a. Laws and Guiding Principles
There are no legal provisions that regulate the re-characterization of independent contractors as employees, the individuals that want their activity to be recognized as employment being able to address the court on general procedural rules on the recognition of a state of facts. In order to determine if a contract is an employment contract the courts need to analyze the existence of 3 cumulative criteria – the purpose of the contract is performing work; there is remuneration for the work performed in a form of a salary and the employee is subordinated to the employer during the perform-ing of the activity. The last criteria, is the one that distinguishes between the existence of an employment contract and a civil contract.
b. The Legal Consequences of a Re-Characterisation
As mentioned previously, entering into civil contracts with individuals that are not authorized to perform the activity stated in the contract, or entering into a civil contract with an individual that is authorized, but under similar conditions as an individual employment contract, can be qualified as unlawfully receiving individuals for work, a conduct sanctioned by law.
A legal qualification of a civil contract as being an individual employment contract is usually an attribute of the courts, which are usually referred to by independent contrac-tors that provide activities in conditions similar to an individual employment contract, but do not enjoy specific protection legally recognized for employees. Another situation that may occur is that of questioning the type of contract that exists between the indi-vidual and the beneficiary by the local labor inspection bodies. Following such an inspec-tion, these local bodies can ascertain that the activities provided by the independent contractors are specific to typical work activities performed by employees, without the existence of a legally concluded individual employment contract.
In this case the beneficiary will receive the sanction for unlawfully receiving individuals for work, which is equivalent to a re-characterization of the legal relationship between the parties, but in order to achieve the effects of the recognition of the labour relation-ship between the parties, the court must make a ruling for every individual case. Thus, although the labour inspection bodies ascertain that the activities provided by the inde-pendent contractors are specific to typical work activities performed by employees for the period in which the activities were conducted under a civil contract, the contractors are not automatically granted specific rights of employees and are not provided with specific protections for the employees, unless they obtain a court ruling stating so.
The beneficiary that unlawfully receives individuals for work without perfecting an in-dividual employment contract is sanctioned progressively, his action being a contraven-tion – if the number of individuals he receives for work without perfecting an individual employment contract is under 5, or a criminal offense punishable under the Romanian Labour Code and general rules of criminal law, if the number is higher than 5.
Regarding the activities performed by individuals exercising specific liberal professions, if the re-characterization of their cooperation contracts as individual employment con-tracts by the court is not possible, being the fact that these professionals cannot achieve the employee status.
The differences in legal status between individuals having the employee status and the independent contractor status under the Romanian legislation caused by the under-reg-ulation of civil contracts, under which individual contractors perform their independent activities, can lead to situations in which beneficiaries will use different types of contracts that suit their purposes without a proper protection for the individuals providing the independent activities. In order to avoid this, a better legal frame is needed.
c. Judicial Remedies Available to Persons Seeking ‘Employee’ Status
As stated, the individual seeking the recognition of his employee status needs to address the court in order to achieve this recognition and to benefit from the specific statute of an employee. The court can recognize the employee status even after the contractual agreement, or the performing of the activity has ended, as the Supreme Court stated in a binding general ruling. After the recognition of the employee status, the individual can benefit from special protection specific to employees (for example in case of unfair dismissal) and can claim employee specific entitlements (for example paid vacation periods, or seniority bonuses).
d. Legal or Administrative Penalties or Damages for the Employers in the Event of Re-Characterisation
Apart from the rights that the individual was entitled to as a result of achieving the employee status by the re-characterization of his contractual relationship, he can also claim financial damages if he can prove that by not having the employment relationship being recognized from the beginning of his activity he suffered damages that cannot be covert by any measure and need to be compensated in a financial matter. The individual has to state the amount and prove that the damages are as high as the amount that he claims.