End of employment in Romania

Employee Termination Procedures & Guidelines in Romania

Termination procedure

The employer can terminate an employment agreement due to various circumstances.

De jure termination

• At the date of the employee’s death or the employing company’s dissolution
• At the date of the employee’s death declared by the court or the employee’s being banned from working by the court
• At the date the retiring conditions are met (standard retirement age and minimum contribution stage), at the date the retirement decision is communicated, or at the date the medical decision of work incapacity is communicated in case of disablement
• As a result of the contract being declared null
• As a result of accepting a reintegration request for an employee unlawfully dismissed (relevant for the employee who replaced the reintegrated individual)
• As a result of the employee’s criminal conviction
• At the date of the employee’s work authorization or permits being revoked by the authorities
• At the date of the employee’s professional activities being banned by the court
• At the date when the employment agreement concluded for a determined period expires
• As a result of the parent’s consent being withdrawn regarding employees between the ages of 15 and 16

During the probation period

Either party may terminate a contract during the probation period, without the requirement of observing the notice period and based on a written notification.

By mutual agreement

The contract can end (1) following the employee’s request to end the contract at a specific date (with no notice period observed) as a result of the employer’s consent or (2) following the mutual agreement signed between the parties (with no notice period observed).

Summary dismissal

The employer can dismiss the employee in various situations.

A. Reasons pertaining to the employee:

• if the employee commits a gross misconduct
• if the employee is pre-emptively arrested for a period exceeding 30 days
• if the authorized regulator deems the employee to be physically or mentally inadequate for the position
• if the employee is professionally inadequate

In the case of a gross misconduct, certain steps have to be followed before a disciplinary dismissal:

• The employer has to be notified of the employee’s misconduct.
• A disciplinary committee has to be formed.
• The employee has to receive a notification of the disciplinary hearing, with the following elements included:
• list of the committee members
• date, hours, place of the hearing
• the action that is the object of the hearing
• confirmation that the employee’s representative/lawyer can accompany the employee for the purpose of defence

After the hearing takes place, the committee makes a decision, weighing the accusation and the employee’s defence.

If the employee refuses to appear at the hearing, the committee can perform the hearing in the employee’s absence. If the committee decides to terminate the employment, they have to bring their decision to the employee’s attention within not more than five days.

To prove the employee’s professional inadequacy, a direct manager must first present a review of poor results with observations.

Then, the manager has to draw up an action plan, giving the employee a chance to get the performance back on track by a certain date.

If the result isn’t successful, the employer has to offer the employee another position in the company, more appropriate to the employee’s abilities.

Finally, if such position isn’t available, the employer can proceed with the dismissal.

B. Reasons not pertaining to the employee:

• The employer cancels the position (redundancy).
• The employer carries out a collective dismissal.

The employer must issue an objective reason regarding each dismissal cause mentioned above, with as many details as possible:

• no use for the position due to externalised services
• financial loss
• decrease in activity
• poor company performance and need to reduce its activity

Unfair Dismissal Guidelines in Romania

Employee termination protection

Certain employees find protection from being dismissed during certain periods of their lives, as follows:

• Illness, with medical proof
• Pregnancy and maternity leave
• Paternity leave
• Parental leave (The period during which the employee can’t be dismissed is extended by six months from the date the employee returns to work from parental leave.)
• Performance of a military exercise

In addition employees cannot be terminated for any reasons that may be deemed discriminatory such as their race, sex, language, political or union views, or religion.

They also are protected from termination when the employee is in receipt of reinsertion allowance and for exercising the rights to be informed on employment-related issues, trial periods, requesting a transition to a vacant position with more favourable conditions; participating in professional training courses provided by the employer.

Consequences if termination is deemed unlawful

Employees have the right to challenge termination decisions in court. Proceedings usually take around one year, depending on complexity. If the employee wins, the court declares the termination invalid. Then, the employer reinstates the employee, covering the employee’s court expenses and paying the employee’s salary and other salary rights for the period between termination and reinstatement. On rare occasions, the employee can also receive additional compensation for moral damages.

Resignation Procedure in Romania

Employees can resign after observing the notice period, or the employer can waver part or all of the notice period, with a maximum notice period being 20 working days (45 for management positions). In practice, if the employee doesn’t want to observe the notice period in full, the employer has no way to enforce it.

Redundancy Pay and Entitlement in Romania

Protection against unfair dismissals

Employers need to have a valid and recognised reason to terminate an employee. The Labour Code recognises the following as such reasons:

• Redundancy or layoff caused by organisational changes
• Company’s dissolution or relocation
• Employee’s being medically unfit to work
• Failure to fulfil the performance requirements or the work results, with no position more suitable being available in the company
• Breach of work-related obligation(s) and misconduct
• Probationary period.
• End of the fixed-term contract.

Notice of termination

Notice period duration in case of dismissal, should be no shorter than 20 working days.

Other End of Employment Guidelines in Romania

Severance

The employee can claim severance pay if the company ceases to exist or relocates, or if the employee’s role becomes redundant as a result of the company’s re-organization. Individual or collective agreements should contain the amount of severance pay, with a minimum of one month’s salary being the practice.

Notice period

Notice period in case of resignation, should be no longer than 20 working days for execution positions and 45 working days for management positions.