2016/2017

Professor Luminita Dima

Labour Law
Course notes for the students of CLOE Master program

The labour relationship between the employer and the employee is governed by the
Romanian Labour Code, the applicable collective labour contracts and the individual
employment agreement. The collective labour contracts may be concluded at sector of
activity level, group of companies level and company level. Such contracts usually grant
rights in addition to those stated by the law and provide for rights and obligations
customized to the specifics of the company (object of activity, working conditions, etc.).
The individual employment agreements regulate the employment relationship of a
specific employee.

Collective labour contracts concluded at sector of activity level are mandatory for all
employers within the respective sector of activity who are part of the employers
organisations, signatories of the respective collective labour agreement.

1. Conclusion (signing) of employment agreements

An individual employment agreement shall be a contract based on which a natural

person, called employee, undertakes to perform work for and under the authority of an
employer, who is a natural or legal person, in exchange for a pay, called salary.

The clauses of the individual employment agreement may not contain provisions contrary
to or rights below the minimum level set up by the laws or applicable collective labour
contracts.

1.1. Types of employment agreements

According to current Romanian legislation, there are two types of employment

agreements: indefinite-term agreements and fixed-term agreements. Both indefinite-term
and fixed-term employment agreements may be concluded for full-time commitment or
for part time work.

1.1.1. Indefinite-term and fixed-term employment agreements

As a rule, employment agreements should be concluded for an indefinite period of time.

By means of exception, an employment agreement can be concluded for a fixed term, but
only in the limited cases and conditions set forth by the Labour Code, as follows:

1
 2016/2017
Professor Luminita Dima

a) replacement of an employee in the event that his/her employment agreement is

suspended, except when the employee participates in a strike;
b) temporary increase in and/or amendment of the structure of the employers
activity;
c) seasonal activities;
d) conclusion of the employment agreement based on legal provisions made with a
view to temporarily favour certain categories of unemployed persons;
e) hiring of a person who, within five years from the employment date, shall meet
the conditions for retirement;
f) entering an eligible position within a union, employers organization or non-
governmental organization, for the period of the mandate;
g) hiring of retired persons who, according to the law, are permitted to cumulate
pension and salary;
h) in other instances stipulated by special laws or for performing certain work,
projects or programs.

Pursuant to the Romanian Labour Code, the period of employment in a fixed-term

agreement may not exceed 36 months. The agreement may be extended after the expiry
of its initial duration based on the parties' written consent, for the duration of the
fulfilment of a specific project, program or work. The same parties may conclude up to
three successive fixed-term agreements. Fixed-term agreements concluded within three
months after the termination of a previous fixed-term agreement are considered
successive and the duration of each such agreement cannot exceed maximum 12 months.

If the fixed-term employment agreement is signed in order to replace a suspended

employee [letter a) above], the term of the agreement will expire when the reasons that
caused the suspension of the employee holding the job position have ceased to exist.

If the employment agreement does not comply with the rules regarding the maximum
period of a fixed-term employment agreement and the maximum number of fixed-term
employment agreements, it will be considered an indefinite-term employment agreement.

Employees hired on grounds of fixed-term employment agreement enjoy the principle of

equal treatment in comparison with the employees who have indefinite term agreements.

1.1.2. Part-time employment agreements

An employer may hire employees with a work schedule corresponding to a rate fraction,
by means of individual employment agreements for an unlimited duration or for a limited
duration, called part-time individual employment agreements. The average duration of
the weekly or monthly working time in case of such employees is shorter that the one
corresponding to the full time employees.

2
 2016/2017
Professor Luminita Dima

Employees hired under a part-time employment agreement shall enjoy the same rights as
full-time employees under the terms stipulated by the law and the applicable collective
labour contracts. Part-time employees wages are to be calculated pro rata with hours
worked and in relation to the entitlements established for a normal work schedule.

1.1.3. Temporary agency workers

The Labour Code also regulates the work performed by temporary agency workers who
are employed (and paid) by a temporary labour agency, and placed at the disposal of a
user to perform temporary work under the supervision and management of the user. The
user may hire such workers only on grounds of a contract concluded to this aim with a
temporary labour agency authorized in accordance with the applicable legislation. The
Labour Code provides for mandatory rules regarding the work performed by temporary
agency workers and the agreements that must be executed by the involved actors.

A user can call on the temporary labour agencies only for carrying out a precise and
temporary duty - temporary work assignment.

A temporary work assignment shall be established for a period which cannot exceed 24
months. The duration of a temporary work assignment can be extended on successive
periods which, added to the initial duration of the assignment, cannot exceed 36 months.

Temporary employees shall have access to all the services and facilities provided by the
user under the same terms as the other employees of that user. Moreover, the law compels
the user to provide the temporary employee with individual protection and work
equipment except when this is the responsibility of the temporary labour agency.

1.2. Conclusion of employment agreements

A natural person acquires legal capacity to conclude an employment agreement as an

employee after having turned 16 years of age. A natural person may also conclude an
employment agreement, as an employee, after turning 15 years of age, based on his/her
parents or legal representatives consent, for activities in compliance with his/her
physical development, aptitudes and knowledge, unless this places his/her health,
development, and vocational formation under risk.

The employer is a natural or legal person who may hire employees on grounds of
individual employment agreements. A legal entity may conclude individual employment
agreements, as an employer, after having acquired legal personality. A natural person
shall acquire the capacity to conclude individual employment agreements, as an
employer, after having acquired the full capacity of exercise of his/her rights.

1.3. Form and content of employment agreements

3
 2016/2017
Professor Luminita Dima

According to the Labour Code, the employment agreement must be concluded in writing,
in Romanian language, the obligation to conclude in writing the individual employment
agreement belonging to the employer. The written form of the employment agreement
represents a legal requirement for the validity of such agreement.

Employment agreements must stipulate: the identity of the parties, the workplace, the
employers place of business, the job and the job description providing for the duties of
the job, the criteria used for the employees professional evaluation applicable at the level
of the company, the typical risks of the job, the normal work period expressed in hours
per day and hours per week, etc. The standard individual employment agreement was
approved by means of a ministerial order establishing the clauses compulsory for an
individual employment agreement and the possibility for the parties to include other
specific clauses. According to the Labour Code, the parties may negotiate and include in
the employment agreement other specific clauses like: non-competition, mobility,
confidentiality, etc.

The Labour Code also provides the obligation of the employer to inform the employee
prior to the execution of the individual employment agreement with respect to the
conditions applicable to the contract and the employment relationship, thus implementing
Directive 91/533/EEC. The Labour Code did not adopt any of the limitations of the scope
of application of the information rules permitted by the Directive. However, the
obligation of information is considered as being accomplished if the parties sign the
employment agreement.

The employer is also obliged to keep a general registry of employees and fill in such
registry with records of the employment agreements according to the legal provisions.

Failure of the employer to comply with the employment agreement-related obligations

(written form, keeping and filling in the general registry of employees, etc.) shall qualify
as administrative offence carrying a fine. In some cases, the lack of the written form of
the employment agreement represents criminal offence.

1.3.1 Probation periods

The employment agreement may provide for a probation period. Such probation period
may be enforced only if expressly provided for in the employment agreement. The
maximum length of the probation period is 90 calendar days for execution positions and
120 calendar days for management positions. Persons with disabilities may be subject to
a probation period of no longer than 30 calendar days.

During the probation period, the employee enjoys all the rights and has all the obligations
stipulated in the labour legislation, the applicable collective labour contract, the
companys rules and regulations, as well as the individual employment agreement.
During or at the end of the probation period, the individual employment agreement may

4
 2016/2017
Professor Luminita Dima

be terminated by simple written notification, without a notice period, at the initiative of

one of the parties. The termination of the employment agreement during or at the end of
the probation period is not necessary to be grounded.

For all the duration of an individual employment agreement, there may only be one
probation period. As an exception, an employee may be subject to a new probation period
if he/she starts up in a new position or profession with the same employer, or he/she is to
perform his/her activity in a work place under difficult, harmful, or dangerous conditions.

1.3.2. Non-competition clause

The Labour Code stipulates that the employer and the employee may negotiate and
include a non-competition clause in the employment agreement. As a rule, the non-
competition clause may produce effect after the termination of the employment
relationship. According to the Labour Code, the non-competition clause shall impose on
the employee an obligation not to perform, for his/her own interest or that of a third party,
an activity which is competing with the one performed for his/her employer.

In order to produce effects, the non-competition clause inserted in an employment

agreement must expressly contain detailed references in respect of:
(i) the exact activities that cannot be performed by the employee after the termination
of his employment agreement;
(ii) the amount of the monthly non-competition indemnity;
(iii) the duration of the prohibition (the maximum duration of a non-competition
clause is twenty-four months after the termination of the employment agreement);
(iv) the third parties to whom the employee in question may not provide services;
(v) the geographic area within which the prohibition is effective.

The monthly non-competition compensation due to the employee is negotiable and shall
amount at least to 50% of the average gross salary income of the employee for the past
six months prior to the termination of the individual employment agreement or, if the
duration of the individual employment agreement is less than six months, of the average
gross monthly salary income due to him throughout the contract period.

