Romania: Recent Rulings By Romania’s High Court Clarify Thorny Issues In Labor And Employment Law

Last Updated: 16 February 2015
Article by Anamaria Corbescu and Tiberiu Csaki

In Romania, the inconsistent interpretation and application of legal provisions by the courts have resulted in uneven and confusing case law and, in general, in an increased degree of uncertainty with respect to the predictability of litigation outcome. Under the Romanian legal system, the High Court of Cassation and Justice (High Court) has final authority in unifying divergent case law through a special type of ruling—one that is issued following a so-called "appeal in the interest of law" ("recurs in interesul legii") filed by the country's General Prosecutor to restore legal certainty if, as the jurisprudence around existing legal provisions evolves, different opinions or interpretations of the lower courts are reported.

Labor law has finally made it to the agenda of Romania's High Court, which has recently ruled on three important topics, outlined below. In doing so, the High Court has created a binding judicial precedent which sets out the mandatory rules for any subsequent cases involving identical or similar situations, trialed in front of the High Court itself or in lower courts in the judicial hierarchy.

The capacity of unions to bring court actions on behalf of their members

Through Decision no. 1/2013, the High Court has shed light on a matter that initially arose under the previous law on unions, Law 54/2003, as amended, now replaced by Law 62/2011 on the Social Dialogue, which, even if it brought about great reforms, failed to clarify this issue. There were two different opinions in the jurisprudence regarding the capacity of unions to bring a direct court action in connection with the rights and interests of its members. One opinion says that the union itself did not have litigation standing in its own name and it could only represent its members, to the extent to which union members themselves launched a court action. Another opinion says that unions were allowed to initiate a court action even in the absence of a direct mandate from its members, to defend their rights and interests.

The latter opinion has prevailed and been acknowledged by the High Court, which has thus consecrated the independent standing of unions in court. As a result, unions can initiate litigation to the individual or collective benefit of their members.

It is important to note that union members retain the so-called "litigation disposition rights" at all times, which means that they may withdraw the claim and thus stop the trial if they choose to do so. The court which has jurisdiction with respect to the union's headquarters is invested to rule on the case.

A court's possibility to change a disciplinary sanction imposed by an employer

Before the High Court's Decision no. 11/2013, the dominant view of the courts hearing challenges brought to disciplinary sanctions by disgruntled employees, was that the disciplinary prerogative belonged solely to the employer and, as such, judges could only rule with respect to the legality and soundness of the disciplinary investigation process, but not with respect to the actual sanction imposed. If this disciplinary investigation process had been carried out in violation of the applicable legal rules, a court would declare it void and render it without effects, but it could never change the disciplinary sanction imposed on the employee, as this would equate to a substitution into the employer's position and rights.

In its decision, the High Court stated that the disciplinary prerogative of employers end at the point where the oversight powers of the courts begin, so the courts have the power to not only control the legality of the disciplinary process, but to materially change its outcome as well. The High Court ruled that, under the pre-existing dominant interpretation of the courts' powers, the employer's disciplinary prerogative would be absolute and discretionary, and that courts should be allowed and able to check if the sanctions are appropriate, tailored to the employee's track record and work history and, in general, adequate considering a particular disciplinary breach.

We note that, under Romanian labor law, there is a range of disciplinary sanctions that may be applied by employers, depending on the seriousness and circumstances of the breach and the employee's record, as follows: (i) written warning; (ii) demotion of the employee up to 60 days with a corresponding salary reduction; (iii) 5 to 10 percent salary reduction for one to three months; (iv) 5 to 10 percent salary reduction and/or, as applicable, reduction of the management compensation for one to three months and (v) dismissal.

The timeframe to be followed by employers when taking disciplinary action against their employees

According to the Romanian Labor Code, employers may take disciplinary action against employees only upon following a prescribed procedure. The procedure includes an investigation phase, within 30 calendar days of when the breach is acknowledged by the employer (subjective moment), but not later than six months from the occurrence of the alleged breach (objective moment). The jurisprudence was not uniform in identifying the subjective moment from which the 30-day term is calculated. Some courts considered that the subjective moment is the initial moment when the employer is first alerted (usually, by another employee or a third party, through a note, a written statement, letter, etc.) that a potential disciplinary breach could have occurred, while others considered that a formal and meaningful acknowledgement occurs only upon conclusion of the investigation phase by the employer's representatives.

The latter position was deemed more accurate by the High Court which stated, through Decision 16/2012, that at the initial moment when the employer is first alerted, it is not certain yet if the deed allegedly committed by an employee amounts to a disciplinary breach (with the consequence that the employee is still presumed not guilty at that time) since the investigation phase has not been completed yet. As such, the High Court has confirmed that, in fact, employers have 30 days from the moment when the investigation commission issues its final report determining if a breach has been committed to sanction the responsible employee.

However, we caution that many collective bargaining agreements and company-level internal regulations may refer to the initial alert of the employer as being the subjective moment from which the 30-day deadline starts to run. Although it could be argued that the ruling of the High Court has full legal force and prevails over conflicting provisions in such documents, going forward, a rewording of the relevant sections in collective bargaining agreements and company-level internal regulations may be advisable.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions