Romania Employment Guide

Navigating Employee Termination in Romania: A Guide for International Employers

Terminating an employment contract in Romania requires strict adherence to a complex legal framework. As an international HR professional, understanding these regulations is crucial to ensure compliance and mitigate risks. The process must be handled meticulously, often involving key stakeholders and potential additional costs depending on the termination scenario.

Valid Grounds for Dismissal

Romanian labor law does not permit arbitrary termination. Employers must have a legally justified reason to end an employment relationship. Acceptable grounds for dismissal generally fall into categories related to the employee's conduct or the company's operational needs, such as disciplinary issues or redundancy due to restructuring.

It is critical to note that termination is strictly prohibited during specific protected periods. These include when an employee is on approved leave, experiencing temporary work incapacity, under medical quarantine, or during pregnancy (provided the employer is aware of the pregnancy). Proceeding with dismissal during these times can lead to significant legal challenges and penalties.

Understanding the Notice Period

The statutory minimum notice period in Romania is 20 calendar days. However, the exact duration can vary based on the specific reason for termination and the employee's length of service. Employers should carefully calculate this period to avoid procedural errors.

A key distinction in Romanian law is between the termination date and the employee's last working day. The termination date is the official end of the contract, which typically falls the day after the final day of work. For payroll purposes, employees are compensated for their last working day within the same pay cycle. For instance, if an employee's last day at work is June 29th, the official termination date would be June 30th.

Severance Pay Obligations

Unlike some jurisdictions, severance pay in Romania is not an automatic entitlement upon termination. It is only mandatory if stipulated in the individual employment contract, a applicable collective bargaining agreement, or if mutually agreed upon during the termination process. Companies like SailGlobal can assist international businesses in drafting compliant employment contracts that clearly outline such terms, preventing future disputes.

Case Study: Avoiding Common Pitfalls

Consider a multinational company that needed to restructure its Bucharest office. By failing to recognize that a key employee was on sick leave, they proceeded with a redundancy dismissal. The employee successfully challenged the termination in court, resulting in reinstatement and substantial compensation for the company. This case underscores the importance of rigorous checks for protected statuses before initiating any termination procedure.