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January 25, 2021
BUSINESS BUSINESS COMPANIES ECONOMY EDITORIAL LEGAL OUTLOOK OP-ED OPINION POINTS OF VIEW

Gruia Dufaut Law Office presents: Kurzarbeit in Romania – New rules

The Covid-19 crisis has entailed certain important changes in labor law in Romania, which are not so easy to actually implement. The GEO no. 132/2020 shaped the legislative framework for the implementation of the famous partial unemployment scheme (“kurzarbeit”), used by Germany during the 2008 financial crisis to avoid mass layoffs.

However, since its entry into force on August 10, 2020, the text has undergone numerous modifications, especially under the newly adopted GEO no. 211/2020, in force since December 7, 2020, and Law no. 282 of 08.12.2020, in force since December 12, 2020.

The implementation of such provisions regarding reduced working hours in Romania is becoming problematic for companies, especially because of the ambiguity of the texts.

For the record, the GEO no. 132/2020 provided for an employer the right to unilaterally reduce working hours of the employees during the state of emergency / alert, for at least 5 consecutive working days per month. The concerned employees were therefore entitled to an allowance accounting for 75% of the difference between the gross salary provided for in the individual employment contract and the basic gross salary corresponding to the hours actually worked. This compensation is aimed to supplement the salary due, calculated according to the actual working time.

 

Here below there are the main changes made to the GEO no. 132/2020:

 

1.Reduction of working hours

If before December 7, 2020, the GEO no. 132/2020 provided that the employer was allowed to reduce the working hours of employees by a maximum of 50%, for at least 5 consecutive working days during one month (i.e. a whole week), starting with the date of entry into force of the provisions of the GEO no. 211/2020, the maximum reduction of the working hours allowed is 80%, for at least 5 working days during a month.

At first glance, it may seem that the law has changed and the employer is benefiting therefrom when looking at the percentage relating to the working time reduction.

However, the provisions of the GEO no. 211/2020 were enforceable only during a very short period of time (from December 7 to December 12 2020…. !!!), because the Law no. 282/2020 resumed the old rule, according to which a maximum of 50% reduction of the working hours of employees is allowed for at least 5 days per month.

On the other hand, the law extends the applicability of this measure: 3 months after the end of the state of emergency/alert. It is therefore likely that the measure aimed at working hours’ reduction could be extended beyond March 2021, in consideration of the Government’s having already extended the state of alert in Romania by 30 days, since December 14, 2020.

 

2.Mandatory conditions to be met by the employer to reduce working time

  • a temporary reduction in the activity of the company, following the declaration of the state of emergency / alert;
  • the measure targets at least 10% of the total number of employees of the company;
  • the reduction in activity is justified by a decrease of at least 10% of the turnover for the month preceding the month when the measure is applied or, at most, the turnover of the month prior to the month preceding the reduction measure of the working hours, compared to the same month of the previous year. In the case of NGOs or self employed persons, sole proprietorships and family businesses, the decrease is linked to the realized income.

 

3.Formalities and restrictions

 

According to Ordinance no. 132/2020, as amended by GEO no. 211/2020, the employer had to inform and consult the trade union/the employees’ representatives/the employees, as the case may be, on his decision to reduce working time. Likewise, he had to inform each of the employees affected by the working time reduction measure, at least 5 days before the entry into force of the decision. He also had to register this decision in REVISAL (the electronic register of employees).

The Law no. 282/2020 makes this measure even more bureaucratic and imposes since December 12, 2020 the obligation for the employer not only to consult the union / the employees’ representatives, but also to get to and sign an agreement therewith on the percentage of employees who will be affected by the working time reduction measure.

In addition, the reduction in working time must comply with the provisions of art. 41 (3) letter f) of the Labor Code, meaning that the conclusion of an addendum to the employment contract as well as the agreement of the employee concerned by this measure becomes mandatory. Such addendum shall then be recorded in REVISAL, at the latest the day before the date of enforcement thereof.

In other words, the flexibility of the measure becomes very restrictive in its application.

Also remember that when reducing working time, the employer is not authorized to:

  • conclude new employment contracts for carrying out activities identical or similar to those carried out by employees whose working time has been reduced or to subcontract such activities; PLEASE NOTE, according to Law no. 282/2020, this ban applies to the positions or the type of activity targeted by the measure to reduce the working time of all agencies, branches or other secondary offices of the company, as defined by Company Law no 31/1990.
  • reduce according to art. 52 par. (3) of the Labor Code the working hours of the employees already covered by the measure;
  • grant bonuses and / or other supplements to the base salary to those who hold management positions;
  • allow overtime or telework beyond the reduced working hours for the employees covered by this measure;
  • initiate collective lay-offs.

 

Therefore, the modifications introduced by the GEO no. 211/2020, but especially by the Law no. 282 / 202O makes it more complicated for the employer to decide on the reduction of working time, given its obligations to (i) get the agreement of the union / employees thereupon, (ii) get the agreement and conclude an addendum to the employment agreement for each employee affected by this measure and (iii) record in the REVISAL its decision.

In addition, the new legal provisions bring no light on the ambiguous wording of GEO no. 132/2020 banning bonuses and/or other supplements to the base salary for management employees, without expressly explaining what “management structure means”: top management of the company and/or also the lower levels, such as for example the heads of departments, offices or teams. In this case, in our opinion, the employer will have to refer to the organizational chart of the company and to the organizational and operating regulations, which should (in principle) define the management structure of the company.

 

GRUIA DUFAUT LAW OFFICE

Attorneys at law (Paris & Bucharest)

www.gruiadufaut.com

 

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