Part V

End of the Employment Contract

1.

JOB SECURITY IN ROMANIAN LAW

The previous LC of 1972 was adopted at the time of a regime in which, within labour legal
relations, the employer was virtually always a state enterprise. Protecting the employee in relation
to the employer meant, in fact, protecting the individual from the state. This is one of the reasons
the jurists were unanimous in restrictively configuring the regime of dismissal.
On the other hand, the communist labour legislation did not even allow the individual to freely
move from one state enterprise to another.
Though formally stipulated by law, resignation was rare, being considered rather reprehensible
and leading to the loss of certain rights, as a consequence of discontinuing the length of service.
Unemployment was out of the question and each person had a certain guaranteed job. Graduates
of higher education were obliged to receive employment in the enterprises assigned to them, often
far away from home.
As compared to the full guarantee of the work place that the communist laws ensured, the LC of
2003 could not bring about a complete flexibilization, since workers still expected or demanded
the same level of stability. On the contrary, under the pressure of trade unions, but also of general
public opinion, whose expectations continued to stay high, the Code maintained a whole series of
restrictions concerning dismissals, as well as the complete and express regulation of the reasons
for which an employee can be dismissed.
The 2011 LC, against the background of difficulties caused by the economic crisis, partially
changed this perspective by simplifying (as expression of flexicurity principles) the hiring and
dismissal procedures.
Resignation is, however, fully liberalized, triggering no negative consequences whatsoever for the
employee.

2.

TERMINATION OF THE CONTRACT BY MUTUAL CONSENT

Regarding the termination of the contract by mutual consent, the LC does not contain any special
requirements. In order to establish the requirements for concluding such an agreement and its
effects, the general rules of common law are to be applied.

Thus, the consent of the parties regarding the termination of the contract is a contract in itself,
which has to comply with all the rules of the contract law. It represents the meeting between the
offer from one of the parties and acceptance from the other.
From this point of view, one has to distinguish between the employees offer to terminate the
contract by mutual consent and his resignation. The offer can be revoked, unless it has been
accepted by the employer, according to the rules of common law. Resignation, on the other hand,
does not need to be accepted, triggering irrevocable effects starting with the date when notice has
been submitted. As such, the parties mutual consent regarding the termination of the labour
contract is not to be mistaken for the agreement between the two, whereby the employer
renounces the notice the resigning employee owes him. As a consequence, the employers
renouncing of the notice (fully or partially) does not change a resignation case into a termination
of the labour contract by mutual consent.
The employees consent is not considered invalidated if the offer to terminate the contract,
formulated by the employer, was made as an alternative to dismissal. Indeed, consent is vitiated
when it has been obtained by duress of such a nature as to cause a reasonable fear of unjust and
considerable injury to a partys person, property, or reputation. As a result, a threat is not
considered a vice of consent, as long as it is not unjust. A threat to take lawful action is no doubt a
manner of exerting constraint upon the will of the party to whom the threat is addressed, but such
constraint is lawful if it results from the exercise of another partys right, or from another partys
attempt to protect a legitimate interest.
Thus, in situations where the workers will is constrained as a result of the lawful act of the
employer there is no duress as a vice of consent. When the employer threatens to do what he has a
right to do, e.g. to dismiss the employee, the latter thus threatened cannot claim the vitiating of
the consent.
The consent of the parties regarding the termination of the labour contract:

will mention the exact time when the labour relation terminates;

will contain other elements as well, such as regulating the regime of the lodgings;
the payment of compensation to the employee when the contract terminates; the
date of releasing all the papers to the employee, etc.;

can also contain a clause regarding non-competition.

3.

TERMINATION DE JURE

I.

Death of the Employee or of the Employer Physical Person, or Dissolution of

the Employer Legal Person

The employment contract is concluded intuitu personae, which makes its effects cease
automatically when the employee dies. Indeed, a contract is said to be intuitu personae when it is
entered into in consideration of the person of the co-contracting party, i.e. where such
consideration is essential for the contract. The very substance of the employment contract
depends on the workers personal qualities; if he dies, the contract is automatically terminated.
For reasons of symmetry, in case of death of the employer natural person the employment
contract is also automatically terminated.
The dissolution of the employer legal person entails the termination de jure of the labour
agreements.
Indeed, in the view of the Romanian law-makers, unlike dismissal, the termination de jure of the
individual labour contract implies that, without any party having expressed intention to terminate
the labour relation, and sometimes even against such intention, the contract cannot continue since
a circumstance occurred where the law provides the automatic termination of the juridical
relation. Dissolution or death are indeed such circumstances where the labour agreement can no
longer continue because of objective reasons that do not depend on the parties.
Following the fact that the labour contract ends de jure, the collective dismissal procedure shall
not apply; the employees do not enjoy informing or consultation that are typical of this procedure,
and the local employment agency is not notified.1

