Ţuca Zbârcea & Asociaţii

Forums For Adjudicating Employment Disputes

Employment conflicts are mainly settled by the district court of law having jurisdiction over the territorial area where the employee has his/her domicile or workplace. By means of exceptions, specific employment disputes may be settled by other courts of law, upon special legal provisions issued in this respect.


The Main Sources Of Employment Law

Romania is a civil law jurisdiction and the core employment regulation is the Labour Code. Beside the Labour Code, specific tailored legal enactments regulate other employment related aspects, such as employment safety and health, insurances for work accidents and professional diseases, employment conflicts and disputes. Finally, collective bargaining agreements provide binding rules and obligations to be complied with by the employers. In addition, considering Romania’s accession to the European Union, which took place on 1st of January 2007, European legislation and ECJ court decisions are also relevant. Under Romanian law, a particular source of the labour law is represented by the collective bargaining agreements. Such agreements may be concluded at different levels: company, group of companies and industry sectors. Collective bargaining agreements concluded at lower levels cannot provide for rights inferior to those set forth by collective bargaining agreements concluded at higher levels. The Labour Code set up a legal obligation for companies with more than 20 employees to conduct collective negotiations in view of concluding a collective bargaining agreement. The obligation is to carry out negotiations only, and not to actually conclude the agreement.

The provisions of collective bargaining agreements are compulsory for the parties and apply to all employees of a company or group of companies, irrespective of whether they are members of a trade union or not. A collective bargaining agreement concluded at industry sector level shall be applicable to all employers who are members of the employers’ organisation participating in the collective negotiation. The application of such collective agreement can be extended to the entire industry sector, if certain conditions are met. Employers shall be considered part of an industry sector depending on their main object of activity stated in their registration documents. Collective bargaining agreements can be concluded for at least 12 months and maximum 24 months.


National Law And Employees Working For Foreign Companies

If employees working for foreign companies are Romanian citizens working on Romanian territory, the law applicable to their employment relationship shall be Romanian law. In cases where the employees are non-nationals working for foreign companies on Romanian territory, the law applicable is that of the state where they have concluded the employment agreement (or another law chosen by the parties). Romanian law is not applicable in case where an employment relationship is established between a non-national and a foreign employer.


National Law And Employees Of National Companies Working In Another Jurisdiction

Employees working for national companies on the Romanian territory, irrespective of their nationality, may be seconded to another employer having its place of business in another jurisdiction, for a determined period. In such a case, the applicable law to their contractual relationship is Romanian law. Another possibility for the employees working for national companies to work abroad is by means of delegation. This may be disposed by the employer for a maximum period of 60 days within 12 months and may be prolonged with successive periods of up to 60 days based on the employee’s consent. As opposed to secondment, delegation represents the temporary relocation of the employee, in view of performing specific tasks for his employer. The Romanian law remain the applicable law between the employee and employer during the delegation period.


Data privacy

The employer is entitled to process personal data of the employee for legal, personnel, administrative and management purposes, in the conditions and with the observance of the legislation concerning the processing of personal data. However, employers should rely on employee’s consent only where no other legal basis for processing applies or when processing is in the interest of the employee. Employers also have a legitimate interest to ensure that usage of internet remains limited. In order to balance the monitoring of usage while respecting their employees’ privacy, employers should provide strict, clear and objective rules on the use of internet and any program that require the use of internet. Employers should also avoid the collection of data when possible.

Legal Requirements As To The Form Of Agreement

Individual employment agreements must be concluded in writing, based on the parties’ consent, as failure to do so is sanctioned with the agreement’s nullity. Prior to concluding the agreement, the employer is required to inform each employee of the general clauses to be included in the employment agreement. Such obligation is considered to be fulfilled by the employer upon the signing of the individual employment agreement. Additionally, the employer is under an obligation to register the individual employment agreement on the employeess record one day before the employee commences work. Failure to observe the written form requirement can result, aside from the nullity of the employment agreement, in the administrative liability of both the employer and the employee.