The non-competition clause must not lead to the absolute prohibition for the former
employee to perform his/her activity and shall not produce effects in case the
employment agreement is terminated for specific reasons non-incumbent to the employee
expressly mentioned by the Labour Code (termination by the employer's initiative for
reasons not related to the employees person or termination by the effect of the law for
reasons such as, nullity of the employment agreement).

However, upon notification of the employee or territorial labour inspectorate, the

competent court of law can limit the effects of the non-competition clause.

1.3.3. Confidentiality clause

5
 2016/2017
Professor Luminita Dima

As regards confidentiality such should be regulated pursuant to a specific clause and, in

order to take effect it must be expressly incorporated in the employment agreement.
There are no other restrictions or rules to be complied with when agreeing on a
confidentiality clause.

2. Amendment of the employment agreement

The individual employment agreement may only be amended based on the parties'
consent. As an exception, an unilateral amendment to the individual employment
agreement shall only be possible in the cases and under the conditions stipulated by the
law.

Amendments to the individual labour contract may refer to anyone of the following
elements: contract duration, work place, nature of work (work position), work conditions,
salary; work time and rest time.

The work place may be modified unilaterally by the employer by means of delegation or
secondment of the employee to a work place other than the one stipulated in the
individual employment agreement. During the delegation or secondment, respectively,
the employee shall preserve his/her position and all other rights stipulated in the
individual employment agreement.

2.1. Delegation

The delegation represents a temporary performance by the employee, based on the

employer's order, of works or assignments corresponding to the job position, outside
his/her work place.

The delegation may be ordered for a period not to exceed 60 calendar days within 12
months, and may be extended, based on the employee's consent, by successive periods of
maximum 60 calendar days. The refusal of the employee to agree on the extension of the
delegation cannot represent a reason to apply a disciplinary sanction to the respective
employee.

The delegated employee shall be entitled to the payment of transport and accommodation
expenditures, as well as a delegation allowance, under the terms of the law or the
applicable collective labour contract.

2.2. Secondment

The secondment (temporary transfer) represents a temporary change in the work place,
based on the employer's order, to another employer, for the purpose of performing some

6
 2016/2017
Professor Luminita Dima

works in the latter's interest. Exceptionally, the secondment may also involve a change in
the nature of work (position), but only based on the employee's written consent.

The secondment may be ordered for a period not to exceed one year. Exceptionally, the
period of the secondment may be extended for objective reasons requiring the employee's
presence at the employer to whom the secondment was ordered, based on both parties'
consent, every six months. The employee may only be free to refuse the secondment
ordered by his/her employer exceptionally and for good personal grounds.

The employee seconded shall be entitled to the payment of transport and accommodation
expenditures, as well as a secondment allowance, under the terms of the law or applicable
collective labour contract.

The employer to whom the secondment has been ordered shall grant the rights due to the
seconded employee.

During the secondment period, the employee shall enjoy the more favourable rights,
either those granted by the employer having ordered the secondment, or those granted by
the employer to whom the secondment has been made.

2.3. Temporary change of workplace and nature of work (position)

An employer may also temporarily change the place and nature of work, without the
employee's consent, in the case of a force majeure, as a disciplinary sanction, or as a
measure aimed at protecting the employee, in the cases and under the terms stipulated by
the law.

3. Termination of the employment agreement

Pursuant to the provisions of the Labour Code, an employment agreement may be

terminated (i) by the effect of the law (ii) pursuant to employees initiative (resignation);
(iii) by the parties agreement; or (iv) pursuant to the employer's initiative (dismissal).

The termination of the employment relationships by the effect of the law occurs only in
some cases expressly provided by the Labour Code, independently of the will of any of
the parties.

While the mutual termination and the employees resignation are governed by very few
rules, the dismissal is very strictly regulated. The termination of employment
relationships pursuant to the employers initiative (dismissal) may occur only in some
specific situations expressly provided by the Labour Code. In addition, in all cases when
the employer intends to dismiss an employee it has the obligation to comply with
imperative procedural rules in view of issuing the dismissal decision.

