One of the biggest complaints about Romania which we Romanian lawyers hear from clients concerns the constant changing of legislation. This is not only applicable in the field of taxation and finance but also in other areas which affect business. True to form a new law has been issued amending the Labour Code.
The Romanian Labour Code – Law no. 53/2003 was recently amended by Law no. 12/2015 which was published in the Official Gazette on 22 January 2015. The new law entered into force on 25 January 2015.
Whilst there are not many amendments there are amendments relating to the calculation and granting of seniority, annual leave and to the level of salary payable to temporary employees.
Under the amendments periods representing unauthorised absences from work, as well as unpaid leaves (except for unpaid leaves for professional training) shall be deducted from work seniority. Thus, upon calculating any rights of the employees/ former employees based on work seniority (i.e. bonuses, pension rights, etc.) such periods shall not be considered.
Perhaps the most important amendment is in relation to temporary employees. The Law expressly provides that the temporary employees for each assignment shall receive a salary at least equal to the salary of the employers own personnel performing the same work or similar work to the one performed by the temporary employee. In case there is no similar employee carryout the work as the one hired by the beneficiary the temporary employee’s salary shall be established by referring to the salary of a person hired to perform same or similar work, as established in the collective bargaining agreement applicable to the beneficiary.
Although not expressly regulated until now under the previous regulations it could have been interpreted that temporary employees should be granted salary rights similar to the ones of the employers personnel, based on the grounds of non-discriminatory treatment established by the law in favour of the temporary employees. As this interpretation of the law was not unanimous among legal scholars, the current amendments finally settle this issue.
Under the new regulations, periods of temporary work incapacity, maternity leave, maternal risk leave and leave for childcare do not affect the number of days of annual leave that the employees are entitled to every year. If any of these periods intervene during the annual leave, then the leave shall be treated as interrupted and the employee shall be entitled to take the remaining days after the periods end. If not possible, the remaining days shall be rescheduled.
According to the new provisions, the employees have the right to benefit from the annual leave even if the temporary work incapacity lasts for the entire calendar year. In such a case, the employer has to grant the annual leave to the respective employees within 18 months starting with the following year.
Moreover, the Law now extends the carry over period of the annual leave. In case the annual leave is not taken, during the relevant calendar year, the employer has to grant the leave, with the employee’s approval, within a period of 18 months starting with the following year. Under the former regulations, in such a case, the employer had to grant the annual leave by the end of the following year.
Another amendment refers to the termination of the employment agreement in case of retirement. The Law now provides that the employment agreement shall be terminated de jure (i) when the retirement decision is communicated in case of 3rd degree disability retirement, and (ii) when the medical decision on work capacity is communicated, in case of 1st or 2nd degree disability.
These amendments whilst appearing minor in nature do place additional burdens and costs on the employer. Small companies may not be affected as such but employers with a large number of employees certainly need to be aware of them. In my view the question of the salary for the temporary employees is perhaps the most important as usually the other matters are dealt with by agreement.
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