Mandatory Requirements
  • Trial Period
  • There is no legal obligation to provide a trial period within the individual employment agreement as long as the parties establish an employment relationship without a trial period. Where the employer does decide to set up a trial period for the new employee, it must be reflected within the employment agreement. The trial period cannot exceed 90 days for employees holding a non-management position and 120 days for employees holding a management position. Other trial periods are provided by the Labour Code for specific situations.

  • Hours Of Work
  • On average, an employee will work 8 hours a day and 40 hours a week. Employees’ consent is required for overtime work. The maximum working week is 48 hours, including overtime. Additional overtime is accepted in exceptional circumstances, provided that the average work time computed on a four- month basis does not exceed 48 hours a week.

  • Special Rules For Part-time Work
  • In addition to the general requirements, part-time employment agreements must state the following: (i) the working time and the working schedule which should be less than 40 hours/week, (ii) cases when the working schedule may be amended, (iii) overtime work prohibition, except for force majeure or other urgent works intended to prevent the accidents or to remove their consequences, A part-time employment contract shall be deemed a full-time employment contract in case the elements provided above are not stated in the contract.

    Part-time employees shall benefit from all rights of full-time employees, under the terms stipulated by law and the applicable collective labour agreement.

  • Earnings
  • The mandatory minimum monthly gross salary in Romania is regulated by Government Decisions. Thus, the wages stipulated under the individual employment agreement cannot fall below the minimum national gross salary.

  • Holidays/Rest Periods
  • The minimum paid leave provided under Romanian law is 20 working days. The Labour Code provides for a number of days off that must be observed by employers. These are: (i) January 1st and 2nd; (ii) January 24th; (iii) the Friday before Easter; (iv) first and second Easter days; (v) May 1st; (vi) first and second Pentecost days; (vii) August 15th; (viii) November 30; (ix) December 1st; (x) first and second Christmas days; (xi) 2 days for each of the 3 annual religious holidays, declared as such by the legal religions other than Christian-orthodox ones, for employees belonging to such religions.

  • Minimum/Maximum Age
  • The average age for employment is 16 years old. However, an individual employment agreement may be concluded at the age of 15, based on parents’ consent, taking into consideration the physical development of the teenager, his/her aptitudes and knowledge. Employment of persons under the age of 15 is prohibited. There is no maximum age limit.

  • Illness/Disability
  • The employee benefits from medical leave in case illness prevents the employee from performing his/her activity. The medical leave indemnity is paid by both employer and the state healthcare system depending on the number of days of medical leave. The first five days of medical indemnity are paid by the employer and the rest of the period shall be recovered from the state healthcare system. The indemnity is a percentage of the income of the employee, depending on the illness type, in principle.

    If the disability affects the employee’s work capacity permanently, the employee may benefit from a special type of pension, based on the medical decision attesting their condition.

  • Location Of Work/Mobility
  • The place of work must be clearly identified in the individual employment agreement. In cases where the workplace is not static, it has to be stated that the employee may be requested to work in various places. Also, the parties may provide a mobility clause within the employment agreement. If this is the case, the employee shall benefit from additional pay in cash or in kind.

    Employees who carry out their work by using information and communications technology can perform work from another place than the one made available by the employer, as provided in the employment agreement or in the addendum to the employment agreement (“telework”).

  • Pension Plans
  • There are no mandatory requirements relating to pension plans to be included in the employment agreement. However, the employer is under a legal obligation to pay all the social security contributions (including contributions to the pension fund) payable by both employee and employer based on their employment relationship.

  • Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)
  • There are no legal requirements to provide “family rights” within the individual employment agreement. Nevertheless, such rights are recognised under Romanian law (referring to maternity leave and allowance, childcare leave, leave to care for a sick child, additional protection in case of maternity) and their observance is compulsory.

