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10 September 2020

Romania: New changes in labour law

Soon employers will have to amend their internal regulations in order to adapt them to the imminent labour law changes to be announced. At the same time, they should consider the opportunity of inserting new clauses into individual employment agreements, referring to the newly introduced conciliation procedure for labour disputes.

In this article, we discuss new concepts that will be introduced in the Labour Code according to a bill adopted on 8 September 2020 by the Chamber of Deputies, as well as issues employers need to pay attention to.

The new provisions require employers to formalise the way they choose to organise their human resources and payroll operations, as follows:
by employers adopting particular responsibilities;
by designating one or more employees to handle aspects of human resources and payroll operations, as reflected in their job descriptions;
by contracting external services specialised in human resources and payroll, which must be coordinated by an expert in labour law.
In order to implement the new provisions, employers should issue internal decisions to establish the organisation of human resources and payroll operations specific to each company.

Employers and employees can use a new procedure for the amicable settlement of individual labour disputes - conciliation, as follows:
conciliation is implemented with the help of an external consultant specialised in labour law (lawyer, expert in labour law or, as the case may be, mediator specialised in labour law);
the term for challenging the object of the conflict in court is suspended during conciliation.
If they wish to introduce conciliation as a procedure to amicably settle individual labour disputes, employers should amend individual employment agreements to introduce a conciliation clause. They should also include the conciliation procedure in the internal regulations.

Employers and employees have new options to help them with disciplinary investigations, but also with the negotiation, conclusion or amendment of an individual employment agreement, as follows:
either party may be assisted by an external consultant specialised in labour law in the negotiation, conclusion or amendment of the individual employment agreement;
the employer may have an external consultant specialised in labour law conducting the disciplinary investigation, so they can entirely outsource this operation;
the employee, in turn, has the possibility to be assisted within the disciplinary investigation, on request, by an external consultant specialised in labour law (therefore, not only by a lawyer, but also by an expert in labour law) or by a representative of the trade union of which he/she is a member.
In order to implement the new provisions, employers must amend the provisions of their internal regulations with the trade union or the employees' representatives agreement. Also, to the extent that they decide to outsource the disciplinary investigation operations, employers will need to explicitly authorise their respective external consultants for this purpose.

Lastly, in view of the principle of good faith and mutual information and to ensure the right to a fair trial, employers must, according to the new regulations, consider informing employees targeted by a disciplinary investigation of their right to be assisted by an external consultant specialised in labour law.

What to expect?
The law adopted on 8 September 2020 has been submitted to the Secretary General challenging its constitutionality, and will be sent to the President of Romania for promulgation.

If it enters into force in this form, it will generate important changes in labour market operations. Thus, companies that provide payroll and personal administration services will be required to certify some of their employees as experts in labour law.

On the other hand, even in this concise form, the provision for the procedure of conciliation of individual labour disputes is welcome. It strengthens an increasingly common practice, by which companies and employees prefer to settle, whenever possible, by mutual agreement, any potentially litigious situations, with obvious benefits in terms of cost, time and reputation. Thus, it is expected that the conciliation procedure will contribute even more to limiting the number of individual labour disputes faced by specialised courts of law.


Counsel | head of labour & employment (bucharest)