially affect the rights and interests of employees. However, as the Labour Code does not specifically state which decisions require consultation, when employment termination is carried out individually (rather than collectively), Labour Union involvement is optional. Nevertheless, the employee concerned may request the Uabour Union’s involvement in the redundancy / dismissal procedures. |
| Collective redundancies | Collective redundancies are defined in section 6.5. above. |
6.8. Employees with special protection against termination of employment | |
| Protected groups with a high standard of protection against dismissal | In Romania, employers may not terminate the employment contract of the following persons:
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| Dismissal requires the prior consent of the labour union | No consent of the Labour Union is required to for dismissal. |
6.9. Changing terms and conditions of the employment contract | |
| Definition | In accordance with the provisions of the Labour Code, the following changes will be considered an amendment to the employment contract:
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| The principle of mutually agreed amendment | The terms and conditions of an individual employment contract may be amended if both parties agree and express these changes in an additional document annexed to the individual employment contract. |
| Exceptions | Under the Labour Code, the employer may unilaterally modify the terms of employment by changing the place of work of an employee on a temporary basis , when: (i) delegating an employee to another location, of the same employer, for maximum 60 days in 12 months, this may be extended every 60 days, with the employee’s consent; or (ii) detaching the employee to another location (secondment) for a maximum of one year for objective reasons, this may be extended every six months with the parties’ consent. |
7. Business transfer
| Automatic transfer of contracts of employment | If a business (or a part thereof) is transferred to another business, the individual employment contracts are also automatically transferred to the new business. Therefore, all the rights and obligations of employers and employees that existed up to the day of transfer continue to remain in effect and the new employer shall assume all the existing rights and obligations (unchanged in form or extent). |
| No reason for termination | The transfer of a business (or part thereof) alone does not constitute a reason for either the transferor or transferee to dismiss employees either individually or collectively. |
| Duty to inform employees | Both the transferor and the transferee must consult the labour union or employees’ representatives about the legal, economic and social implications the transfer may have on employees. This must occur prior to the transfer transpiring. |
8. Industrial relations
8.1. Labour unions and the management of the business | |
| Freedom to establish and join a labour union | In Romania, employees have a fundamental, constitutional right, to freely establish, and to be a member of a labour union. Moreover, a labour union has the right to represent its members in labour disputes against an employer, before courts or governmental authorities, provided that it is organised as an association and registered in accordance with the Social Dialogue Law and the Labour Code. |
| The powers of labour unions | Labour unions and their representatives have various statutory rights which must be exercised in negotiations, mediations, arbitrations or conciliation procedures, petitions, protests, meetings, demonstrations and strikes.
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| Collective agreement | Collective agreements will be concluded, upon a negotiation between the employer and either the employees’ representatives or the union representing such employees. |
8.2. Employee representatives | |
| Employees’ representatives | In larger undertakings (with 10 or more employees, and where no labour union exists), employees may elect their representatives for the purposes of representing their interests within the company. The number of representatives must be agreed with the employer, otherwise the number provided in the Social Dialogue Law must be applied (which dependents on the total number of employees). The right to elect and to be elected as an employee representative applies to all employees, who have full legal capacity to work. |
| Rights of the employees’ representatives | Employee representatives possess the right to:
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| Employees’ representatives in the supervisory board | As mentioned before (see 8.1. and 8.2. above), employee representatives or labour union representatives have statutory rights to participate in meetings of the board of directors to discuss professional, economic, social, cultural or sporting matters affecting employees but do not hold the right to vote in such boards. |
| Rights of consultation | Employee representatives have the right to be consulted prior to any decision of the company that is likely to substantially affect the working conditions of the employees. Beside this, the Romanian legislation provides specific cases when prior consultation is required such as the enactment by employer of its internal regulation , on any recent or probable evolution of employer activity, and workforce, prior to any TUPE transfer of employees, prior to collective dismissals etc. |
| Sanctions | Depending on type of information in relation to which the employees’ representatives should be consulted, the amount of fines vary (for instance, if the company does not consult the employees representatives on any recent or probable evolution of employer activity andthe financial situation, this may trigger a fine up to of RON 20,000). Also, the sanction may consist of annulment of the relevant procedure, like in the case of the collective dismissal procedure. |
8.3. Release from work to conduct labour union employees’ representative activities | |
| Suspension of the employment contract for leaders of labour union | For the entire process during which an individual is elected to a salaried management position within a labour union, their individual employment contract is suspended. However, the employer can only employ a temporary replacement for a fixed period and must preserve the employee’s job until the employee’s union duties are completed. |
| 20 hours per month for employees’ representatives | The number of hours within the normal work schedule for the employees' representatives intended to fulfill the mandate they have received is established by the applicable collective labour agreement or, in its absence, by direct negotiation with the employer. |
8.4. Financial and/or technical assistance of trade union activities? | |
| The employer can offer and pay for the necessary office space and resources required by the trade union officers to conduct those activities allowed under the law. | |
8.5. Collective bargaining agreements | |