7
 2016/2017
Professor Luminita Dima

3.1. Termination of the employment agreement by the effect of the law

According to the provisions of the Labour Code, the individual employment agreement is
terminated by the effect of the law:

a) on the date of the employees death or employers death, in case the employer is an
individual person, as well as in case of the dissolution of the employer who is a legal
person, from the date the employer ceases to exist;
b) on the date a final judgment is delivered, declaring the death of or placing under
interdiction the employee or the employer who is an individual person;
c) on the date the employee meets the requirements of age and duration of contribution
period for retirement, on the date of communication of the retirement decision in case
of retirement for invalidity, anticipated retirement, partial anticipated retirement,
retirement by reduction of the standard retirement age;
d) as a result of finding the absolute nullity of the individual employment agreement,
from the date the nullity was found based on the parties consent, or a final judgment;
e) as a result of the admittance by the court of the claim for reinstating in the position
occupied by the employee a person dismissed unlawfully or for ill-founded grounds,
from the date the final judgment is delivered;
f) as a result of a sentence to execute an imprisonment punishment, from the date the
final judgement is delivered;
g) from the date of withdrawal, by the competent authorities or bodies, of the approvals,
authorisations, or certifications necessary for exercising ones profession;
h) as a result of the interdiction to exercise a profession or to perform a job, as a safety
measure or complementary punishment, from the date the final judgment ordering the
interdiction was delivered;
i) on the expiry of the duration of the individual employment agreement concluded for a
definite term;
j) from the date of withdrawal of the parents or legal representatives consent, for
employees whose ages range between 15 and 16 years.

In case the individual employment agreement of the employee is terminated by the effect
of the law on the date a final judgement of a law court is delivered admitting the claim for
reinstating an employee who being previously employed on the same position was
dismissed unlawfully or for ill-founded grounds, the employer is obliged to offer to the
employee whose individual employment agreement is terminated a vacant position in the
company, consistent with his/her professional training, if any.

Non-observance of this obligation does not have any consequence on the termination of
the employment relationship. However, the employee may ask the law court to oblige the
employer to observe such obligation.

The employee has at his/her disposal a period of 3 working days from the employer's
communication to state in writing his/her consent concerning the new job offered. If the
employee accepts the employers offer within the term stipulated the employment
agreement between the employer and the employee is amended accordingly.

8
 2016/2017
Professor Luminita Dima

If the employer has no vacant positions in the company consistent with employees
professional training, he is obliged to ask the territorial employment agency for support in
the redeployment of the employee according to his/her professional training.

The individual employment agreement ends at the moment when one of the above-
mentioned situations occurs. The parties are not obliged to observe any notice period.

3.2 Employees resignation

Pursuant to the Labour Code, resignation means the unilateral act of will of the employee
who, by means of a written notification, informs the employer about the termination of
the individual employment agreement, after the expiry of the notice period. The
employee is not obliged to ground the resignation but he/she must submit the resignation
in writing. The employer is obliged to register the resignation.

If the employee does not appear at his workplace or leaves the workplace his/her attitude
cannot be regarded as tacit resignation. The employees intention to terminate the
individual employment agreement must be unambiguous. However, absence from work
may be considered as a breach of the individual employment agreement and, by
consequent, may represent reason for the employer to apply a disciplinary sanction to the
employee.

The resignation produces its effects independently of employers agreement or refusal.

The employee is obliged to observe the notice period settled by the law or by the
collective or individual employment agreement, as the case may be. The notice period is
to be counted from the date the employee informs the employer about his/her will to
terminate the individual employment agreement. The duration of the notice period shall
not exceed 20 working days for employees in execution positions, or 45 working days for
employees in management positions. Thus, the parties may agree a shorter notice period
applicable in case of resignation.

For the duration of the notice period the individual employment agreement shall continue
to take full effects. If, during the notice period, the individual employment agreement is
suspended, the term of notice shall be suspended accordingly. The agreement shall
terminate on the date of expiry of the term of notice or on the date the employer waives
the benefit of such term, either entirely or partially (the employer has the right to wholly
or partially renounce to the notice period).

As an exception, the employee can resign without notice if the employer has not met his
obligations according to the individual employment agreement. However, employees
resignation does not prevent him/her from demanding the employer for fulfilment of any
contractual obligations he did not observed during the period of employment.

9
 2016/2017
Professor Luminita Dima

As well, as an exception, during or at the end of the probationary period the employee
may resign only by submitting a written notification, without being obliged to observe a
notice period.

The employee could withdraw his/her resignation only before his/her resignation reaches
the employer. In case the resignation reached the employer the employee cannot come
back on his/her decision. In the later case, the employee could withdraw his/her
resignation only under the condition of getting the employers express or tacit, but
unambiguous, agreement.

3.3. Mutual termination of the employment agreement

The Labour Code provides for the possibility of employment agreements termination by
mutual agreement of the parties on the date agreed thereupon. There are no specific
provisions on mutual termination of employment relationship. The general rules on
termination of agreements are applicable.

The employment agreement shall be terminated on the date agreed by the parties. In case
the parties did not specify the date the agreement is terminated, the effects of the
agreement cease on the date the parties reached the agreement on the termination of
employment relationship. The parties are not obliged to observe any notice period.

3.4. Dismissal of the employee

3.4.1. Grounds and general aspects

The termination cases upon employers initiative (dismissal) are strictly regulated by the
Labour Code and the employee cannot be dismissed for any of other reason. The
employer may have the initiative for terminating an employment agreement:
(i) for reasons related to the employees person - i.e. gross misconduct or repeated
misconduct (disciplinary reasons); in case the employee is under preventive
custody for more than 30 days; physical unfitness or mental incapacity (only after
a decision is issued by the competent medical authority determining such
incapacity); in case the employee is not professionally fit to the position held
(professional inadequacy); or
(ii) for reasons not related to the employees person (i.e. redundancy).

In either case, to achieve dismissal, the employer needs to comply with strict procedural
rules.

3.4.2. Dismissal for professional inadequacy

The employer may decide to terminate the employee's agreement for professional
inadequacy. The professional inadequacy represents the failure of the employee to

10
 2016/2017
Professor Luminita Dima

properly perform the tasks and attributions related to his job position. The dismissal for
professional inadequacy does not involve the guilt of the employee but the incapacity of
the employee to perform his professional attributions.

The professional inadequacy must be assessed by taking into account the employees
obligations provided within the employment agreement, job description, internal rules
regulations, policies, etc. (in case the employees acknowledgement may be proved), as
well as in the legislation or applicable collective agreement.

The Labour Code provides for strict rules on terminating employment agreements for
professional inadequacy. With respect to the effective procedure, taking into account the
current legal framework, in the absence of a procedure provided by an applicable
collective labour agreement, the employer may elaborate his own procedural rules with
respect to the ascertainment of an employees professional inadequacy. However, if the
applicable collective labour agreement provides for such a procedure in order to ascertain
the employees professional inadequacy, the employer is obliged to observe it.

To the extent that, following the application of the relevant procedure, the employee is
found to be professionally inadequate, the employer is obliged to offer to the employee
another job position fit to his capacities and background and if the employer has no such
vacant position, it has to ask the territorial employment agency for support in the
redeployment of the employee according to his/her professional training. The employer
must also grant to the employee the notice period of at least 20 working days.

The dismissal decision has to be issued by the competent body of the employer following
the above mentioned procedure within 30 days from the date the employer initially
acknowledged of the professional inadequacy situation and must include all the elements
provided by the law.

3.4.3. Dismissal for disciplinary reasons

The employee may be dismissed as a disciplinary sanction only in two cases:

- if the employee committed a serious misconduct (breach of his/her obligations)
- if the employee committed several deeds of misconduct (repeatedly breached his/her
obligations)

The misconduct must be assessed by taking into account the employees obligations
provided within the employment agreement, job description, internal rules regulations,
policies, etc. (in case the employees acknowledgement may be proved), as well as in the
legislation or applicable collective agreement.

The seriousness of the misconduct is evaluated by taking into account all the elements
provided by the law: the circumstances under which the deed took place; the employee's
guilt degree; the consequences of the breach of discipline; the employee's general
behaviour at work; possible disciplinary sanctions previously undergone by him/her. The

11
 2016/2017
Professor Luminita Dima

employee's deed may be considered as serious misconduct only if concluding that the
employment relationships could not be maintained between him/her and the employer.

In case of several deeds of misconduct, it is not necessary that any of such deeds
represents serious misconduct (the seriousness results from the employee's attitude of
repeatedly breaching his/her obligations).

The Romanian Labour Code provides strict rules on terminating employment agreements
for disciplinary reasons. Any disciplinary sanction may be ordered only following a
disciplinary investigation procedure provided by the law. Such investigation must be
carried out by a person/commission empowered by the employer to this aim.

When the employer acknowledges of a situation of misconduct, he is obliged to appoint

an empowered person/investigation commission in order to perform the disciplinary
investigation.

For the purpose of performing the disciplinary investigation the employee shall be
summoned to an investigation meeting by the empowered person/investigation
commission by way of a written notification which must contain specific references to
the object of the meeting, the date, hour and place of the meeting.

In case the employee does not show up to the investigation meeting he/she was
summoned to, the employer may issue the disciplinary sanction without being obliged to
carry out the preliminary investigation procedure.

During the course of the investigation meeting, the employee shall have the right to
formulate and sustain any and all defences in his favour as well as he shall have the right
to submit to the empowered person/investigation commission all evidence and reasons
which he may deem necessary. The employee shall also have the right to be
accompanied, at his request, by a member from the trade union to which he belongs.