  • Compulsory Terms
  • The Labour Code states that, prior to concluding the employment agreement, the employee needs to be informed on the essential clauses of the individual employment agreement.

    The compulsory terms to be included in the individual employment agreement are as follows: the identity of the parties, the place of work or in case where the work place is not static, the provision that the employee may work at various places, the position/occupation of the employee according to the specifications of the Classification of Occupations in Romania or other regulatory acts, as well as the job description, the evaluation criteria of the professional activities performed by the employee applicable within the employer, the specific risks of the job position, the effective date of the agreement, the length of the employment agreement, the length of the rest leave the employee is entitled to, the length and the specific conditions of the prior notice term (both for dismissal and for resignation), the wage, other elements of the wage, as well as the payment terms, the working time, expressed in hours/day and hours/week, provisions on the applicable collective bargaining agreement, the length of the trial period (if applicable).

  • Non-Compulsory Terms
  • The parties of an employment agreement may agree any other provisions in addition to the compulsory terms, provided that these terms are no less favourable than certain statutory rights. Such non-compulsory terms may refer to confidentiality, non-competition and intellectual property rights.


Types Of Agreement

The individual employment agreements regulated under Romanian law may be categorized by considering specific criteria. These criteria are (i) length of employment: undetermined and determined agreements, or work through a temporary employment agent; (ii) working time: full–time and part-time agreements. A distinctive agreement is that referring to home–based work (concluded with employees who carry out, at home, the specific duties of their job position) and to teleworking (concluded with employees who carry out their activity in another place than the one organized by the employer, at least one day per month, by using information technology and communication).


Secrecy/Confidentiality

General provisions are stipulated under the Labour Code as regards to the confidentiality obligation of the employee during the course of employment. In addition, more detailed provisions may be included in the employment agreement. Specific amounts of damages may be stipulated to be paid by the employees in case of breach of the confidentiality clause.


Ownership of Inventions/Other Intellectual Property (IP) Rights

In the absence of any contractual terms agreed by the parties, there are statutory provisions which will apply to determine the ownership of IP rights. There are different provisions in respect of copy-right, respectively patent rights. In case of copy-right, the holder of the intellectual property right shall be, as a matter of principle, the person who created the work. As regards the patent rights, the holder of the intellectual property rights created by an employee during working time shall be either the employer, in case he granted a specific research task to the employee or the employee, in case he creates such rights in the normal course of his duties without a specific mandate from the employer. Although not mandatory, provisions on IP rights are commonly included within individual employment agreements.


Pre-Employment Considerations

The employer cannot conduct background checks, other than requiring information from the candidate and recommendations from previous employers. For certain positions, specific authorisations, from a national authority, a degree or a certificate may be required. Individuals that do not hold the required authorisation, degree or certificate cannot be employed.

A medical certificate upon hiring an applicant represents a mandatory prerequisite for concluding an individual employment agreement, in order to determine if the candidate is medically fit for the job position offered by the employer. The lack of such certificate shall trigger the nullity of the agreement.


Hiring Non-Nationals

For this specific issue, it is important to distinguish between EU/EEA/Swiss nationals and non–EU/EEA/Swiss nationals. EU/EEA/Swiss nationals have an automatic right (subject to certain exceptions) to enter and work on Romanian territory. For non-EU/EEA/Swiss nationals, working in Romania is permitted only for those who obtain a work permit.

The number of work permits issued every year is limited and is determined by a government decision.


Hiring Specified Categories Of Individuals

There are specific provisions of Romanian law that protect certain categories of employees (e.g. teenagers, pregnant women, disabled individuals).


Outsourcing And/Or Sub-Contracting/Temporary Agency Work

Under Romanian law there are no specific rules for outsourcing, meaning the mechanism under which the employer concludes a services agreement with a third party company for covering certain activities/functions which usually ar do not represent the business scope of the company (e.g. payroll, accounting, security).

