Termination of Employment Relationships: Legal situation in Romania

Transcription

1 Termination of Employment Relationships: Legal situation in Romania Luminiţa Dima Professor (Lecturer) of Labour Law and Social Security Law Faculty of Bucharest University

2 Contents I. Sources of law (1) Constitutional provisions on the right to work (2) International agreements and conventions (3) Sources of law and their hierarchy (4) Role of judge-made law and custom II. Scope of the rules governing the termination of an employment relationships, special arrangements (1) Ways of terminating an employment relationship (2) Exceptions or specific requirements III. Termination of employment relationship by mutual agreement of the parties (1) Evolution of legislation. (2) Substantive conditions (3) Procedural requirements (4) Effects of the agreement (5) Vitiating factors, remedies (6) Penalties (7) Collective agreements (8) Relations to other forms of termination IV. Termination of employment relationship otherwise than at the wish of the parties de jure termination of the individual labour contract (1) Evolution of legislation (2) Cases/grounds of de jure termination 2.1. Death of employee or death of employer, if he/she is a natural person 2.2. Declaring the death or placing under interdiction of the employee or of the employer, if he/she is a natural person, by final judgement of a law court 2.3. Dissolution of the employer who is a legal entity 2.4. Communication of employee s retirement decision 2.5. Acknowledgement of the absolute nullity of the individual labour contract 2.6. Reinstatement in the position occupied by the employee of the person who was previously dismissed from the same position unlawfully or for ill-founded grounds 2.7. The employee is sentenced to execute a custodial penalty 2.8. Withdrawal of the approvals, authorisations, or certifications necessary for exercising one's profession 2.9. Interdiction to exercise a profession or to perform a job Expiry of the duration of the individual labour contract concluded for a fixed term Withdrawal of the parents or legal representatives consent (3) Procedural requirements (4) Effects of the existence of a ground of de jure termination of employment relationship (5) Remedies 2

3 (6) Penalties (7) Collective agreements V. Termination of employment relationship by employer s initiative - dismissal 1. Evolution of legislation 2. Overview of the legislation in force 3. Prohibition of employee s dismissal 4. Dismissal on disciplinary grounds (1) Substantive conditions (2) Procedural requirements (3) Effects of dismissal (4) Remedies (5) Suspension of the effects of the dismissal (6) Restoration of employment (7) Penalties (8) Collective agreements 5. Dismissal for other reasons related to the employee s person (1) Substantive conditions (2) Procedural requirements (3) Effects of dismissal (4) Remedies (5) Suspension of the effects of the dismissal (6) Restoration of employment (7) Penalties (8) Collective agreements 6. Dismissal for reasons not related to the employee s person (1) Substantive conditions (2) Procedural requirements (3) Specific requirements for collective dismissals (4) Effects of dismissal (5) Remedies (6) Suspension of the effects of the dismissal (7) Restoration of employment (8) Administrative or criminal penalties (9) Collective agreements (10) Special arrangements VI. Termination of employment relationship by employee s initiative - resignation (1) Evolution of legislation (2) Substantive conditions (3) Desertion of the post (4) Procedural requirements (5) Effects of the resignation (6) Remedies 3

4 (7) Compensation to the employer (8) Contrived resignations (9) Resignation for proper cause (10) Collective agreements VII. General questions relating to all forms of termination of employment relationships (1) Non-competition agreements (2) Agreements to the effect that the employee will not terminate the contract during a certain period (3) The issuing of a reference (4) Full and final settlement ANNEX Termination of the employment relationships during the probationary periods 4

