There is now a growing need in Romania for temporary employees and a pool of people ready to work on a temporary basis. As the economy matures and a younger, more mobile work force emerges, the needs of the Romanian business community have changed. We are aware that some Romanian law firms often use this type of employee when their employed staff, as distinct from their collaborators, are absent for reasons of illness , maternity leave etc. as a short term solution.
This has led to a growing number of temporary workers in the business community and consequently the growth of temporary employment agencies. Historically, temporary employees were found by word of mouth, were often not in the mainstream job market network and were paid by cash in hand. The black economy.
This has now changed and the market is becoming more sophisticated and mature as far as temporary employment is concerned. There now are a number of companies who supply temporary employees on a proper regulated basis to companies and individuals both weeks and months as required.
The relationship between the temporary employee and the agency is usually that of employer/employee. The employee is then seconded by the agency to the client company that wants a worker for a limited period of time. The employee always remains the employee of the agency and does not become an employee of the client company. This means that the agency is responsible for all taxes and social security payments and deductions whilst at the same time receiving a fee from the company to whom the temporary employee was seconded.
A special type of employment contract is used for this type of employee and the temporary employment agency has to be registered with the authorities as a supplier of temporary labour. This is an area in which the EU has become involved and has passed legislation and developed special rules in relation to temporary employees to cover their position and security and to avoid their exploitation.
Some temporary employment agencies who do not wish to be involved in the administration of employees resort to and use persons who are registered as a PFA (Persoana Fizica Autorizata) to carry out the temporary work. A further variant is the use of mandate contracts. Both these two contracts are legal under Romanian law and move the responsibility of paying taxes and social security payments onto the worker who is hired under such contracts. In these two cases the temporary staff are not employees of the temporary employment agency. Their supply to the client company is not the supply of temporary employees, and it is arguable that no license is needed by the company supplying such persons to third parties.
There is an inherent risk in using these types of contracts and that is if the place where the temporary worker is working is visited by the Health and Safety inspectors or other Government agencies that may very well decide that the staff are temporary employees. This could result in a fine for both the company that supplied the temporary worker and the company who took on the temporary worker, for being in breach of the temporary employment regulations, as well as the Romanian Labour Code. This could further lead to the company supplying the temporary employee losing their temporary employee authorization, if they have one, and being unable to obtain an authorization in the future if they wanted to obtain such an authorization.
As a prudent employer and business in Romania if you wish to supply temporary employees, you should not in our view try to short circuit the position. It is better to be legal and above board and carry on your business in a fully legitimate way. As Romanian lawyers it is not our role to police our clients’ activities but our reputation as a Romanian international law firm does rely upon us advising on the law as it stands and pointing out areas where there could be issues.