Separately, the Labour Code regulates the temporary staffing agency concept, which is a legal entity, authorized by the Ministry of Labour and Social Protection, which concludes employment contracts with temporary employees, in order to assign them to user companies to perform certain activities/duties, for temporary periods of time (“missions”), under the user’s supervision and direction. For performing this kind of services, the employer must obtain a specific licence as provided under the provisions of the Labour Code.

Further, it may be possible to apply, subject to a case by case analysis, the rules on the “transfer of undertaking”. Further details about the transfer of an undertaking are set out below.

Changes To The Contract

As a general rule, the employment agreement may not be unilaterally amended by the employer. Any change in respect of the terms and conditions provided within the agreement shall be based on the parties’ consent and it shall be reflected in an addendum to the employment agreement

By means of exception, some specific provisions of the agreement may be unilaterally amended by the employer, in accordance with the provisions of the Labour Code. One specific exception regards the workplace. The employer may change the workplace of the employee by delegating or assigning the employee to another work place or employer, for a determined period of time. During the delegation or assignment period, the employer shall preserve the employee’s position and all other rights stipulated in the individual employment agreement

The employer may also temporarily change the place and nature of work, without the employee’s consent. This may be done in cases of force majeure, as a disciplinary sanction, or as a measure aimed at protecting the employee. Such changes must be made in accordance with the terms stipulated by the Labour Code.


Change In Ownership Of The Business

The change of the employer within the employment relationship may trigger, in principle, the application of the “transfer of undertaking” rules. The main enactments regulating the “transfer of undertaking, business or part of an undertaking or business” are the Labour Code and the Law No. 67/2006 on safeguarding employees’ rights in cases of transfer of undertakings, businesses or parts of undertakings or businesses. The latter has transposed the Council Directive 2001/23/EC of 12 March 2001 on the approximation of laws of the Member States relating to the safeguarding of employees’ rights in the event of transfer of undertakings, businesses or parts of undertakings or businesses. The above legislation provides protection for employees. In this respect, the transferee employer is liable to observe the rights which the transferred employee had with the transferor employer under their individual employment agreement and the applicable collective bargaining agreement. Both the transferor and the transferee shall be under an obligation to consult their employees about the transfer and to inform them on specific issues. For the purpose of the transfer, no consent from the employees is required. However, the transfer of undertakings, businesses or parts of undertakings or businesses shall not be used as grounds for the transferor or the transferee to perform individual or collective dismissal of employees. If a transfer involves a substantial change in working conditions to the detriment of the employee, the transferee is liable for the termination of the individual employment agreement.


Social Security Contributions

Under Romanian law, the social security contributions (i.e. contributions to the social security system, the health system and the unemployment system) are mainly owed by the employee. However the calculation, withholding and payments of such contributions are made solely by the employer. The aforementioned contributions relate to the salary incomes granted by the employer to the employee, in exchange for his work. The level of the social security contributions is mainly regulated by the Law on State Social Security Budget issued annually


Accidents At Work

There are specific enactments relating to the health and safety of employees. For such purpose, the employer shall provide all employees with insurance for risks of employment accidents and professional diseases.


Discipline And Grievance

Breach of the law, employment agreement, internal rules or other policies enforced at the level of the employer by the employee represents misconduct and entitles the employer to take disciplinary action, provided that the breach is not due to the employee’s professional unfitness. Before imposing a sanction (i.e. other than the written warning) on the employee, a preliminary investigation procedure has to be followed by the employer. During the preliminary investigation stage the employee will be presented the facts deemed as disciplinary misconduct and will be asked to present arguments in his favour. The employee may be assisted by a member of the trade union or by a labour legislation consultant during the investigation stage. The employer’s failure to observe the disciplinary procedure may lead to the annulment of the sanction applied to the employee. The sanction imposed may be challenged before the courts of law by the employee where the judge may consider the sanction imposed to be too severe or to be unjustified, declaring the disciplinary decision as null and void.