5 I. Sources of law (1) Constitutional provisions on the right to work Article 41 of the Constitution of Romania 1 stipulates the right to work and the principle of social protection of labour. The constitutional provision guarantees the freedom of work stating that the right to work shall not be restricted and that everyone has a free choice of his/her profession, trade or occupation, as well as workplace. According to this provision, all the employees have the right to measures of social protection. (2) International agreements and conventions From among the international conventions and regulations adopted in the area of termination of the employment relationships, Romania ratified ILO Convention no. 135/1971 concerning protection and facilities to be afforded to the workers representatives in the undertaking by Decree no. 83/1975 of the State Council 2. Romania also ratified the revised European Social Charter by Law no. 74/ (3) Sources of law and their hierarchy In 1989, the year of the Romanian communist regime s fall, the labour legislation in force was based on the principles of the centralized economy and socialist ideology. However, although the Romanian society and economy felt the necessity of a new labour legislation, the Labour Code adopted in 1972 survived until Between 1990 and 2003 Labour Code s provisions were modified mainly by means of adoption of a very consistent supplementary legislation (e.g. law on labour collective agreements, law on trade unions, law on labour conflicts, law on collective redundancies, etc.). The legislation adopted during this period did not substantially affect the regulations concerning individual termination of employment relationships. At present, the general legal framework for termination of employment relationships is established in Romania mainly by the provisions of the new Labour Code ( Codul muncii ). The Romanian Labour Code in force was adopted in 2003 (Law no. 53/ ), following an elaboration process of several years. The adoption of the Labour Code represents a fundamental part of the process of approximating Romania s labour legislation in-line with European legislation. The Labour Code provides detailed regulations concerning all the modalities of employment relationships termination: mutual agreement, individual and collective dismissals, resignation, as well as termination by the effect of the law (de jure). Following Romania s entrance into a programme of reforms of the institutional and regulatory frameworks with a view to consolidate the functioning of a market economy through continued development of the private sector, promotion of a business environment, increasing flexibility of the labour market with a view to increase the competitiveness of the Romanian economy and to stimulate economic growth and employment, the Labour Code was recently amended (Government Emergency Ordinance no. 65 of July 2005 approved by Law no. 371 of December 1 The Constitution of Romania of 1991 was amended and completed by the Law no. 429/2003 on the revision of the Constitution of Romania and, subsequently, republished in the Official Bulletin of Romania no. 767 of 31 st of October Decree no. 83/1975 was published in the Official Bulletin of Romania no. 86 of 2 nd of August Law no. 74/1999 was published in the Official Bulletin of Romania no. 193 of 4 th of May Law no. 53/2003 was published in the Official Bulletin of Romania no. 72/2003 5

6 ). The amendment of the Labour Code affected the provisions concerning the termination of employment relationships such provisions being considered as very important for the labour market flexibility. The recent amendment of the Labour Code represents from the Romanian Government point of view the first step of the envisaged amendments of the labour legislation. Proposals elaborated by different stakeholders (employers, lawyers, judges, etc.) in order to improve and flexibilize the legal provisions concerning the termination of employment relationships constituted subject of discussion between the social partners and could be taken into account within the process of elaboration of the future amendments 6. For some categories of employees there have been adopted specific laws: e.g. Statute of civil servants (Law no. 188/1999), Statute of teachers (Law 128/1997), Statute of company s legal advisers (Law no. 514/2003), Statute of the employees of the transportation companies (Decree no. 360/1976), Statute of the employees of the post offices and telecommunication companies (Decree no. 361/1976), Statute of the magistrate s profession (Law no. 303/2004). Such laws stipulate only few rules derogating from the general provisions stated within the Labour Code concerning the termination of employment relationships. Labour collective agreements also provide rules in the area of employment relationships termination. Such agreements may be concluded at the level of the employer, group of employers and branch of activity. The clauses of the labour collective agreements grant to the employees a wider protection that the protection provided by the labour legislation. A very important aspect of the labour collective agreements concluded under the Romanian legislation at the national level and branch level is that such agreements have universally binding character 7. Rules on termination of employment relationships may also be provided by the company s internal regulations and individual labour contracts. Such rules must comply with the provisions of the legislation in force and clauses of applicable labour collective agreements. (4) Role of judge-made law and custom 5 Law no. 371/2005 approving the Governmental Emergency Ordinance no. 65/2005 on the amendment of Law no. 53/2003 Labour Code was published in the Official Bulletin of Romania no of 19 th of December A new proposal of amendment of the Labour Code was published on 31 st of July 2006 on the website of the Romanian Ministry of Labour, Social Solidarity and Family. The amendment of the Labour Code has been appreciated as being necessary for the removal of the deficiencies mentioned within the May 2006 Monitoring Report elaborated by the European Commission, in view of the accomplishment of the commitments overtaken by Romania within the process of accession negotiations concerning Chapter 13 Social policy and employment, in order of approaching the national legislation to the acquis communautaire. In the area of termination of employment relationships the proposed amendment refers only to the notion and procedure of collective redundancies see infra footnotes at point V.6.(3). 7 According to article 241 paragraph (1) of the Romanian Labour Code, The clauses of the collective labour contracts shall cause effects as follows: a) for all employer's employees, in the case of the collective labour contracts concluded at such level; b) for all employees hired by employers who belong to the group of employers for which the collective labour contract has been concluded at this level; c) for all employees hired by all the employers in the branch of activity for which the collective labour contract has been concluded at this level; d) for all employees hired by all the employers in the country, in the case of the collective labour contract at a national level. 6

7 Jurisprudence plays a role only in the interpretation of the legislation. However, in case during a trial a judge suspects that a specific legal provision breaches the constitutional provisions he may refer the matter to the Constitutional Court. The decision by which the Constitutional Court declares such legal provision as being unconstitutional has erga omnes effects. The custom plays no role in the area of labour relationships. 7

8 II. Scope of the rules governing the termination of an employment relationships, special arrangements (1) Ways of terminating an employment relationship The individual labour contract may be terminated only in one of the situations expressly provided by the Labour Code. According to article 55 of the Labour Code, the individual labour contract can be terminated as follows a) de jure; b) based on the parties consent, on the date agreed upon; c) as a result of the unilateral will of one of the parties, in the cases and under the terms limitedly stipulated by the law 8. All types of individual labour contracts may be terminated by any of the above-mentioned modalities, under the terms stipulated by the law. (2) Exceptions or specific requirements As mentioned at point I. (3) above, for some categories of employees there have been adopted specific laws: e.g. civil servants, teachers, legal advisers employed by means of individual labour contracts, employees of the transportation companies, employees of the post offices and telecommunication companies, magistrates. The ordinary rules provided by the Labour Code also apply to these categories of employees, unless the specific applicable law expressly derogates from the Labour Code s provisions. Such specific laws generally stipulate derogatory rules on grounds and procedure of dismissal for disciplinary reasons, employees retirement and, exceptionally, other modalities of termination of employment relationships (e.g. civil servants). Under the Romanian labour legislation there are no specific requirements for certain types of contract. The legislation regulates indefinite term and fixed term individual labour contracts, fulltime and part-time individual labour contract, temporary work contracts, homeworking, apprenticeship contracts (particular fixed-term labour contracts) without mentioning any derogatory rules. The size of the enterprise plays a role only in collective dismissals. There are no additional specific requirements in relation with the size or characteristics of the employer. However, some specific provisions relating to termination of employment relationships depend on the employee s specific situation. For example, in case of resignation of employees in executive positions the notice period cannot exceed 15 calendar days, while in case of employees in management positions the notice period cannot exceed 30 calendar days. Other specific rules apply for the termination of the individual labour contract of the employee who is on probationary period. Thus, in case one of the parties intends to terminate the individual labour contract during or at the end of the probationary period he/she is not obliged to observe the procedure provided by the Labour Code being enough to provide to the other party a written notification to this end. In this case do not apply the ordinary rules. 8 As an exception, only in case one of the parties intends to terminate the individual labour contract during or at the end of the probationary period he/she is not obliged to observe the procedure provided by the Labour Code being enough to provide to the other party a written notification to this end - article 31 (4¹) of the Labour Code. 8

9 III. Termination of employment relationship by mutual agreement of the parties (1) Evolution of legislation. Termination of employment relationship by mutual agreement of the parties has been always grounded on the principles of the Romanian Civil Code stating that any contract concluded in conformity with the law may be terminated by mutual agreement (mutuus dissensus) of the parties. This modality of termination of the employment relationship is an expression of the freedom of work principle and both Romanian previous and present Labour Code expressly stipulated it. Article 55 let. b) of the Romanian Labour Code in force only states that the individual labour contract may be terminated based on the parties consent on the date agreed by the parties. As well as under the previous Labour Code, no other detailed provision related to the termination of employment relationship can be found within the Labour Code. By consequent, provisions of the Civil Code are applicable. (2) Substantive conditions There are no specific provisions on termination of employment relationship by mutual agreement of the parties. The general rules on termination of contracts are applicable. Thus, according to the rules of civil law, the mutual agreement of the parties on termination of employment relationship must accomplish all the conditions provided by the law for the valid conclusion of any juridical act (contract) legal capacity of parties, parties valid consent, etc. (3) Procedural requirements Under the Romanian labour legislation there are no procedural requirements. The general rules on termination of contracts are also applicable. Although the Labour Code does not impose the written form of the mutual agreement of the parties on termination of the employment relationship as condition of validity, the doctrine recommends ascertaining in writing the agreement of the parties. However, the will of any of the parties must be unambiguous. In case of employee absences from his/her job it cannot be assumed employee s will to terminate the individual labour contract. On the other side, in case the employer is a legal entity, the will of the employer must be expressed only by the competent bodies. Finally the doctrine and jurisprudence agreed that the rules regarding offers and acceptance of offers in case of agreements concluded at distance are applicable. (4) Effects of the agreement The individual labour contract is terminated on the date agreed by the parties. In case the parties did not specify the date the contract is terminated, the effects of the contract cease on the date the parties reached the agreement on the termination of employment relationship. If the parties agree that the contract is terminated on a date that is ulterior to the moment they reached the agreement on contract s termination the contract will continue to produce its effects until that date. However, it was unanimously agreed that in such cases the open-ended individual labour contracts do not become fixed term individual labour contracts. 9

