Changes to the Labor Code: What employers need to pay attention to after the enactment and publication of the new provisions
On October 19, 2022, Law 283/2022 was published in the Official Journal of Romania, introducing probably the largest number of changes made to the Labor Code in recent years, including several substantial amendments and additions highly relevant to employers. Thus, employers must take appropriate action to implement, and ensure immediate compliance with, these changes, the law coming into force in 3 days from its publication.
The purpose of this article is to outline the most significant changes requiring immediate action by employers.
Thus, the new law provides for changes in the minimum mandatory content of the individual employment agreement and in the elements that must be communicated to the employee before being hired. Among the most relevant new aspects in this respect, we mention the fact that, besides the obligation to indicate the probationary period, it is also mandatory to specify the applicable conditions (i.e., the conditions that employees must fulfil to pass the probationary period, which need to be specified in advance by the employer).
Another new aspect is the fact that the base salary and its components (e.g., different benefits, bonuses, etc.) must be reflected separately, which is an express requirement (it will no longer be possible for the salary to be reflected as a whole, with all components already incorporated); still on the issue of salary, the law sets forth that the method of payment (cash/bank transfer) must be expressly specified in the individual employment agreement. Furthermore, the agreement should state, among other things, the conditions for working extra hours or for compensating for overtime (though one may argue that the previous agreement structure already included this requirement).
The most important change in this area, with a potentially significant impact on the employers, could be the obligation to reflect in the content of the individual employment agreement that the employer is covering the cost of the employee’s private medical insurance, of additional contributions to the optional or occupational pension scheme, in accordance with the conditions laid down by law, as well as any other rights granted by the employer, at their discretion, when such rights constitute cash benefits offered or paid by the employer to the employee in light of the latter’s professional activity, as appropriate. In other words, it would be possible to construe this as an obligation of the employers to directly include these financial benefits in the individual employment agreement, which could significantly limit their flexibility in granting or withdrawing such benefits (any changes in the agreement require, as a general rule, both parties’ consent, in the form of an addendum to the agreement).
Another notable change comes from the fact that the law clarifies the possibility of employees having more than one individual employment agreement, and how to accommodate this in practice. Thus, the law clarifies that an employee has the right to work for different employers or the same employer, based on individual employment agreements, provided there is no overlap in schedule (this last wording is an important clarification). Also, the law expressly prohibits the unfair treatment of the employee exercising this right.
As far as rights are concerned, the Labor Code establishes a new right of the employee, namely the right to request to be assigned to a vacant position offering more favorable working conditions, if the employee passed their probationary period and has worked for the same employer for minimum 6 months. However, we see this right as a mere vocation of the employee, the employer being under no obligation to accept the request (still, we draw your attention to the fact that exercising this right could lead, in practice, to interesting situations, to say the least).
Among the new amendments we find the additional provisions included in the Labor Code regarding the rights of certain employees whose employment agreement has been suspended. Thus, it is expressly stated that the rights of the employees who have been suspended at their request (e.g., for reasons related to childcare leave, accommodation leave, paternity leave, etc.), and which they acquired before the relevant leave was granted, will be retained by the employees throughout the period of leave, or absence. We note that the wording “will be retained throughout the leave period” could give rise to different interpretations and should be carefully assessed by each employer (including by reference to the EU directive regulating this matter).
Following the new amendments, employers could expect, among other things, new potential requests from dismissed employees to receive a detailed account of the reasons for their dismissal (in addition to the information provided in the actual dismissal decision). This comes from the fact that a new wording was inserted in the Labor Code, in Art. 62 para. (4), which specifies that the employees who believe to have been dismissed for exercising the rights covered by specific articles of the Labor Code (e.g., lack of information about the elements describing the employment relationship or carer’s leave etc.) may ask the employer to provide, aside from the dismissal decision, a written account of the reasons underlying the dismissal decision.
Still on the subject of potential requests to which employers must respond, we note that employees may request a personalized work schedule (for instance, to work 7 hours on Monday, 9 hours on Tuesday, etc.), which was possible even before. What changed is that the employer will need to justify in writing their refusal, within a 5-day term from receiving the request.
One of the most discussed changes refers to the introduction of the carer’s leave. Thus, under the new provisions, the employer has the obligation to allow the employee to take carer’s leave to provide personal care or support to a relative, or to a person living in the same household as the employee, who is in need of care or support for a serious medical reason. The leave period is of five working days per calendar year, and the leave is granted based on a written request submitted by the employee. Of course, internal policies can establish a longer period for this type of leave.
Also, the Labor Code sets forth an employee’s right to be absent from work in unforeseen circumstances, determined by an urgent family matter caused by an illness or accident requiring the employee’s immediate leave. The condition for making use of this right is for the employee to notify the employer beforehand and recover the entire period of absence, to cover all normal work hours (based on a schedule mutually agreed upon by the employer and employee). The Labor Code also establishes a time limit for such right, i.e., no more than 10 working days in a calendar year. But, of course, employers are free to accept a longer period, is they wish so.
Last but not least, we underline the fact that employers could be required to update their internal regulation since the Labor Code includes two new chapters that must be incorporated in the minimum mandatory content of the internal regulation, one related to the rules on giving notice (of termination) and one with information on the general employee training policy (if there is one). Another new aspect concerning the internal regulation is the express stipulation of the obligation to inform employees about the internal regulation on their first day at work (which is just a legislative acknowledgement of employment market practices). Moreover, to keep up with technology developments, employers are permitted to inform employees about the internal regulation in electronic form, provided that the document may be accessed, stored and printed by the employee.
We outlined above only the key changes made to the Labor Code. The new elements are significant and should be carefully analyzed by each organization to see what measures they should take, on a case-by-case basis. It remains to be seen how all the changes brought by Law no. 283/2022 will be implemented in practice, some of them posing serious challenges from a practical (and even logistical and financial) perspective to employers, who must find ways to adapt to the new rules, including with respect to their internal flow and various internal tools that need to be updated (starting with the individual employment agreement and internal regulation/policies).