The dismissal decision has to be issued by the competent body within 30 calendar days
from the date the employer learned of the reasons for the termination (from the date of
registration of the disciplinary investigation commission report), but not later than 6
months from the date such reasons occurred.

The dismissal decision has to include at least the following:

(a) description of the reasons for the termination;
(b) reference to the provisions contained in the applicable internal regulation or
collective labor agreement (if the case) which justify the measure taken by the
employer;
(c) grounds for overlooking the employee's defenses;
(d) legal grounds for dismissal; and
(e) the term in which the decision may be challenged and the competent court of law
where the claim may be submitted.

12
 2016/2017
Professor Luminita Dima

In case of employees dismissal on disciplinary grounds the employer is not obliged to

offer to the employee another job position fit to his professional capacities and it has no
obligation to grant to the employee a notice period. As well, the employee is not entitled
to any severance payment.

3.4.3. Dismissal in case employee is taken into preventive custody.

According to the Labour Code, the employer can order employees dismissal if the
employee is taken into preventive custody for a period exceeding 30 days, under the rules
of criminal procedure. Since the text does not make any express mention the duration of
the preventive custody is counted in calendar days.

The employer is not obliged to offer to the employee another job position, to observe a
notice period or to give him/her severance payment. The dismissal decision must be
issued in writing and contain all the elements provided by the law.

3.4.4. Dismissal in case of employees physical unfitness and/or mental incapacity.

The employer may dismiss the employee under the Labour Code if, following a decision
of the competent medical investigation authorities, it is established the physical unfitness
and/or mental incapacity of the employee, which prevents the latter from accomplishing
the duties related to his/her work place.

The employer is obliged to offer to the employee another job position fit to his work
capacity and if the employer has no such vacant position, it has to ask the territorial
employment agency for support in the redeployment of the employee according to his/her
work capacity. The employer must also grant to the employee the notice period of at least
20 working days. However, the employee is not entitled to any severance payment unless
the applicable collective labour agreement, the individual employment agreement or
companys internal policies expressly provide for such payment. The dismissal decision
must be issued in writing and contain all the elements provided by the law.

3.4.5. Dismissal for redundancy

The dismissal for reasons not related to the employee's person represents the termination
of the individual employment agreement, caused by the suppression of that employee's
position due one or more reasons not related to employees person. The suppression of a
position must be effective and have an actual serious cause. Thus, the suppression of the
position shall not be in fact a change in such positions denomination, by keeping its
attributions and it shall not be followed by the re-creation of the same position within a
short period of time. At the same time, the employer should be able to prove that the
suppression had a serious cause and it was not aimed at the respective employees
dismissal.

13
 2016/2017
Professor Luminita Dima

The dismissal decision must be issued in writing and it must contain all the elements
provided by the Labour Code. The employer must grant to the employee the notice period
of at least 20 working days.

The employee may receive severance payments as provided by the applicable laws and/or
the applicable collective labour agreement.

3.4.6. Prohibition of dismissal

According to the Labour Code, it is prohibited to dismiss employees based on criteria

such as gender, sexual orientation, race, colour of skin, or for the exercise, under the
terms of the law, of their right to strike.

In some cases the dismissal is temporarily prohibited (e.g. for the duration of maternity
leave; a temporary working incapacity, medically certified; suspension of the activity
during the quarantine; annual holiday leave; pregnancy, if the employer was aware of
such condition prior to the issuance of the dismissal decision; leave taken in order to raise
a child or care for a sick child).

Any dismissal issued by breaching the above mentioned prohibitions shall be nullified by
the courts.

3.4.7. Term of issuance and mandatory content of the dismissal decision

The decision to terminate an employment agreement must be issued in writing by the

competent body of the company within 30 days from the date the employer
acknowledged of the occurrence of the dismissal grounds (one of the situations provided
by the law).

For validity purposes, the dismissal decision must be grounded de facto and de jure and
include details of the period within which it can be challenged as well as the court where
the complaint may be filed.

3.4.8. Communication of the dismissal decision.

The dismissal decision must be communicated to the employee in writing and shall take
effects from the date of its communication. The jurisprudence stated as communication
modalities: communication attested by employees signature in the expedition registry,
communication attested by employees signature on a copy of the document, registered
mail with confirmation of receipt, communication through one of the modalities provided
by the civil procedure. An oral communication of the dismissal decision is not a valid
communication. According to the recent jurisprudence of the Supreme Court, the decision
may be communicated by email if the employee has informed the employer about his/her
email address and such communication modality is usual used between the parties.

