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. The dismissal for economic grounds may be individual or collective. A dismissal for reasons not related to the person of the employee, is the termination of the individual employment contract determined by the cancellation of the employee’s position, for one or several reasons, which are not connected to the employee’s person. The cancellation of the position must be effective and have a real and serious cause.
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.
For the objective grounds dismissal, the employer must respect the specific procedure stipulated by the Labour Code. In case of dismissal for disciplinary reasons, the employer must follow the preliminary investigation, in order to establish the breach of the employment contract’s provisions or of the internal regulations. In case of dismissal for poor performance, the employer must first establish the grounds by the evaluation procedure. 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.
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.
A separation agreement is neither required nor considered best practice in Romania. The age of the employee usually does not affect the working relationship, apart from the case of reaching the legal pension age, when the individual employment agreement ends de jure, if the employee does not request to continue his/her employment and/or the employer does not agree to the continuation. Employers cannot restrict the right of women who have reached the standard retirement age for women, to continue their employment until they reach the standard retirement age for men (the process of equalising the retirement age for men and women is ongoing). Employees 18 years of age or younger, can enter into a separation agreement under the same set of rules used to enter into a legally enforceable employment contract, e.g. if the employee is younger than 16, parental consent is needed.
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.