Harassment/Discrimination/Equal pay

General provisions on harassment/discrimination/equal pay are applicable in Romania, to all citizens. In addition, special provisions in respect of the employees are regulated under the Labour Code and other specific pieces of legislation. Thus, all direct or indirect discrimination towards an employee, discrimination by association or victimization based on criteria such as sex, sexual orientation, genetic characteristics, age, citizenship, race, skin colour, language, ethnic origin, religion, political options, social origin, disability, HIV infection, chronic non-communicable disease, family conditions or responsibilities, membership of a disadvantaged group, trade union membership or activity, shall be prohibited. Similar provisions exist in respect of harassment (i.e. including sexual harassment and moral harassment at the place of work). As regards equal pay, the Labour Code expressly provides for the equal treatment principle in the field of remuneration.


Compulsory Training Obligations

Employers with more than 20 employees are under a legal obligation to issue and apply, annually, professional training plans, after consulting the trade unions/ employees’ representatives in this respect. In addition, the employer shall ensure the participation of all employees in professional training programmes as follows: at least once in two years for employers having more than 21 employees; at least once in three years for employers having less than 21 employees.


Offsetting Earnings

As a general rule, employers may not withhold from the wages of their employees any amount of money, except for specific cases and under certain conditions provided under the law. However, the employer may withhold any amounts held as damages, provided that the employee’s debt is outstanding and has been ascertained as such by a final court decision .


Payments For Maternity And Disability Leave

Employees who have paid income tax within the 12 months prior to childbirth shall benefit from childcare leave until the child reaches the age of two years, upon request, or, where they have a disabled child, three years, and a monthly allowance. Such allowance ranges between RON 1,250 to 85% of the average net income of the last 12 months in the past 2 years prior to childbirth, but no more than RON 8,500. The above provisions are applicable either to the mother or father. Disability payment is to be paid to the employee during disability leave. Payment is due by the employer from the first until the fifth day of leave; starting with the sixth day of disability leave, the corresponding leave is paid from the budget of the Sole National Fund of Social Health Insurance. The allowance for temporary work incapacity is granted for no more than 183 days per year. A longer period of paid leave is available in case of certain diseases, such as heart diseases, tuberculosis and AIDS.


Compulsory Insurance

The employer is under a legal obligation to provide all employees with insurance for risks of employment accidents and professional diseases. Such insurance is part of the social security system, being guaranteed by the state, and it assures the social protection of employees against diminishing or losing their work capacity or against their death following work accidents or professional diseases.


Absence For Military Or Public Service Duties

Considering that the mandatory military service in Romania was suspended, there are no provisions within the Labour Code regarding the effects of the military or public service duties over the individual employment agreement.


Works Councils or Trade Unions

The right to establish trade union organisations and to become a member of such organisations is guaranteed under Romanian law. For such purpose, employers cannot ban access to trade unions. At least 15 people working in the same unit are required to set up a trade union. A person may only belong to one trade union organisation within an employer at the same time and there are certain people, such as public officials, members of the military and members of government ministries who may not establish a trade union.

In defending the rights of their members, trade unions have the right to undertake any action provided for by the law. This includes the ability to bring a court action on behalf of their members based on an express mandate from the persons concerned (the action cannot be continued if the person concerned opposes or renounces the trial). The representative trade union is entitled to receive from employers any necessary information for the negotiation of collective bargaining agreements and other agreements relating to employment relations. Employees who are elected to the management body of a trade union are protected against all forms of constraint or the limiting of the exercise of their functions.

As regards the works councils, the European Directive on the establishment of European Works Councils has been implemented within Romanian law. The main provisions regulate the creation of a European works council (or an alternative procedure) for informing and consulting employees at the European level.


Employees’ Right To Strike

Employees shall be entitled, based on the provisions of the Labour Code, to strike, with a view to defend their professional, economic, and social interests. Any limitation or prohibition of the right to strike may only intervene in those cases and for those employee categories expressly provided for by law.