1. Here, we have a problem of correspondence with the provisions of the Directive 98/59/CE on collective
dismissal, as interpreted in the Claes case (C-235/10), of 3 March 2011, by the EU Court of Justice. In the
solution given, the EU Court of Justice interpreted the provisions of the Directive 98/59/CE showing that
before the termination of the legal personality of an entity in relation to which dissolution and liquidation
are enforced, the obligations deriving from art. 2 and 3 in Directive 98/59 shall apply. Articles 1 to 3 of
Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States
relating to collective redundancies must be interpreted as applying to a termination of the activities of an
employing establishment as a result of a judicial decision ordering its dissolution and winding up on
grounds of insolvency, even though, in the event of such a termination, national legislation provides for the
termination of employment contracts with immediate effect.

II.

The Disappearance or the Interdiction of the Employee or of the Physical Person

Employer
The same regulation may be found in the case of disappearance of the natural person; the law
stipulates the procedure for legally declaring death.
The employment contract also terminates de jure if the employee is declared legally incompetent.
Indeed, according to Article 13, paragraph 4 of the LC, it is forbidden to employ persons that
have been declared legally incompetent. Normally, if the legal declaration of incompetence
occurs during the fulfilment of the contract, it will automatically trigger the termination of the
contract, as the labour contract presupposes the employees full mental capacity.

III.

Retirement

Regarding retirement, the law-maker modifies for the fourth time the moment when the labour
agreement ends, hesitating between the time when the retirement requirements are met and the
time when the retirement decision is sent.
At present, the termination of the labour contract takes place automatically upon the date when
the requirements regarding standard age and the minimum amount of contributions paid for the
pension are met. Whereas, in case of medical retirement, the time when the labour contract ends
is the time when the retirement decision is sent by the local pension authority.
On the other hand, the matter itself of the automatic termination of the labour contract upon the
date when the person turns the retirement age can be debatable because of the interdiction of
discrimination on grounds of age stipulated by the Directive 2000/78/CE for the creation of a
general framework in favour of equal opportunities regarding hiring and employment.
Invalidity retirement occurs when all or at least half of working abilities are lost due to labour
accidents, occupational diseases, TB, common diseases or accidents that are not related to work.
According to the requirements of the work place and the level of the reduced working ability,
invalidity is:

first degree, characterized by total loss of working abilities, of self-service, of

self-control or spatial orientation abilities, the invalid needing care or permanent
supervision by another person;

second degree, characterized by the total loss of the working abilities, the invalid
having still the capacity of self-service, self-control and spatial orientation,
without needing help from another person;

third degree, characterized by the loss of at least half of the working abilities.

Of all three degrees of invalidity, only the first two lead to incompatibility between the status of a
pensioner and that of an employee. A third degree invalidity pensioner is allowed to add his
pension with the salary, continuing his activity either in the same work place, or in another. In all
cases, however, including under third degree invalidity, the labour contract will be automatically
terminated. The employer will later have the possibility of concluding a new labour contract with
the employee who has become pensioner for third degree invalidity.
While in private sector it is still possible to cumulate pensions with salaries, in public sector a
restriction has been adopted. Law 329/2009 regarding reorganization of some public authorities
and institutions, streamlining of public expenditure, business support and compliance with
framework agreements with the European Commission and International Monetary Fund 2
stipulated that beneficiaries of pensions who, in the same time, work under employment contracts
concluded with public institutions, can cumulate the net pension with the income thus earned only
if the pension does not exceed the gross average salary per economy used to estimate the budget
for public social insurance and approved by the Law of the public social insurance.
The employer shall take all necessary measures to identify cases when pensions cannot be
cumulated with salaries. Failure of the employer to comply with this provision shall be
considered an infringement and sanctioned with fine.

IV.

The Nullity of the Employment Contract

The nullity of the employment contract is presently regulated by Article 57 from the LC.
According to this provision:
(1)

The breach of any legal condition required for the valid conclusion of the
individual employment contract shall void it.

(2)

The establishment of the nullity of the individual employment contract shall take
effect for the future.

2. Published in the ROG no. 761 from 9 November 2009.

(3)

The nullity of the individual employment contract may only be covered by the
subsequent fulfilment of the conditions imposed by the law.

(4)

Should a clause be affected by nullity, for having established rights or obligations

for the employees contrary to mandatory statutory provisions or applicable
collective labour agreements, it shall be replaced de jure with the statutory
provisions or the provisions of the collective agreement, and the employee shall
have the right to indemnification.

(5)

A person having carried out an activity under a voided individual employment

contract shall have the right to remuneration, according to the accomplishment of
the duties.

(6)

The establishment of the nullity and, according to the law, of its effects may be
take place by agreement of the parties.

(7)

Should the parties fail to agree, the nullity shall be pronounced in court.