10 In case of termination of employment relationship by mutual agreement of the parties, under the Romanian legislation there is no entitlement to severance payments unless agreed by the parties within the applicable labour collective agreements, individual labour contracts or employment termination agreements. The employee is not entitled to unemployment benefits granted by the unemployment insurance system. Termination of employment relationship by mutual agreement of the parties does not affect the rights the employees have within the retirement pension systems or sickness insurance systems. (5) Vitiating factors, remedies The Romanian labour legislation does not provide specific vitiating factors or remedies in case any of the parties of the individual labour contract thinks that the agreement on employment termination has been concluded by breaching the imperative legal provisions. The general rules of civil law are applicable. The interested party may claim in front of the court for labour and social affairs his/her consent has been vitiated. The trade union may act on the behalf of the employee, unless the employee either opposes or renounces. In such cases, the trade union does not need a power-of-attorney. The burden of proof rests with the employer. (6) Penalties The Romanian labour legislation does not stipulate penalties for the breach of the rules on termination of employment relationship by mutual agreement of the parties. (7) Collective agreements Labour collective agreements generally do not contain clauses referring to the termination of employment relationship by mutual agreement of the parties. (8) Relations to other forms of termination Under the Romanian legislation there is a very clear distinction between termination of employment relationship by mutual agreement of the parties and employees dismissal or resignation. 10

11 IV. Termination of employment relationship otherwise than at the wish of the parties de jure termination of the individual labour contract (1) Evolution of legislation Termination of employment relationship independent of the wish of the parties (de jure), was expressly regulated for the first time in the Romanian legislation as a distinct modality of individual labour contract s termination by the Romanian Labour Code in force Law no. 53/2003. Some of the cases expressly listed by the Labour Code in force as cases of de jure termination of the employment relationship were regulated by the previous Labour Code as cases of dismissal of employees. In these cases the employer was obliged to dismiss the employees (e.g. in case it was forbidden to the employee to perform his job or profession by the decision of the competent law court). Thus, the termination of the employment relationship was independent of the wish of the parties and contravened to the notion of dismissal. The most part of the cases expressly listed by the Labour Code in force as cases of de jure termination of the employment relationship were not regulated by the previous Labour Code. However, some of them were appreciated as being cases when the employer could dispose employees dismissal on grounds of employees non-professionally fit (e.g. withdrawal of any authorisation that was necessary for the conclusion of the labour contract). Such interpretation was given under the conditions imposed by the previous legislation stipulating only cases of labour relationship termination by mutual agreement or at the wish of one contractual party. Some other cases of employment relationship termination that were not expressly regulated by the previous Labour Code could not be appreciated as being included in one of the dismissal cases provided. In the context of the previous Labour Code, the principle that the termination of employment relationships can take place only in those cases expressly provided by the law was applicable. However, although such cases were not provided by the labour legislation, the doctrine and jurisprudence appreciated them as inevitable cases of employment relationships termination (e.g. since the labour contract has an intuituu personae character it ends at the moment of the contractual party s death; the employment relationships also ends at the expiration of contract s duration). Under these circumstances, it was obvious that the express regulation of the cases when termination of employment relationship takes place otherwise than at the wish of the parties was necessary. The discussions and opinions developed by doctrine and jurisprudence were taken into account in elaborating the new Romanian Labour Code Law no. 53/2003. Thus, article 56 of the Labour Code in force stipulates at present all the cases when the individual labour contract is de jure terminated. (2) Cases/grounds of de jure termination According to article 56 of the Romanian Labour Code, the individual labour contract is de jure terminated: a) on the date of the death of the employee or employer, if he/she is a natural person; 11

12 b) on the date a final judgment is delivered, declaring the death or placing under interdiction of the employee or of the employer, if he/she is a natural person, and if this causes the business liquidation; c) as a result of the dissolution of the employer, if this is a legal entity, from the date the legal entity ceases to exist; d) on the date the decision of retirement for age limit, anticipated retirement, partially anticipated retirement or retirement for disability of the employee is communicated, according to the law; e) as a result of finding the absolute nullity of the individual labour contract, from the date the nullity was found based on the parties consent, or a final judgment; f) as a result of the admittance of the petition for reinstating in the position occupied by the employee a person dismissed unlawfully or for ill-founded grounds, from the date the final judgment is delivered; g) as a result of a sentence to execute an imprisonment punishment, from the date the final judgement is delivered; h) from the date of withdrawal, by the competent authorities or bodies, of the approvals, authorisations, or certifications necessary for exercising one s profession; i) as a result of the interdiction to exercise a profession or to perform a job, as a safety measure or complementary punishment, from the date the final judgment ordering the interdiction was delivered; j) on the expiry of the deadline of the individual labour contract concluded for a definite term; k) from the date of withdrawal of the parents or legal representatives consent, for employees whose ages range between 15 and 16 years Death of employee or death of employer, if he/she is a natural person Since the individual labour contract has an intuituu personae character, the rights and obligations of the individual person employer or employee cannot be transferred to his/her successors. Thus, article 56 a) of the Labour Code stipulates that the labour contract is de jure terminated on the date of the death of the employee or employer, if he/she is a natural person, independently of the wish of any contractual party Declaring the death or placing under interdiction of the employee or of the employer, if he/she is a natural person, by final judgement of a law court According to article 56 b) of the Labour Code, the individual labour contract is de jure terminated on the date a final judgement is delivered, declaring the death or placing under interdiction of the employee or of the employer, if he/she is a natural person, and if this causes the business liquidation. Termination of the labour contract in case of declaring contractual party s death is grounded on the above-mentioned arguments justifying contract s termination in case of the death of the employee or employer, if he/she is a natural person. On the other side, in case of declaring contractual party s interdiction by final judgement of a law court, such party does not accomplish anymore the condition to have legal capacity (capacity to exercise his/her rights). Since according to the rules of civil law during the entire period the contract is in force any of the contractual parties must have the capacity to exercise his/her rights, the contract must be terminated if this condition is not accomplished anymore 9. 9 The occurrence of a final judgement, declaring the death or placing under interdiction of the employee or of the employer, if he/she is a natural person, may not cause the liquidation of a business if the employer concluded the 12

