Terminating an employment relationship in Romania is governed by the Labour Code and requires strict adherence to specific legal procedures. Employers must navigate various requirements related to grounds for termination, notice periods, and documentation to ensure compliance and avoid potential legal challenges.
Understanding the nuances of Romanian labour law is essential for employers operating in the country. The process differs significantly depending on whether the termination is initiated by the employer, the employee, or by mutual agreement, and whether there is a valid "cause" for the employer-initiated termination.
Notice Period Requirements
When an employer initiates termination, a notice period is generally required before the employment contract ends. The length of this period is stipulated by the Labour Code and may be extended by collective bargaining agreements or individual employment contracts, but cannot be shorter than the legal minimums.
| Employee Category | Minimum Notice Period (Working Days) |
|---|---|
| Employees | 20 working days |
| Management Staff | 45 working days |
The notice period begins the day after the employee receives the written termination notice. During the notice period, the employee is generally expected to continue performing their duties. The employer cannot unilaterally revoke the notice period unless the employee agrees.
Severance Pay
Severance pay is not a universally mandated entitlement for all types of employment termination in Romania. The Labour Code primarily requires severance pay in specific situations, most notably in cases of collective redundancies or individual termination due to the employee's physical or mental incapacity, provided the employee cannot be reassigned to another suitable position.
In other cases, such as termination for disciplinary reasons or individual performance issues, severance pay is not legally required by the Labour Code. However, severance entitlements may be stipulated in:
- Collective bargaining agreements (at national, sector, or company level).
- Individual employment contracts.
- Internal company regulations.
When severance is required, the calculation method is often defined by the agreement or regulation mandating it. There is no single statutory formula for all cases; it typically depends on factors like the employee's length of service, salary, and the specific terms agreed upon.
Grounds for Termination
Employment contracts in Romania can be terminated on several grounds, broadly categorized by who initiates the termination and the underlying reason.
Termination Initiated by the Employer
Employer-initiated termination must be based on specific grounds provided by the Labour Code. These can be with or without cause related to the employee's conduct or performance.
-
Termination for Cause (related to the employee):
- Serious disciplinary misconduct or repeated minor misconduct.
- Unsatisfactory professional performance (failure to meet job requirements).
- Physical or mental incapacity preventing the employee from performing their duties (requires medical assessment).
- Pre-trial detention or a final court sentence leading to imprisonment.
-
Termination Without Cause (not related to the employee's conduct):
- Abolition of the employee's position due to organizational, technological, or structural changes (redundancy). This must be a genuine abolition, not merely a change of title.
- Dissolution of the employer entity.
Other Termination Grounds
- Termination Initiated by the Employee:
- Resignation (with or without notice, depending on the reason).
- Termination by Mutual Agreement:
- Both parties agree in writing to terminate the contract on a specific date.
- Termination by Operation of Law:
- Expiration of a fixed-term contract.
- Death of the employee or employer (if a natural person).
- Withdrawal of permits or authorizations required for the job.
- Judicial dissolution of the employer.
Procedural Requirements for Lawful Termination
Strict adherence to procedural steps is crucial for a lawful employer-initiated termination. Failure to follow the correct procedure is a common pitfall that can lead to the termination being deemed unlawful by a court.
| Step | Description | Applicable Grounds | Key Documentation |
|---|---|---|---|
| 1. Investigation (Disciplinary/Performance) | Conduct a thorough internal investigation, allowing the employee to present their defense (mandatory for disciplinary/performance issues). | Disciplinary misconduct, Unsatisfactory performance | Investigation report, Employee's defense statement, Witness statements (if any) |
| 2. Consultation (Redundancy) | Consult with trade unions or employee representatives (mandatory for collective redundancies, sometimes required for individual). | Redundancy (Abolition of position), Collective redundancies | Minutes of consultation meetings, Information provided to representatives |
| 3. Medical Assessment (Incapacity) | Obtain a medical report confirming the employee's inability to perform duties and assess possibility of reassignment. | Physical or mental incapacity | Medical report, Employer's offer of alternative positions (if available) |
| 4. Issuance of Termination Decision | Draft a written termination decision (order/notice) clearly stating the legal grounds, reasons, and effective date. | All employer-initiated grounds | Written termination decision/order |
| 5. Notification to Employee | Deliver the written termination decision to the employee. This must be done in person with signature or via registered mail with acknowledgment of receipt. | All employer-initiated grounds | Proof of delivery (employee signature, postal receipt) |
| 6. Observance of Notice Period | Allow the statutory or contractual notice period to run (unless waived by mutual agreement). | Redundancy, Incapacity, Unsatisfactory performance (usually), Disciplinary (sometimes) | Termination decision specifying notice period start/end dates |
| 7. Registration with Authorities | Register the termination of the employment contract with the relevant authorities (e.g., Labour Inspectorate) within the legal timeframe. | All termination grounds | Registration documents, REVISAL entries |
Common pitfalls include insufficient evidence for disciplinary/performance issues, failing to conduct a proper investigation, not offering alternative positions where required (e.g., incapacity, sometimes redundancy), incorrect calculation or application of the notice period, and errors in the termination decision document itself (e.g., incorrect legal basis, insufficient justification).
Employee Protections and Wrongful Dismissal
Romanian law provides significant protections for employees against unlawful termination. Employees who believe their dismissal was unfair or procedurally incorrect have the right to challenge the employer's decision in court.
If a court finds that the termination was unlawful (either substantively, due to lack of valid grounds, or procedurally, due to failure to follow the correct steps), the employer may face serious consequences, including:
- Reinstatement: The court can order the employer to reinstate the employee to their previous position.
- Compensation: The employer may be ordered to pay the employee compensation equivalent to the salaries they would have received from the date of unlawful termination until the date of reinstatement.
- Damages: In some cases, additional damages may be awarded.
Certain categories of employees benefit from additional protections, such as pregnant employees, employees on maternity/paternity leave, employees on sick leave, and employee representatives, whose termination is restricted or requires specific conditions. Employers must be particularly cautious when considering termination for employees in protected categories.