Employees On Strike

No employee may be forced to participate in a strike. Participating in or organising a legal strike does not represent a breach of the employees’ duties and cannot have negative implications for their employment relationship. During the strike, the individual employment agreements of the employees participating to the strike are suspended.


Employers’ Responsibility For Actions Of Their Employees

According to the general rules of civil law, employers are responsible for the damages caused by their employees, in the exercise of their work duties. Therefore, the employer is liable to pay any compensation resulting from the employee’s actions. However, the employer may request the employee to return the compensation he/she was paid as a result of his/her actions.

Procedures For Terminating the Agreement

The employment agreement can only be terminated in specific and limited cases as provided for by the Labour Code, and the procedural requirements must be met. The main categories of dismissals regulated under Romanian law are dismissal for causes unrelated to the employee (i.e. restructuring, redundancy) and dismissal for causes related to the employee. Dismissal for causes unrelated to the employee can be done if economic or operational reasons cause employers to reduce the workforce. Dismissals for bad performance and for disciplinary reasons are among the most common types of dismissal for causes related to the employee. In both cases, specific procedures must be followed. An employer’s failure to comply with such procedures may trigger the annulment of the dismissal decisions in court. The same sanction shall apply if the employers cannot prove that the dismissal reasons are real and fall within the categories recognised by the Labour Code as entitling employers to perform dismissals.


Instant Dismissal

Under Romanian law, employers cannot terminate an employment agreement by means of instant dismissal for any reason whatsoever. Employers have to observe the procedures laid down in the Labour Code in this respect.


Employee's Resignation

The individual employment agreement may be unilaterally terminated by the employee provided that he or she delivers to the employer prior notice. The notice period in cases of resignation is of 20 business days for employees holding non-management positions and 45 business days for those holding management positions. However, the employer may choose to accept immediate resignation.


Termination On Notice

Where the employment agreement is terminated by the employer, the employee is entitled to a prior notice period. An employer is obliged to observe a 20-day prior notice period for all categories of dismissals, except when the dismissal is done for disciplinary reasons or when the employee is arrested for more than 30 days.


Termination By Reason Of The Employee's Age

The provisions of the Labour Code which regulated the possibility of the employer dismissing an employee when he reaches retirement age and where he did not request the retirement have been repealed. Thus, the individual employment agreement of an employee who reaches the retirement age and who also fulfils the minimum standards provided under the social security system is terminated automatically by law.


Automatic Termination In Cases Of Force Majeure

Romanian law does not provide for the possibility of automatic termination of an employment agreement in cases of force majeure. The termination of an employment agreement by law is only possible in the limited cases provided by the Labour Code.


Collective Dismissals

Where the number of redundancies throughout a consecutive period of 30 calendar days exceeds certain thresholds, the collective dismissal procedure must be followed. The procedure that must be followed in the case of collective dismissals entails prior information and consultations with the trade unions or the employees’ representatives in respect to any available means of avoiding collective dismissals and the appropriate means for mitigating the consequences of the collective dismissals (such as support for requalification and professional retraining). The labour authorities must also be informed in writing about the initiation and outcome of the information and consultation process. The collective dismissal procedure takes about two months and a half to complete.


Termination By Parties’ Agreement

Employment may be terminated by mutual consent of the parties by way of a termination agreement. The employer may also use a so-called “voluntary plan” to terminate the employment agreement, provided that the employee agrees with such termination.


Directors Or Other Senior Officers

Under Romanian law, there are no special rules which relate to the termination of employment agreements of employees holding a management position. In such cases, the general rules provided by the Labour Code shall apply. In cases of joint stock companies, the directors and the general manager cannot conclude an employment agreement for their job positions. In such a case, they conclude management agreements which may be terminated according to commercial regulations.