13 This provision is in conformity with article 13 (4) of the Labour Code stating that employment of persons placed under court interdiction is prohibited. As well, according to article 14 (3) of the Labour Code, a natural person can conclude individual labour contracts, as an employer, after having acquired the capacity to exercise his/her rights Dissolution of the employer who is a legal entity Article 56 c) of the Labour Code regulates the de jure termination of the individual labour contract as a result of the dissolution of the employer, if this is a legal entity, from the date the legal entity ceases to exist. Under the Romanian legislation the decision of a company dissolution may be followed either by a liquidation of its patrimony or by a reorganisation, modification of the company. In case of dissolution followed by liquidation of patrimony the employees are protected the contracts being terminated de jure only from the date the legal entity ceases to exist. If the decision of dissolution is followed by a modification of the company and the company preserves its legal personality, the labour contracts will not be terminated de jure. Moreover, in case the company will be subjected to a reorganisation (division, merger) and will cease to exist as a legal entity, the employees are protected by the provisions of article 169 and 170 of the Labour Code stating that the employees shall benefit from the protection of their rights in the event of a transfer of the company, of the unit, or of parts thereof to another employer. In such situations the transferor s rights and obligations, which derive from a labour contract or relationship existing on the date of the transfer, shall be fully transferred to the transferee. However, if the decision of dissolution has been issued but the company did not cease to exist as a legal entity, so that the labour contract cannot be yet terminated de jure, the termination of the contract is possible by employee s resignation or employer s decision of dismissal in case the dismissal conditions are met (e.g. the employee is found guilty for the company s bankruptcy) Communication of employee s retirement decision According to article 56 d) of the Labour Code, as modified by Governmental Emergency Ordinance no. 65/2005 approved by Law no. 371/2005, the individual labour contract is de jure terminated on the date the decision of retirement for age limit, anticipated retirement, partially anticipated retirement or retirement for disability of the employee is communicated, according to the law. Retirement for age limit is granted to any natural person insured in the public system of pensions in case he/she cumulatively accomplishes the conditions of retirement age and minimum contributory period in the public system. Articles 41 to 48 and Annexes of the Law no. 19/2000 on the public system of pensions and other social insurance rights mention these conditions. The standard pension age is 60 years for women and 65 years for men and the minimum contributory period is 15 years, both for women and men 10. labour contract as representative of a family association. The family associations are not considered as legal entities by the legislation in force. 10 The increase of the standard pension age from 57 years for women and 62 years for men to 60 years for women and 65 years for men, and the increase of minimum contributory period from 10 years to15 years takes place in 13 years 13

14 Anticipated retirement may be accessed with maximum 5 years before reaching the standard pension-age by any natural person insured in the public system of pensions if he/she exceeded the full contributory period with at least 10 years. The full contributory period is 30 years for women and 35 years for men 11. Partially anticipated retirement may be accessed with maximum 5 years before reaching the standard pension-age by any natural person insured in the public system of pensions if he/she has completed the full contributory period or exceeded the full contributory period with less than 10 years. Disability retirement is granted to any natural person insured in the public system of pensions in case he/she has lost, totally or at least half of his/her work-capacity, because of work accidents, professional diseases and tuberculosis, ordinary diseases and accidents unrelated to work. Any such person may apply for the disability retirement if he/she has completed the necessary contributory period in the public system, as provided by the law, or at least half of this period. Possibility to conclude a new labour contract. According to the Labour Code s provisions, in case the decision of retirement for age limit, anticipated retirement, partially anticipated retirement or retirement for disability of the employee is communicated the termination of employment relationship cannot be avoided. The individual labour contract is de jure terminated on the date the decision of retirement is communicated and the employer can only acknowledge such termination. However, even if the employment relationship is terminated, in some cases the retiree (pensioner) may conclude a new labour contract. Thus, in conformity with Law no. 19/2000, from among the retired persons only those retired for age limit or for 3 rd degree disability may conclude an individual labour contract with the same employer or with another employer 12. In such a case, the labour contract may be, according to the rule stipulated by the Labour Code, an open-ended contract. However, following the amendment of the Labour Code by Governmental Emergency Ordinance no. 65/2005 approved by Law no. 371/2005, the employment of retirees represents one of the exceptional situations when the labour contract may be concluded on a fixed term period. Thus, the labour contract of the retiree may also be concluded on a fixed term period not exceeding 24 months, under the conditions listed by articles 80 to 86 of the Labour Code in force Acknowledgement of the absolute nullity of the individual labour contract from the date when Law no. 19/2000 entered into force (April 2001), according to the provisions of the Annexes. The Law also provides exceptional cases of retirement for age limit for those insured persons performing activity in outstanding work conditions or special work conditions as stipulated by the law. 11 This full contributory period is to be achieved within 13 years from the date Law no. 19/2000 entered into force, by its increasing from 25 years for women and 30 years for men, in accordance with the provisions of the Annexes. 12 The law classifies disability as follows: a) 1 st degree disability - total loss of work-capacity, self-service ability requiring assistance or permanent surveillance by another person; b) 2 nd degree disability - total work-capacity loss, self-service ability without another person s help; c) 3 rd degree disability - loss of minimum half the work-capacity, the disabled person being still able to work. 14

