Romania currently has one of the most employee friendly legal regimes in the European Union. We are often asked to advise on the problems in terms of restructuring and dismissal of employees. Whilst not as employee friendly as France or Italy Romania comes very close behind.
For all employers, the question of employee protection and employee’s rights becomes important as a company develops or needs to restructure or there is a change in ownership of the organization.
There are several ways in which employers can use the current rules and regulations, but these need to be followed closely before any steps are implemented. Employers approach us to try and resolve an employer/employee relationship after the employer has terminated the contract of employment. It is important that we as Romanian lawyers should have been consulted for advice before rather than after the contract was terminated to ensure that the legal formalities were observed and followed. For western managers and HR staff where the ability to hire and fire is an attribute of management, Romania’s employment legislation represents a real problem that needs to be considered.
The rules of employment are enshrined in the Romanian Labour Code which was passed in 2003. There have been a number of amendments since then in various statutes, but the basic rules still apply. This places greater responsibility on the company’s human resources department and advisors who must be aware not only of the legislation, the various agreements but also each individual contract of employment.
Before taking any action in respect of an employee the employer needs to examine carefully both its position and that of its employees. If disciplinary measures are contemplated, then the provisions as set out in the law must be followed. If they are not, then an employee can apply to the court for review and the court can order the employee to be re-employed as well as award damages.
Many companies and HR managers consider this to be grossly unfair and anti-business. The rule for management has therefore to be that before you take any steps in relation to an employee to obtain legal advice to make sure that you are fully aware of your rights and obligations as an employer and what are the rights, and obligations of the employee. If there is any doubt, then obtaining proper legal advice and following that advice and the provisions of the law should allow the employer to deal with the matters.
The employer should make sure any discussions and decisions are recorded in writing. Any decisions and discussions should be transmitted to the employee in writing if required by the law and the employment contract. Employers should not believe that all the problems can be solved by payment of monies by way of compensation. It can be disconcerting to have to re-employ someone who you wish to remove from the company. It is not good for staff relations and can cause problems in the future with other employees. Following the strict rules of procedure (form over substance) may appear to be time-consuming and archaic but in the future will save the company and management time and money.
The moral behind this article is that provided proper attention is paid to the legal and contractual obligations between an employee then problems can be avoided. Whilst the grounds for terminating an employee’s employment contract are limited, they can be done in a proper and orderly fashion with the minimum problems for the employer.