Articles

Collective dismissal procedure

7 July 2005 (Invest Romania)

Following the recent approval by the Romanian Government of the Emergency Ordinance no. 65/2005 (“EGO no. 65/2005” - published in the Official Gazette no. 576 as of July 5th, 2005), a number of amendments have been brought to the Labor Code, including, inter alia, to the collective dismissals framework. Intending to create a more flexible framework for collective layoffs, the EGO no. 65/2005 simplifies the necessary steps and reduces (by nearly 30%) the mandatory delays prescribed by the legislation in force.

Among the changes, it is of use to note that pursuant to art. 68 of the Labor Code, in order to be qualified as a collective dismissal, the layoff should regard a minimum number of 10 employees, in case that the employer has more than 20 employees and less than 100. However, in case of the employers with more than 100 employees, the criteria remained unchanged (respectively dismissal of at least: (i) 10% of the employees, in case of a number of employees between 100 and 299, or (ii) 30 employees, in case of more than 300 persons employed).

The number of the employer’s prior obligations in case of collective dismissal, such as specified by art. 69 of the Labor Code, has been diminished to only 2 (compared to 4 - under the former regulation). As a first duty, the employer has to initiate, in order to reach an agreement, consultations with the union (or, if the case, with the employees’ representatives) concerning the methods and means to avoid collective dismissals or to reduce the number of the employees affected. The consultations should also contemplate potential means to alleviate the social impact by providing aid for the professional re-qualification or re-conversion of the employees sacked.

As a second duty, the employer ought to put at the union’s disposal (in case that an union exist, or at the employees’ representatives disposal) all relevant information in respect of the dismissal, with a view of allowing the union/employees’ representatives to express their own proposals.

According to the new version of art. 70 par. 1 of the Labor Code, the employer must give the union/employees’ representatives written notice (with the observance of legal provisions regulating its content) announcing the intention to operate collective layoffs, at least 30 calendar days before issuing the dismissal decisions. At the same time, the notice must be conveyed to the competent territorial labor authority (inspectorate) as well as to the local agency for employment of labor force.

Furthermore, the union/employees’ representatives may provide at their turn the employer with proposals for the prevention/diminishing of the dismissals within 15 calendar days as of the employer’s notice, to which the employer must answer within 5 calendar days detailing the incident grounds.

It is of note that upon the request of any of the parties, the local labor authority (inspectorate) is authorized to order the postponement of the date when the collective dismissals decisions should be issued for a period of maximum 10 calendar days, in case that the issues related to the collective layoff cannot be solved within the 30-day period specified by art. 70 par. 1 above-mentioned.

According to art. 72 of the Labor Code, the employer operating collective dismissals may not hire new employees for the same positions as those held by the employees sacked for a period of 9 months. However, in case that during such period, the employer resumes the activities of which shutdown determined the collective discharge, a written announcement should be sent to the employees dismissed, offering them to be hired for the same positions as previously held, without examination or test period. The former employees announced are entitled, according to the law, to express their assent as regards the position offered within 10 days.

As a final remark, it is of note that if compared with the former regulation, the new enactment has not promoted critical amendments to the collective layoff framework. Wishing to bring more flexibility on the labor market, preserving also the contextual harmony between the social partners (unions and employers), the Government embraced the lenient solution to focus on fine-tuning of the existing layoff procedure.