The employment contract terminates when the court decision is final or when the parties give
their willing consent, in case of amiable invalidation. A person carrying out activity on the basis
of the void contract will not be asked to return remuneration paid as wages, as long as he has
fulfilled his job duties.

V.

Reinstatement of the Previous Employee

The employment ends de jure when the demand of reinstatement in the position held by a person
unlawfully or groundlessly dismissed has been admitted, from the date of the final reinstatement
judgment.
This is the situation of an employee illegally dismissed, who brought an action in court not only
to cancel the dismissal, but also for reinstatement in a previous position. If in that particular
position another worker has in the mean time been hired, his employment will be automatically
terminated. This text practically represents an application of the nullity theory. Indeed, the nullity
of the decision to dismiss the first employee represents the cause of termination of the
employment contract of the second one.

Prior to the de jure termination of the employment contract, the employer will have to propose the
employee to be transferred to another job position, if there is such a vacant job position within the
enterprise, compatible with his professional training.
Article 56 letter (e) in the LC had in view the fate of the individual labour contract of the person
hired on the position from which the previous employee had been unlawfully dismissed.
The situtation where the employee that had been unlawfully dismissed contests the dismissal but
he does not submits a request of re-integration was not regulated, until 2011. Obviously, the
labour agreement of the newly hired person shall go on but how will end the labour agreement of
the employee that successfully contested the dismissal in court? Article 80 paragraph (3) in the
2011 LC solves this problem. It stipulates that, if the employee does not request recuperation of
his position held prior to the dismissal, the individual labour contract shall end de jure on the date
when the court decision is final and irrevocable.

VI.

Prison Sentence

The labour contract terminates following the employees conviction to a prison term, from the
date of the final judgment of the court. As a result, there are three possibilities:

the employment contract is suspended from the moment he is under preventive

arrest;

the employee may be dismissed 30 days after the preventive arrest;

if the employer has not ordered dismissal, the contract is terminated de jure when
the court decision of prison sentence becomes final, regardless on the type of
crime committed by the worker.

VII.

Withdrawal of Official Recognition and Legal Authorization

In certain cases, the employment contract can only be fulfilled by persons who have received
official recognition, authorization or attestation for carrying out the respective activity. For
instance, Law no. 333/2003 on guarding objectives, goods, values and on the persons protection, 3
stipulates that:

3. Published in the ROG no. 525 from 22 July 2003, with further amendments.

Employment of the personnel with guarding duties or as bodyguards is made on

the basis of the attestation issued by the police, of the certificate attesting the
graduation of the professional training course, of the certificate of criminal record
and, according to case, of the police gun permit.
Similarly, according to Law no. 126/1995 on the regime of explosives, 4 the conclusion of the
labour contracts for employees working as artificers depends on their professional authorization
issued by the administrative bodies.
Withdrawal of authorization, a permit or attestation will automatically lead to termination of the
employment contract. Such an administrative decision may, however, be contested in court,
according to Law no. 554/2004, on administrative disputes. 5
In case of expiry of the permits, authorizations or certifications needed to exercise the profession,
the labour contract shall be suspended. If, within six months, the employee does not renew his/her
permits, authorizations or certifications needed to exercise ones profession, the individual labour
contract shall end de jure.

VIII.

Contract Termination as Complementary Punishment

A penal court may decide to forbid carrying out ones profession or function as a safety measure
or complementary punishment, if an offence committed by a worker or the manner of committing
it demanded such a solution. The decision of the penal court is based on the evidence that the
defendant has committed an act forbidden by penal law.
It is to be noted here that this cause of termination cannot be invoked in the case of the
employment contracts concluded by minors since, according to the Penal Code, complementary
penalties cannot be applied to minors.

IX.

Expiry

As a rule employment contracts are concluded for an indefinite period of time. By exception, they
can be concluded for a fixed term, in cases expressly stipulated by the LC.
Normally, a fixed-term employment contract cannot be concluded for more than 36 months.
Expiry of the term on which it has been concluded will trigger the de jure termination of the
contract, without the consent of any of the parties being necessary.
4. Republished in the ROG no. 660 from 15 September 2011.
5. Published in the ROG no. 1154 from 7 December 2004, with further amendments.

X.

Withdrawal of the Parents Consent

A natural person can conclude a labour contract as employee when reaching the age of 15, with
the parents agreement or that of the legal representatives (guardians). The provision is adopted in
the application of Article 45, paragraph 4 of the Constitution, according to which minors under
the age of 15 cannot be employed.
The labour contract concluded by the minor aged between 15 and 16 without the consent of the
parents or that of the legal representatives is absolutely void. The nullity is, however, covered by
receiving this consent later. The withdrawal of the parents or the legal representatives consent
before the minors reach the age of 16 triggers the de jure termination of the labour contract.