14
 2016/2017
Professor Luminita Dima

The date of communication is very important since this is the moment of calculation of
the term of 45 calendar days within which the dismissed employee may challenge the
dismissal decision before the competent law court.

3.4.9. Burden of proof and related risks in case of challenging the dismissal decision

Under the Romanian legislation in force, in all cases when the dismissed employee
challenges the dismissal decision before the court, the employer has the burden of
proving that the dismissal ordered is well grounded and that all procedural rules
imposed by the legislation have been complied with. Romanian law expressly provides
for the protection of employees against illegal dismissal and the labor courts pay special
attention to the observance of the legal provisions in case of the dismissal of an
employee. The employee has a 45 calendar days statute of limitation for challenging the
dismissal decision.

If the employer does not succeed in proving the observance of all applicable legal
provisions (the dismissal grounds and observance of all procedural rules), the court shall
cancel the dismissal decision, oblige the employer to pay an indemnity equal to the
indexed, increased or updated salary and the other entitlements the employee would have
otherwise benefited from and, at the employee's express request, reinstate him/her in the
position he/she has been dismissed from.

4. Working time

When establishing the employees work schedule, the employer is obliged to take into
account a large number of imperative rules provided by the Romanian labour legislation
on the organization of working time.

4.1. Normal duration of working time

The Romanian Labour Code stipulates that the normal duration of working time for full-
time employees is 8 hours per day and 40 hours per week. In the case of young people
under the age of eighteen years, the length of the working time is 6 hours per day and 30
hours per week.

The parties may choose an unequal distribution of the working time, provided the normal
length of the working time of 40 hours per week is observed. The actual manner for
establishing an unequal working schedule within the 40-hours working week shall be
negotiated by means of the collective labour contract at the level of the employer, or, in
its absence, it shall be stipulated in the company's Internal Regulation. An unequal work
schedule shall operate for each employee only if it is expressly stated in the individual
employment agreement.

15
 2016/2017
Professor Luminita Dima

It must be taken into account that a working day of 12 hours must be followed by a rest
period 24 hours.

4.2. Maximum duration of working time

The maximum legal length of the working time may not exceed 48 hours per week,
including the overtime.

By way of exception, the length of the working time, including the overtime, may be
extended beyond 48 hours per week, provided that the average working hours, calculated
over a reference period of 4 calendar months, do not exceed 48 hours per week

In certain fields of activity or professions determined by the applicable collective labour

contract, the reference period may be extended from 4 months to 6 months or maximum
12 months.

4.3. Flexible work scheduling

An employer may also establish flexible working hours, with the consent or at the request
of the respective employee.

The flexible working hours represents a flexible organization of the working time. Thus,
the length of the working day shall be divided into two periods: a fixed period during
which all the employees are obliged to be at their work places, and a variable, mobile
period in which the employee chooses the times of arrival and departure, provided the
duration of working time is observed. The flexible working hours can only operate in
compliance with the provisions of the Labour Code on normal duration of working time
and maximum duration of working week.

4.4. Overtime

The work performed by exceeding the normal length of the weekly working time of 40
hours shall be considered overtime. The overtime work may be performed at the
employer's request and only with the employee's consent. By means of exception, the
employer can order overtime work in case of force majeure and in case of urgent work
necessary for the prevention or removal of the effects of accidents or catastrophes.

Overtime work shall be compensated by granting paid time off, corresponding to the
overtime work performed, within the next 60 calendar days after performing it. If such
compensation is not possible within the time limit mentioned above, the overtime work
shall be paid to the employee by adding a wage increment corresponding to the duration
of the overtime work performed amounting of minimum 75% of the basic wage.

16
 2016/2017
Professor Luminita Dima

During the periods when the activity is reduced the employer may grant paid time off to
compensate the overtime that will be performed during the following 12 months.

Pursuant to the Labour Code, the part-time employees are not allowed to perform
overtime work.

4.5. Night workers

Night work is work performed between 10 p.m. and 6 a.m. Night workers are those
workers who either perform night work for at least 3 hours during their daily working
time, or perform night work for at least 30% of their monthly working time.

Night workers shall benefit of either reduction of daily working time by 1 hour in those
days when they perform at least 3 hours of night work or wage increment of at least 25%
of the basic wages for each hour of night work if the working time represents at least 3
hours of night work.

5. Rest time

5.1. Breaks and daily rest

If a working day exceeds 6 hours, employees are entitled to a lunch break and other
breaks which, unless otherwise stipulated in the collective labour contract, the individual
employment agreement and the companys Internal Regulation, are not included in the
normal length of the working day.