| Collective agreements | Collective bargaining agreements are entered into between the employer or the employers’ organisation, and the employees (via their representatives or persons representing the trade union ). These agreements establish labour conditions, salaries, and other rights and obligations arising from employment relationships. Collective bargaining agreements are concluded at an employer level or groups of employers. |
| The minimal character of the rights conferred by the applicable collective bargaining agreement | Labour laws mandate that a collective bargaining agreement cannot interfere with, or reduce the employees’ rights from those of the collective bargaining agreement at the high level (if existing). |
9. Employment Disputes
9.1 Employment Disputes in general | |
| Material competence of the district tribunals | Employment disputes are primarily heard by district tribunals and in accordance with judicial legislation, employment disputes are ruled by specialised employment sections of courts. |
| No possibility for arbitration | In accordance with the relevant Romanian legislation, an employment dispute can only be resolved by competent courts, in accordance with labour conflict laws and the Code of Civil Procedure. |
| Conciliation committee | Before going to the courts, the parties have the option to engage in a conciliation procedure, which is explicitly regulated by the Labor Code and facilitated by a third-party (i.e., a labor law consultant). This option is available only if both parties have expressly agreed to it in writing. |
9.2 Disputes related to collective agreements | |
Disputes relating to the commencement, performance or conclusion of collective bargaining that may result in strikes, must be resolved before a conciliation representative of the Ministry of Labour and Social Solidarity. When conducting conciliation proceedings, both parties may designate representatives of two to five persons each to appear and participate in conciliation proceedings. Where a labour dispute is not settled following this conciliation, the parties have the right to mutually agree to proceed to a mediation procedure organised by the Office of Mediation and Arbitration of Collective Labour Disputes. Throughout the duration of a collective labour dispute, the parties may also, by consensus, defer to the arbitration organised by the Office of Mediation and Arbitration of Collective Labour Disputes. The arbitrator’s decisions are binding on the parties and will complement the collective labour agreements. Mediation or arbitration becomes mandatory if parties mutually agree to this before or during the strike. |
10. State Benefits
| General background | The Romanian system of social security covers the following circumstances: maternity, retirement, sickness, invalidity, death and unemployment. | ||||||
10.1. Contributions for social insurance and taxes | |||||||
| Social Security |
* Labour authorities have discretion to determine whether a work place qualifies as having “unusual” or “special” conditions. Commonly, work conditions are labelled as unusual when the employee is exposed to potentially toxic vapours, loud noise, electromagnetic waves, etc. The employer should withhold the employee’s social security contributions from their salary and pay these contributions monthly to the Romanian State budget. | ||||||
| Taxes | After social security contributions are deducted, 10% of the employee’s income should be withheld by the employer. Note that certain other deductions could lower the taxable base for salary tax. | ||||||
10.2 Health Insurance | |||||||
| Basic and supplementary health coverage | In Romania, the state system consists of a (compulsory) basic health coverage and an (optional) supplementary insurance coverage. The basic coverage provides for medical treatment, medicines, sanitary materials and medical devices. | ||||||
| Private insurance companies | Apart from the state system, private insurance companies cover a variety of health services under individual insurance contracts. | ||||||
10.3. State pensions | |||||||
| The pension public system | The Romanian pension system (i.e. 1st pillar pension fund) is organised and guaranteed by the state. The system ensures that all participants have an equal right to access pensions. | ||||||
| Regular pension | In Romania, when men reach 65 and women reach 63 they are entitled to the regular pension, provided that they have accumulated at least 15 years of service and are not currently employed. | ||||||
| Calculation of the pension | The key factors affecting the calculation of a person’s pension entitlements are the person’s age, type of work, the duration of their pension scheme status, and their working life salary. | ||||||
10.4. Private pensions | |||||||
| The private pension system | The private pension system in Romania is split between three types of pension funds referred to as “pillars”. These are: 2nd pillar pension funds (or “mandatory pensions”),3rd pillar pension funds (or “voluntary pensions”), amd 4th pillar pension fund (or “occupational pensions”). The first pillar is the state managed pension system. | ||||||
| 2nd pillar | 2nd pillar: The mandatory private pension system is a defined contribution system, which is only open to employees who pay social security contributions. At its inception, the participation was mandatory for any employee under the age of 35, and voluntary for employees between 35 and 45 years of age. The National House of Pensions, centralises, collects and pay pension fund contributions. Authorised pension management companies manage mandatory pension funds. | ||||||
| 3rd pillar | 3rd pillar: The voluntary, private pension system is also a defined contribution system, however is open to anybody earning an income. The contribution to the pension fund may be made by employers and directly by the participants. Authorized pension management companies, life insurance companies or assets management companies manage voluntary pension funds. | ||||||
| 4th pillar | 4th pillar: The occupational pension funds are set up at the initiative of the employer. For this type of pension, the employer pays contributions for all its employees and represents the interests of employees in their relationship with the occupational pension fund administrator. Employees may contribute to the same occupational pension fund with amounts in addition to those invested by the employer, in order to increase the value of their personal assets and the amount of their future pension. These funds are managed by authorised pension management companies. | ||||||
10.5. Unemployment benefits | |||||||
| The state supports unemployed persons through various employment incentive programs and monetary benefits. | |||||||
| Unemployment benefit | To be entitled to financial support, unemployed persons must have contributed to the Romanian State budget for unemployment benefits for at least 12 of the previous 24 months at the time of request for financial support. The unemployment benefit is 75% of the social reference indicator (currently RON 500) plus 3 to 10% of employee average gross basic salary for last 12 months of employment, per month, and the duration of the unemployment benefit depends on the length of time that the unemployed person previously contributed to the Romanian State budget for unemployment benefits and does not exceed 12 months. | ||||||
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