15 Article 56 e) of the Labour Code settles de jure termination of the individual labour contract as a result of acknowledgement of the absolute nullity of such individual labour contract, from the date the nullity was acknowledged based on the parties' consent, or a final judgement. According to the Labour Code, the failure to comply with any of the necessary lawful conditions for the valid conclusion of the individual labour contract entails its nullity. The nullity of the individual labour contract can be removed by the subsequent observance of the conditions imposed by the law. The acknowledgement of the nullity of the individual labour contract cannot be the result of the will of only one of the contractual parties. According to the Labour Code, the acknowledgement of nullity and setting up of the effects thereof can be done by consent of the parties. If the parties do not reach to an agreement, the nullity shall be acknowledged by judgement of a law court. According to the Labour Code, the acknowledgement of the nullity of the individual labour contract shall have effects in the future. By consequent, the law expressly settles that a person who has worked within a null individual labour contract is entitled to its payment in relation to the way in which job assignments have been accomplished. This rule is characteristic for all the contracts that determine more than one successive performance acts or deeds. This is the main argument that determined the option of the legislator to provide for the termination of employment relationship in case of acknowledgement of the absolute nullity of the individual labour contract. However, the individual labour contract is terminated only in case it is affected by total nullity. If only a clause is vitiated by nullity, since it establishes rights or obligations for the employees, which contravene to some imperative lawful norms or applicable collective labour contracts, and it has been acknowledged the nullity of such clause according to the Labour Code, this clause shall be replaced de jure by the applicable lawful or conventional provisions, and the employee shall be entitled to damages Reinstatement in the position occupied by the employee of the person who was previously dismissed from the same position unlawfully or for ill-founded grounds In case a law court would admit by final judgement the petition for reinstating in the position occupied by the employee a person dismissed unlawfully or for ill-founded grounds the employer could be in a difficult situation in the absence of an express provision on the termination of employment relationship being obliged at the same time to observe both the court s final judgement to reinstate the person previously dismissed and the individual labour contract of the employee hired on the same position. However, practically it is not possible two distinct persons to be employed on the same position. Since both former employee and present employee have no guilt in the occurrence of this situation, the legislator had to choose to protect the interests of only one of them taking into account the position of the employer. Thus, if the person protected was the present employee, the employer could get rid of any of his employees by unlawful or ill-founded dismissal having subsequently employed another person on the same position. By consequent, in order to protect employees from unlawful or ill-founded dismissals, the legislator chose to protect the person dismissed unlawfully or for ill-founded grounds stating by 15