Between two working days, employees are entitled to no less than 12 consecutive hours
of rest.

5.2. Weekly rest

The weekly rest must be granted each week over 48 consecutive hours, usually on
Saturday and Sunday.

If the rest on Saturday and Sunday would be detrimental to the public interest or the
normal evolution of the activity, the weekly rest can also be granted on other days laid
down in the applicable collective labour contract or the company's Internal Regulation. In
such case, the employees are entitled to a wage increment laid down in the collective
labour contract or, as the case may be, the company's Internal Regulation.

5.3. Work performed during legal holidays

17
 2016/2017
Professor Luminita Dima

The following public holidays are provided under the Romanian Labour Code:
- 1st and 2nd of January;
- 24th of January;
- 1st and 2nd day of Easter;
- 1st of May - International Labour Day;
- 1st of June;
- the 1st and the 2nd day of Rusalii;
- 15th of August - Adormirea Maicii Domnului;
- 30th of November St. Andrew (Sfantul Andrei).
- 1st of December - Romania's National Day;
- 25th and 26th of December (Christmas);
The employees which are not Christians are entitled to 2 days off for each of the three
main religious annual holidays, which are declared as such by the officially
recognized religions, other than the Christian one.

The work cannot be performed on public holidays, except in case of employers providing
medical care and supplying people with the essential food stuffs and where activity
cannot be interrupted due to the nature of the operating process or to the type of activity.

In such cases, the work performed during public holidays and other days off is paid to the
employee by adding a wage increment corresponding to the duration of the work
performed which may not be lower than 100% of the basic wage.

5.4. Annual paid leave

According to the Romanian labour legislation, the annual paid leave is a fundamental
right which must be granted to every employee and may not be subject to any
assignment, waiving or limitation. The employer is obliged to grant to every employee
the annual paid leave in kind and each employee is obliged to take his leave during the
period such leave was scheduled for.

5.4.1. Length of annual leave

The minimum duration of the annual leave is of 20 business days, except for certain
category of employees expressly provided by law (i.e., employees working in difficult,
dangerous or unhealthy conditions) who benefit in addition of at least 3 working days.

The effective length of the annual leave shall be agreed upon in the individual
employment agreement.

The annual leave does not include public holidays and any paid days provided by the law
and/or applicable collective labour agreements.

18
 2016/2017
Professor Luminita Dima

5.4.2. Amount and payment of leave allowance

During the leave, the employee is entitled to receive a leave allowance which may not be
lower than the basic salary, allowances and permanent increments due for that period.

The leave allowance shall equal to the daily average of the salary rights mentioned above
the employee was entitled to over the last 3 months prior to the month when the leave is
taken, multiplied by the number of days of leave. The leave allowance has to be paid by
the employer at least 5 working days before taking the leave.

5.4.3. Leave scheduling and taking the scheduled leave in kind

The employer is obliged to schedule the annual leave for the following year for all his
employees until the end of the current calendar year. The scheduling shall be done by the
employer on a collective or individual basis after consulting the trade union or, as the
case may be, the representatives of the employees, for the collective scheduling, or after
consulting each employee for the individual scheduling.

The annual leave may be taken all at once or fractioned. Should the leave be divided, the
employer has the obligation to set the schedule in such way that every employee takes at
least 10 working days of uninterrupted leave in one calendar year.

The employee has the obligation to take the leave in kind within the period it was
scheduled for, except for the cases expressly provided in the law or if, for objective
reasons, the leave may not be taken.

The employer is obliged to grant the annual leave within an 18 months period starting
from the beginning of the next calendar year to all employees who within the current
calendar year did not take the entire leave they were entitled to.

5.4.4. Compensation of the not taken leave

In order to fulfill its aim, the leave should be taken by the employee. The law provides,
however, that the leave the employee was entitled to that he/she did not take shall be
compensated in money only at the termination of the individual employment agreement.

5.4.5. Interruption and call back from leave

The leave may be interrupted, upon employees request, for objective reasons like:
temporary incapacity of work, fulfilling public duties or military service, participating in
qualification, re-qualification, improvement or specialization programs, maternity leave
or in case the employer calls the employee back from leave. In these cases, the
scheduling of the leave may be modified by the employer, upon employees request.

19
 2016/2017
Professor Luminita Dima

The employer may call back the employee from leave in case of force majeure or urgent
matters that require the presence of the employee at the workplace. In such case, the
employer shall bear all expenses of the employee and his/her family necessary to return
to the workplace and the potential damages suffered by him/her following the
interruption of the leave.

20