Grounds for Termination
Under Romanian law, the employment contract may terminate de jure, by mutual consent or by notice given by one of the two parties. The grounds for dismissal must be real and serious and there are two types of valid grounds: Objective grounds and Economic grounds.
When the employer intends a collective redundancy, it shall initiate, in reasonable time and with a view to reaching an agreement, under the terms provided by the law, consultations with the trade union or, as the case may be, with the representatives of the employees, in an effort to avoid the dismissals, or to reduce the number of dismissed employees, whenever possible.
In all cases, the employer must issue the dismissal decision within 30 calendar days from the date the employer acknowledged the cause of the dismissal, in addition to complying with the specific procedural requirements as defined in the Labour Code.
Is severance pay required?
Severance pay for individual dismissals is to be paid only if it is agreed as such in the individual or collective employment agreement. The only time that the Labour Code states that a severance payment (not specifying the amount) should be negotiated is for physical and/or mental unfitness to perform the activity required by the job description. The Labour Code only states that such compensation should be negotiated in the collective employment agreements, meaning that in the absence of such an agreement, the employer cannot be made to pay the employee any amount upon his termination.
Is a Separation Agreement required or considered best practice?
A separation agreement is neither required nor considered best practice in Romania.
Remedies for employee seeking to challenge wrongful termination
The employees seeking to challenge wrongful termination can file a claim in court against the employer. If the Tribunal finds that the dismissal decision is not legal or has no grounds (this being a rarer motif for the annulment of the dismissal decision), a court ruling annulling the dismissal decision is issued. The employee will be reinstated (automatically if he/she asked to be reinstated and the dismissal was found illegal or without grounds) and is entitled to payment of all financial rights he/she would have obtained if he/she were not wrongfully dismissed.
Only whistleblowing within public institutions, and the protection of employees and public servants in public institutions, is legally regulated in Romania. The whistleblower has to act in good faith and for the general interest in order to be protected. For the private sector, customary rules have to be used when considering the protection of an employee in whistleblowing cases.