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Coalition for Romania’s Development requests Gov’t to clarify measures regarding furlough

The measures adopted by the Government through Emergency Ordinance no. 30/2020 (OUG 30/2020), meant to support the business environment and the employees in Romania, especially those referring to furlough, are still insufficient and partially unclear, claims the Coalition for the Development of Romania (Coalitia pentru Dezvoltarea Romaniei-CDR), in a release issued on Wednesday.

“The Coalition for the Development of Romania – CDR took notice of the measures recently adopted and appreciates the efforts conducted by the Government to find solutions with which to come to the aid of employees and companies affected by the COVID-19 pandemic, but emphasizes that these measures should be clear, simple, and applied in a balanced manner and should aim at all the persons and companies affected by the pandemic. Since the start of the pandemic, the CDR has formulated a series of proposals for concrete measures that would come in support of companies in difficulty, in order to be applied only on the duration of the state of emergency, such as: solutions to make work flexible, support for furlough for all employees and companies affected, simplification, digitization and the elimination of bureaucracy. All these proposals are meant to ensure both the protection of employees and our clients, but also the sustainability of jobs, the insurance of continuity of some economic activities and limiting the negative impact of this situation on the economic competitiveness of Romania on the long term. Analyzing the measures adopted through OUG 30/2020, we believe they’re still insufficient and partially unclear in regards to their implementation, especially those that regard furlough,” the release mentions.

According to representatives of the CDR, in order to ensure an economic balance it is extremely important that measures such as support in case of furlough be applied unitarily, without discrimination and aim at all categories of employees and companies impacted, not only part of them.

In the view of the representatives of the business environment, in the current form of the ordinance it’s very important for a series of aspects to be clarified. Thus, the CDR says that the mechanism through which the furlough indemnity gets to the employee, because “as it is stipulated in the OUG at this moment, there is the risk of pay for work rendered in March be paid to the employee at the earliest in May.”

Furthermore, CDR brings in discussion the way in which the capping of the indemnity for furlough is applied.

“The OUG provides for the reduction of the furlough indemnity to 75 pct of the base salary, but no more than 75 pct of the median wage. It must be expressly clarified if this cap refers only to the total indemnity supported from the budget for unemployment insurance, with the employer being able to pay from its own funds the difference in indemnity up to the maximum value provided by the Labor Code or negotiated with social partners, depending on the case,” the Coalition members warn.

On the other hand, CDR makes reference to the unclear condition regarding the formulation of being unable to pay the salaries of all employees.

“It’s unclear how this will be evaluated depending on the specific of each sector: for example, if it relates only to the employees affected by furlough or all employees of the company. It’s unjustified for those employers that can pay part of their employees, the activity of which was not yet affected, to not benefit from support,” the CDR representatives believe.

On the list of aspects considered by the business environment to be unclear are: diminishment of inflows (it’s unclear what inflows are targeted and if only inflows stemming from reduced activity are targeted – example: the situation of employers with several points of business or several activities, the indemnity be exempt from taxes and contributions, in view of simplifying the procedure, the hypothesis referring to the incapacity to pay wages refers to reducing activity (it’s necessary to clarify if reimbursement of the indemnity is applied in the hypothesis of temporary closure of activity – reduction is not always an option).”

The Coalition for the Development of Romania is a private initiative, build as a collaboration agreement through the collective participation of its members and brings together organizations such as: The American Chamber of Commerce in Romania (AmCham), the French Chamber of Commerce in Romania (CCIFER), the Association of Businessmen of Romania (AOAR), the Romanian-German Chamber of Commerce and Industry (AHK), Romanian Business Leaders (RBL), the Council of Foreign Investors (FIC), the Concordia Owners’ Confederation and the National Council of Small and Medium-sized Enterprises of Romania (CNIPMMR).

The companies represented by the 25 business organizations which are members of CDR employ over 1 million people and generate approximately 50 pct of the GDP.

 

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