Special Rules For Categories Of Employee

There are some categories of employees (e.g. pregnant women, trade union leader) who benefit from more generous rules for protection against dismissals.


Whistleblower Laws

In Romania only whistleblowing within public institutions, and the protection of employees and public servants in public institutions is legally regulated. The whistleblower has to act in good faith and for the general interest in order to be protected. For the private sector, internal rules may be adopted when considering the protection of an employee in whistleblowing cases.


Specific Rules For Companies in Financial Difficulties

In principle, there are no special provisions regarding the termination of employment agreements in cases where the employer is in financial difficulties. However, specific rules apply in cases where a bankruptcy procedure has been declared against a company. Thus, by means of exception from the general employment rules set up by the Labour Code, the employment agreement concluded by a company which is subject to a bankruptcy procedure shall be immediately terminated by the judicial administrator/liquidator. In such cases, the rules relating to collective dismissals shall be applicable, the terms for informing and consulting with the trade unions or the employees’ representatives, as well as the terms for informing the labour authorities are reduced to half. The employees are entitled to benefit of the legalprior notice term of 20 business days. Within the bankruptcy procedure, wages shall be paid before any other debts owed to other creditors.


Special Rules For Garden Leave

Garden leave is not expressly regulated by the Romanian law. Pursuant to Romanian Labour Code, the employment agreement remains valid throughout the prior notice, with all the related rights and obligations being enforceable.


Restricting Future Activities

Under Romanian law, the clauses restricting future activities of the employees are permitted with certain limitations. Such clauses may refer to non-competition obligations of the employees for a determined period, after the termination of the employment relationship with the employer. Based on the provisions of the Labour Code, employees have a general obligation of loyalty towards their employers, preventing them from performing similar activities for other employers throughout the duration of the individual employment agreement. In addition, the parties may agree to turn this into a non-competition obligation applicable after the termination of the individual employment agreement for a maximum period of 2 years after termination of employment. In such a case, a monthly indemnification shall be granted by the employer to the employee for the entire non-competition period following the termination of the employment, which cannot be less than 50% of the employee’s average gross salary in the 6 months prior to termination.


Severance Payments

Employees whose individual employment agreements are terminated without cause (for reasons not related to their person) are entitled to receive severance payments, if regulated under the applicable collective bargaining agreements.


Special Tax Provisions And Severance Payments

The contractual payments made by the employer in consideration of the employment agreement are subject to income tax. Under Romanian law, the level of income tax is 10% applicable to the gross wage and the related rights. The severance payments made upon the termination of the employment agreement are also subject to income tax. Specific exemptions in relation to the payment of income tax for certain employment allowances are provided by the Romanian Fiscal Code.


Allowances Payable To Employees After Termination

Under Romanian law, employers are not required to contribute to any allowances payable to employees after termination of the employment agreement, except for those agreed by the parties (i.e. for fulfilment of a non-competition obligation).


Time Limits For Claims Following Termination

The employee may challenge the dismissal decision before the competent court of law, within a period of 45 days starting with the communication. Such provisions should be clearly stipulated in the dismissal decision. In employment conflicts, the burden of proof is upon the employer. Therefore, the employee simply has to prove that employment has been terminated; then it is for the employer to prove that the employee’s dismissal was legally carried out.

Specific Matters Which Are Important Or Unique To This Jurisdiction

A specific matter within Romanian law is the lack of instant dismissals. For no reasons whatsoever the employer can dismiss an employee on the spot. Dismissals under Romanian law are strictly integrated within specific procedures.

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Contact a Contributing Author:
Șerban Pâslaru
Ţuca Zbârcea & Asociaţii
Bucharest, Romania

Disclaimer:

© 2021, Ţuca Zbârcea & Asociaţii. All rights reserved by Ţuca Zbârcea & Asociaţii as author and the owner of the copyright in this chapter. Ţuca Zbârcea & Asociaţii has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this Guide.

The information in the How to Hire and Fire Guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: June 2021