Changes in the Labor Code of Romania

Under Romanian law, employers must fulfill certain obligations before contracting with a Romanian or foreign individual. There are mainly two types of employment agreements in Romania regardless of whether the hired individual is a resident or non-resident. The first is an employment agreement for an indefinite period – where employee protection is granted with the rule that every employment contract has to be concluded for an unlimited duration. Secondly, underemployment agreements for definite periods, where services are hired for project-based work, the contract may be concluded for a limited duration. The duration and the job description are meant to be clearly stated under the terms provided by the state-mandated labor code.

Effective September 2020, a bill adopted by the Chamber of Deputies introduced new concepts to the Labor Code of Romania. The new Labor Code aims at flexible working relationships and a stimulating environment while protecting the rights of its employees.

Organized Human Resources

The new provisions state that employers must formalize the way they recruit employees and organize their payroll operations. Employers are required to adopt responsibilities such as designating one or a team of employees to handle recruitment and payroll as part of their job description. Employers can also hire a third-party service, coordinated by an expert in labor law, specializing in human resource and payroll management.

Labor Disputes Settlement – Conciliation

Employers and employees can use new procedures in the event of labor disputes. Conciliation is enacted with all parties involved in the presence of an external consultant. The external agent must be an expert in labor law, whether a lawyer, mediator or consultant. In order to attain a peaceful resolution, the term for challenging the object of the conflict and taking the matter to court is suspended. Employers are advised to amend their existing employment agreement if they wish to introduce a conciliation clause. Including the conciliation procedure within the guidelines and regulations can be beneficial to both the employee and employer.

Amendments to Individual Employment Agreements

Both employer and employees now have the option to seek help and assistance concerning disciplinary investigations, negotiations, and conclusions. Either party is allowed the assistance of a third-party expert in the Romanian Labor Code and can use consultancy for negotiations, conclusions, or amendments to the individual employment agreement.

In the event of conducting a disciplinary investigation, the employer can choose to outsource the operation by an agency specializing in Labor Code. If an employee wishes to seek legal consultation during the investigation process, they may do so by requesting the help of an expert or a representative of the trade union they’re a member of. It is required by law for employers to inform their workers targeted by the investigation of their right to an external consultant.

These changes to the Labor Code promise to generate necessary reforms to the operations of the labor market. It is expected to drive up the demand for experts in labor law, and it enables important checks and balances that will benefit not just the employees but the employers as well. Read more about doing business in Romania here.

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