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We Have a New Social Dialogue Law. Significant Changes of Interest to the Labor Market

We Have a New Social Dialogue Law. Significant Changes of Interest to the Labor Market

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After lengthy debates in the Parliament, the new Social Dialogue Law, i.e. Law no. 367/2022 was published in the Official Gazette no. 1238/2022 on December 22, 2022, the lawmakers opting to expressly repeal the “famous” Law no. 62/2011 with the entry into force of the new legislative framework, which is not at all surprising considering the many changes brought on by the new law.

Law no. 367/2022 entered into force on 25 December 2022, imposing new obligations on many Romanian employers, as outlined below.

We will refer first to what is arguably the most frequent form of representation, namely the “employees’ representatives”. In this area, lawmakers have chosen to extend the range of scenarios in which the representation of the employees’ interests is permitted, the new law stating that “when the employer has minimum 10 employees/workers and no trade union, the interests of the employees/workers may be promoted and defended by their representatives, chosen and mandated specifically for this purpose, pursuant to the law”. This is a notable change compared to the previous situation where employees’ representatives could be elected only in entities with minimum 21 employees. As for the conditions for the valid election of representatives, the law maintains the solution that is already being applied in practice, setting out that “employees/workers’ representatives are elected by the vote of at least half plus one of the total number of employees/workers in the respective unit”, which is a promising step forward from the provisions of the Labor Code, which (still) require the vote of at least half of the total number of employees (which could lead to tie-vote situations, difficult to handle in practical terms).

Furthermore, while the legislative framework has been up to this point extremely concise with respect to the way in which employees’ representatives are elected, the new Social Dialogue Law marks an important “step forward” and extensively regulates matters relative to the organization of such elections, in a dedicated chapter. For instance, the law also makes clear that employers are prohibited from interfering in the election of the employees’ representatives, unless the employer receives a specific request from the employees to facilitate the election of the employees’ representatives – this particular case in which the employer’s involvement is permitted is simply a recognition of the practice in the field, where most employers get involved in facilitating the organization of elections, and what changed is the fact that this involvement cannot theoretically take place ex officio and will need to be requested by the employees.

The new law also includes important (and useful) clarifications and guidelines on the number of employee representatives, offering a practical solution in cases where the employer and the employees fail to reach an agreement on this issue. For instance, the law regulates the situation where, in the absence of an agreement between the employer and the employees, the number of elected employees’ representatives cannot be more than 2 representatives for employers with less than 100 employees, or 3 representatives for employers with 101 to 500 employees. It remains to be seen what the phrasing “the number cannot be more than” will mean in practice. At first sight it seems that, in the absence of an agreement, employees will be free to opt for exactly this maximum number of representatives. The last significant change we want to refer to on the issue of employees’ representatives arises from the more or less specific regulation of the notion of conflict of interest in this area. The law expressly sets out that “Persons with management roles who are responsible for representing the administration in relation to employees/workers or who participate in the enterprise’s decision-making process at unit level, cannot be elected as representatives of the employees/workers”, but there are no definitions for these notions, and therefore it is up for social partners to interpret their meaning.

Why are employees’ representatives important? In addition to the duties set forth by law (not to be neglected), employees’ representatives have the right to conduct collective negotiations, and the new legislative changes make collective bargaining mandatory for all employers with at least 10 employees (instead of 21, as until now), obviously without making the conclusion of a collective bargaining agreement mandatory. Aspects relative to the way in which collective bargaining takes place and to the collective bargaining agreement are of course extensively regulated by the new Social Dialogue Law and must be carefully examined as they introduce a set of changes, e.g. the fact that the collective bargaining process cannot generally exceed 45 days (compared to 60 up until now), or include new information the employer must provide in collective bargaining situations.

In the area of collective bargaining agreements, possibly one of the most surprising changes is the reintroduction of the possibility of having a collective bargaining agreement at national level, which is now expressly regulated by the new law. In other words, we can expect in the following years to have a new CLA concluded at national level, as was the case before the entry into force of the previous Law no. 62/2011.

On the same subject, the law sets out, as recommendation, several contractual elements that could be included in the collective bargaining agreement, namely the minimum coefficients for creating a hierarchy based on categories of employees/workers, measures adopted on the counselling and professional evaluation of employees/workers, measures aimed at striking a balance between family life and professional objectives, working time and rest time, provisions on working conditions and employees/workers’ health and safety at work, and methods of informing/consulting the employees/workers. Although these elements do not constitute the minimum mandatory content of a collective bargaining agreement, it is not excluded for employers to be required to incorporate them in collective bargaining agreements following “discussions” held during negotiations with social dialogue partners, especially considering that they are now expressly mentioned in the legislative framework and attract attention.

As for trade unions, we note that the new Social Dialogue Law reduces the percentage required in order for a trade union to become representative and sets forth that a trade union can be representative if it includes at least 35% of the employees/workers engaged in an employment/work relation with the respective company (compared to minimum 50%+1, as was the case up until now), thus creating, at least in theory, an interesting possibility, namely that of having in the same unit two trade unions representing at least 35% of the employees.

Moreover, the conditions for establishing a trade union have been “relaxed” so that a trade union may be created by at least 10 employees from the same unit or 20 employees from different units, but working in the same field, and trade union membership has been extended, including to unemployed persons or independent workers.

Among the new elements of high importance that are worth mentioning, we note several provisions related to employees’ information and consultation. Thus, a new legislative concept has been introduced, namely an information meeting for employees – under the new Social Dialogue Law, for companies with no trade unions, the employer must permit, at least once a year, the organization of a public meeting to inform employees/workers of their individual and collective rights, at the request of the trade union federations active in the collective bargaining sector in which the respective unit operates, inviting representatives of these federations to participate. However, we believe that the meeting would not be mandatory in the absence of an express request by the trade union federation operating in the applicable sector. Yet, we dot exclude the possibility of employees requesting anyway in practice such meetings, based on other general legal provisions.

In addition to the general provisions of the law which defines the general framework for employee information and consultation (Law no. 467/2006), the new Social Dialogue Law sets out an obligation to inform and consult on the recent and potential evolution of the activities and economic situation of the company, establishing a set of rules in this area, for instance the fact that the employer will initiate the information and consultation process after the release of the company’s financial statements for the previous year. Furthermore, the law sets out the obligation to inform and hold consultations also with respect to decisions that can lead to significant changes in the way in which the work is organized, in contractual or employment relations, including but not limited to: business transfers, acquisitions, mergers, collective dismissals, closures of production facilities, etc., establishing for instance that the employer will initiate and finalize the information and consultation process prior to implementing the respective decisions to allow the employees’ representatives to submit proposals in order to protect the rights of employees/workers. Moreover, the law established an extremely important right for the scenario in which employees/workers consider that their jobs are threatened, in which case the information and consultation process will start at their written request.

Finally, we note that there have been significant legislative developments on other issues as well, for instance with respect to collective work conflicts (which can now arise more often/in more situations), and the sanctioning regime imposed by the new Law no. 367/2022 (providing for harsher sanctions, both from a contraventional and criminal law perspective). These developments along with the other changes introduced by the new Social Dialogue Law call for an in-depth analysis of the new legislative framework, which can give rise to a new dynamic of the social dialogue on the Romanian labor market.

By Roxana Abrasu, Partner, Daniel Stancescu, Associate, NNDKP

Romanian Knowledge Partner

Țuca Zbârcea & Asociații is a full-service independent law firm, employing cross-disciplinary teams of lawyers, insolvency practitioners, tax consultants, IP counsellors, economists and staff members. It also operates a secondary law office in Cluj-Napoca (Romania), and has a ‘best-friend’ agreement with a leading law firm in the Republic of Moldova. In addition, thanks to the firm’s dedicated Foreign Desks, the team provides the full range of services to international investors seeking to gain a foothold or expand their existing operations in Romania. Since 2019, the firm and its tax arm are collaborating with Andersen Global in Romania.

Țuca Zbârcea & Asociaţii is providing legal services in every aspect of business, covering all major areas of practice: corporate and M&A; litigation and international arbitration; corporate tax; public procurement; TMT; employment; insurance; banking and finance; capital markets; competition; healthcare and pharmaceutical; energy and natural resources; environmental; intellectual property; real estate; regulatory legal services.

Țuca Zbârcea & Asociaţii is a First-Tier law firm in all international legal directories and a multiple award-winning law firm both locally and internationally. It received the CEE Deal of the Year Award (DOTY Awards 2021) and the Law Firm of the Year Award: Romania (IFLR Europe Awards 2021). 

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