16 article 56 f) of the Labour Code that in case a law court admits by final judgement the petition for reinstating such an employee, the individual labour contract of the employee subsequently employed on the same position is de jure terminated on the date the final judgment is delivered. All the difficulties noticed by the doctrine and jurisprudence related to the interpretation and application of such a provision have been taken into account on the elaboration of the Labour Code in force. Thus, under the previous Labour Code, the law court was obliged to reinstate the employees in case of acknowledging they were unlawfully dismissed or for ill-founded grounds, independently whether or not such employees asked for reinstatement. In this context, in order to protect the interests of the person subsequently employed on the same position, the doctrine and jurisprudence appreciated that such employee could be dismissed only following the former employee s express request to be reinstated. At present, according to the new Labour Code, in case the law court acknowledges the employee was unlawfully dismissed or for ill-founded grounds it may reinstate the employee only if he/she expressly requests so. As a conclusion, according to the Labour Code in force, the individual labour contract is de jure terminated, independently of any contractual party s will, only in case the following conditions are cumulatively accomplished: a) employment relationship between the plaintiff and the employer were terminated by unlawful or ill-founded dismissal his/her position becoming a vacant position; b) another person was subsequently employed on the same position; c) the plaintiff requests for both the acknowledgement of the nullity of the dismissal decision and his/her reinstatement; d) the petition for reinstating is admitted by final judgment of the competent law court The employee is sentenced to serve a custodial penalty According to article 56 g) of the Labour Code, the individual labour contract is de jure terminated as a result of a sentence to serve a custodial penalty, from the date the final judgment is delivered Withdrawal of the approvals, authorisations, or certifications necessary for exercising one's profession Article 56 h) of the Labour Code stipulates that the individual labour contract is de jure terminated from the date of withdrawal, by the competent authorities or bodies, of the approvals, authorisations, or certifications necessary for exercising one's profession. The individual labour contract cannot produce its effects if any of the conditions provided by the law for exercising one's profession are not accomplished anymore. Under the previous Labour Code this case of termination of employment relationship was not expressly provided. However, the doctrine and jurisprudence constantly appreciated that in such situation the employees could have been dismissed on grounds of non-professionally fit. The lacunae of the previous legislation were taken into account in the elaboration of the Labour Code in force. De jure termination of the individual labour contract, independently of any contractual party is more justified in the situation of withdrawal, by the competent authorities or bodies, of the approvals, authorisations, or certifications necessary for exercising one's profession. 16

17 2.9. Interdiction to exercise a profession or to perform a job The individual labour contract is de jure terminated under article 56 i) of the Labour Code as a result of the interdiction to exercise a profession or to perform a job, as a safety measure or complementary punishment, from the date the final judgment ordering the interdiction was delivered. Independently of any of the contractual parties will, the individual labour contract cannot produce its effects if the employee exercised a profession or performed a job and it was delivered a final judgement ordering the interdiction to exercise that profession or to perform that job. The observance of the final judgement is compulsory Expiry of the duration of the individual labour contract concluded for a fixed term This situation of termination of employment relationship was also provided by the previous Labour Code. However, the expiry of the duration of the individual labour contract was the only termination modality distinct from dismissal, resignation and mutual agreement of the parties and it was not expressly identified as determining de jure termination of employment relationship. At present, according to article 56 j) of the Labour Code, the individual labour contract concluded for a fixed term is de jure terminated on the expiry of the fixed term it was concluded for. The individual labour contract concluded for a fixed term may be terminated before expiry of its duration by occurrence of other situations expressly provided by the Labour Code (de jure termination, resignation, dismissal, mutual agreement of the parties). In case following the date of expiry of the duration of the individual labour contract concluded for a fixed term the parties continue to fulfil their contractual obligations, it is assumed that they concluded another individual labour contract. According to the Labour Code rules, this new contract concluded by tacit mutual agreement is and open-ended individual labour contract. However, it is necessary that parties tacit mutual agreement to be unambiguous in what concerns the conclusion of a new contract. Thus, it could not be assumed the conclusion of a new contract in case parties activities performed after expiry of contract s duration could be related to their obligations to deliver job reports, tools, and other means or, by case, owed payments Withdrawal of the parents or legal representatives consent The parents or legal representatives consent is compulsory for the conclusion of an individual labour contract in case of employment of a teenager who is 15 to 16 years old. This condition aims teenagers protection. Under the previous Labour Code, the withdrawal of the parents or legal representatives consent, for employees whose ages range between 15 and 16 years, was not expressly provided among the situations of termination of employment relationship. However, the doctrine and jurisprudence appreciated that in such cases the individual labour contract is terminated. Following this general opinion, article 56 k) of the Labour Code in force stipulates that the individual labour contract is de jure terminated from the date of withdrawal of the parents or legal representatives consent, for employees whose ages range between 15 and 16 years. 17

18 (3) Procedural requirements In case the individual labour contract is de jure terminated, the Romanian legislation does not impose to the employer to observe any procedural requirements. There are no specific rules concerning a written document issued by the employer, the form and content of such a document. However, it is recommended for the employer to issue a written document ascertaining the occurrence of one of the situations listed by article 56 of the Labour Code and, by consequent, the de jure termination of the individual labour contract. In case the individual labour contract of the employee is de jure terminated on the date a final judgement of a law court is delivered admitting the petition for reinstating an employee who being employed on the same position was previously dismissed unlawfully or for ill-founded grounds, the employer is obliged to offer to the employee whose individual labour contract is terminated a vacant position in the company, consistent with his/her professional training, under article 64 of the Labour Code. If there is a vacant position in the company consistent with the employee s professional training, the employer is obliged to offer it to the employee. The employer s obligation to offer to the employee a vacant position in the company arises on the date the employment relationship is terminated. Non-observance of this obligation does not have any consequence on the termination of the employment relationship. However, the employee may ask the law court to oblige the employee to observe such obligation. The employee has at his/her disposal a period of 3 working days from the employer's communication to state in writing his/her consent concerning the new job offered. If the employee accepts the employer s offer within the term stipulated a new labour contract is concluded between the employer and the employee. If the employer has no vacant positions in the company consistent with employee s professional training, he is obliged to ask the territorial employment agency for support in the redeployment of the employee according to his/her professional training. (4) Effects of the existence of a ground of de jure termination of employment relationship In case of occurrence of one of the situations/grounds listed by article 56 of the Labour Code, the individual labour contract is terminated on the date mentioned by this provision. In case of de jure termination of employment relationship by mutual agreement of the parties, under the Romanian legislation there is no entitlement to severance payments unless agreed by the parties within the applicable labour collective agreements, individual labour contracts or agreements concluded on the occasion of employment termination. The employee is entitled to unemployment benefits granted by the unemployment insurance system in case the employment relationship is de jure terminated for the reasons stipulated by article 56 letters a), b), c), e), f), h) and j) of the Labour Code (death of the employee or employer, if he/she is a natural person; declaration by a final judgement of the death or placing under interdiction of the employee or of the employer, if he/she is a natural person; dissolution of the employer, if this is a legal entity; finding the absolute nullity of the individual labour contract; admittance of the petition for reinstating in the position occupied by the employee a 18

19 person dismissed unlawfully or for ill-founded grounds; withdrawal, by the competent authorities or bodies, of the approvals, authorisations, or certifications necessary for exercising one's profession; expiry of the deadline of the individual labour contract concluded for a definite term). Termination of employment relationship by mutual agreement of the parties does not affect the rights the employees have within the retirement pension systems or sickness insurance systems. The retirement of an employee (communication of employee s retirement decision) represents one of the reasons of de jure termination of employment relationship. (5) Remedies The Romanian labour legislation does not provide specific remedies in case any of the parties of the individual labour contract thinks that the employment relationship was not de jure terminated. The general rules of civil law and civil procedure law are applicable. Any of the parties may claim his/her rights in front of the law court for labour and social affairs. The trade union may act on the behalf of the employee on grounds of the special provisions of Law on trade unions no. 54/2003, unless the employee either opposes or renounces. In such cases, the trade union does not need a power-of-attorney. The burden of proof rests with the employer. (6) Penalties The Romanian labour legislation does not stipulate penalties for the breach of the legal provisions on de jure termination of employment relationship. (7) Collective agreements Labour collective agreements generally do not contain clauses referring to the de jure termination of employment relationship. 19

20 V. Termination of employment relationship by employer s initiative - dismissal 1. Evolution of legislation The most part of the previous Labour Code and legislation in the area of employees dismissal have been overtaken by the present Labour Code. However, the reasons of dismissal are fewer. Some of the dismissal reasons provided by the previous Labour Code determine at present de jure termination of employment relationship while some other cases are not mentioned anymore by the present Labour Code. Thus, the present legislation has been adapted to the Romanian economic and social reality, some recommendations made by the doctrine being also taken into account. In the same time, the dismissal conditions became more burdening for the employers. In this context, although the decision to dismiss an employee is well-grounded, the dismissal decision is null and void if the employer does not observe any of the procedural requirements such as mentioning within the written decision of dismissal the duration of the notice period, details about the period within which it can be contested or the law court where the complaint must be lodged. Taking into account the necessity to strike a balance between flexibility for undertakings and security for workers, as well as the difficulties of interpretation, some amendments have been recently brought to the Labour Code: the procedure of collective dismissals was simplified, the disciplinary inquiry procedure was replaced with the procedure of evaluation in case of employee s dismissal for being professionally unfit, the procedure of employee s dismissal during the probationary period was also simplified, etc. 2. Overview of the legislation in force According article 58 of the Labour Code, the dismissal represents the termination of the individual labour contract on the employer s initiative. Under the Romanian labour legislation in force, the wish of the employer is not sufficient in itself to justify dismissal. The dismissal is permitted only in the situations (grounded on the reasons) expressly listed by the Labour Code and with the observance of the dismissal procedure and formalities stipulated by the Labour Code. The dismissal decision must be well grounded. Dismissal for certain grounds is prohibited. Moreover, the dismissal is temporarily prohibited if the employee is in one of the situations listed by the Labour Code. Under the Labour Code s conditions, the dismissal can be ordered for reasons related to the employee s person or for reasons which are not related to the employee s person. This classification of dismissal grounds does not correspond to the classification made by the doctrine and jurisprudence into reasons that can be imputed to the employee and reasons that cannot be imputed to the employee. Dismissal reasons that are related to the employee s person may be reasons that can be imputed to the employee (disciplinary reasons) or reasons that cannot be imputed to the employee (non-professionally fit). Dismissal reasons that are not related to the employee s person are always reasons that cannot be imputed to the employee. However, the 20