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May 18, 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 Romanian legislative framework (the GEO no 132/2020) setting up the famous German scheme “kurzarbeit”, which allows employers to reduce, under certain conditions, the working time of employees and employees affected by this measure to benefit from an indemnity paid by the State, was subject to significant changes under the Law no.58 / 2021, published in the Official Gazette no.345 of April 5, 2021.

Since entering into force on August 10, 2020, the GEO no 132/2020 has undergone so many modifications that the implementation of the legal provisions has become problematic for companies, especially due to the ambiguity of the legislative texts. In this context, the Parliament adopted the Law no 58/2021 providing certain clarifications and, at the same time, simplifying the bureaucracy incumbent upon employers.

 

Here below there’s an overview on the main changes brought by the Law no 58/2021:

 

1) Reduction of working time

 

According to the new legal provisions, the employer may reduce working time of the employee (daily, weekly or monthly), provided for in the employment agreement, up to maximum 80%, for a period of at least 5 working days, during the 30 calendar days from the first day of the implementation of the working time reduction measure.

Before the entry into force of the Law no. 58/2021, the employer could reduce the employee’s working time by up to 50%, for a period of at least 5 working days per month.

Anyway, from now on, in order to be allowed to reduce working time, the employer must get the agreement of the union or, in the absence thereof, the agreement of the employee’s representatives.

Pursuant to the law, the union authorized to approve the measure of reduction of working time is the structure having the right to participate in collective bargaining, as provided for by the Law No. 62/2011.

It should also be noted that the former regulations did not provide for the obligation to get the agreement of the union by the employer. This obligation was though implied if we look at the documents that the employer was required to submit to the authorities when wanting to benefit from financial assistance offered from the State.

Employees affected by the reduction in working time measure are entitled to compensation up to 75% of the difference between the gross salary provided for in the individual employment agreement and the basic gross salary corresponding to the hours actually worked. This compensation supplements the salary due, calculated over the actual working time.

 

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 year preceding the declaration of the state of alert, namely 2019.
  • In the case of NGOs or self employed persons, sole proprietorships and family businesses, the decrease is linked to the income earned.

The new law also provides for the possibility of benefiting from this support system offered by the State for companies created between January 1 and March 15, 2020 and having at least one employee. In their case, the 10% decrease in turnover is compared to the turnover of the month preceding the application of the reduction of working time measure.

 

3) Formalities and restrictions

 

Information / communication of the decision to reduce working time

The law no. 58 / 2021 maintains the employer’s obligation to inform each employee concerned, by means of a decision, of the working time reduction measure, at least 5 days before the entry into force of this measure.

However, from now on, the employer is no longer required to get the employee’s consent, but the decision shall be communicated to the employee via the usual means of communication implemented and the document handed over to the employee shall provide for the work schedule, the daily distribution thereof, as well as the salary rights.

Likewise, the employer is no longer bound to get the employee’s agreement for the reduction of working hours, pursuant to the provisions of art 41 (3) let. f) of the Labor Code.

Another novelty introduced by the law no. 58/2021 is the possibility to modify, for grounded reasons, the work schedule of the employee, whenever necessary and with the agreement of the union or of the employees’ representatives.

If the modification of the work schedule is determined by an increase in the activity of the employer that requires additional staff or if it is necessary to replace an employee who is unable to abide by his work schedule, the modification of the work schedule is to communicated at least 24 hours before the application thereof.

 

Granting of bonuses

 

The law brings much needed clarification regarding the granting of bonuses to the management structures of the company.

Thus, the employer may not grant bonuses or other revenues to persons who ensure the management and / or administration / management (“administrarea”) of the company, according to Law no. 31/1990, in addition to the basic salary provided for in the employment agreement.

Such bonuses can be granted only after the period of application of the measure of working time reduction ceases.

On the other hand, the legislation now provides that, if the budget of expenses with the personnel allows it, the employer may supplement the amount of the compensation paid by the State with sums accounting for the difference to reach the level of the base salary corresponding to the job held by the employee. 

 

Interdictions for the employer

When reducing working time, the employer is not allowed to:

 

  • conclude new employment agreements for performance of activities identical or similar to those provided by the employees whose working time has been reduced or to subcontract the activities carried out by them, a ban that applies for the agency, branch or other secondary offices of the company, as defined by Company Law no 31/1990 where the measure was applied; According to the new legal provisions, this ban does not apply to positions where it is necessary to replace employees whose contracts have ceased by law (art. 56, Labor Code) or as a result of resignation (art. 81 of the Labor Code) or according to art. 61 Labor Code (layoff for reasons attributable to the employee);
  • reduce according to art. 52 par. (3) of the Labor Code the working hours of the employees already covered by the measure;
  • allow overtime or telework beyond the reduced working hours for the employees covered by this measure
  • initiate collective lay-offs.

Finally, the Law 58/2021 simplified the clearance procedure that an employer must perform in order to benefit from the aid offered by the State. Thus, for example, the obligation to submit, among other things, the accounting balance sheet has been replaced by the obligation to file a sworn statement.

In practice, the facility offered to employers to reduce working time will certainly have a positive impact in certain fields of activity, but its applicability remains limited to the period of the state of alert and the next 3 months following to the cessation of the state of alert, without taking into account the fact that the recovery of a company is often much longer.

 

GRUIA DUFAUT LAW OFFICE

 Attorneys at law (Paris & Bucharest)

www.gruiadufaut.com

 

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