Collective bargaining in Romania

The Social Dialogue Law of 2011 (Law No. 62/2011) abolished collective bargaining at national level. The new legislation also replaced branch-level collective bargaining with sectoral collective bargaining. The new legal framework decentralised collective bargaining by increasing the importance of collective agreements at company level. Between 2011 and 2018, collective bargaining was conducted mainly at company level, but it was not mandatory to reach a collective agreement as a result of the bargaining.

The new Social Dialogue Law (Law No. 367/2022) provides a new framework for national, sectoral and company-level collective bargaining. The possibility of reaching national collective labour agreements is reinstated, but the law stipulates that they cannot include clauses related to national minimum wages, as was the case until 2011. The agreements can, however, include minimum wage coefficients by occupational standards.

The new law makes collective bargaining compulsory in companies with at least 10 employees, as well as at sectoral level. Both trade unions and employer organisations can initiate negotiations. The law permits employer federations and corresponding trade union organisations that are not signatories of a collective agreement concluded at sectoral level to join the agreement on the basis of a written notification.

After the 2011 legislative change, only a few sectoral collective agreements were concluded at sectoral level between 2012 and 2022, in contrast to the eight sectoral collective agreements concluded in 2010 alone. A collective agreement for the public healthcare sector was concluded in 2019, valid from 2019 to 2021. A collective agreement for the pre-university education sector was concluded in 2022. In addition, 4 multi-employer collective agreements were concluded in 2021 and 11 were concluded in 2022.

Collective wage bargaining coverage of employees

Sources: Eurofound, European Company Survey 2013/2019 (including private sector companies with establishments with more than 10 employees (NACE codes B–S); the question in the survey was a multiple choice question and multiple responses were possible); Eurostat [earn_ses10_01], [earn_ses14_01], [earn_ses18_01] (including companies with more than 10 employees (NACE codes B–S, excluding O), with a single response for each local unit); OECD and AIAS, 2021; Labour Inspectorate

The decentralisation of social dialogue in 2011 led to the concentration of collective bargaining at company level. This situation was still apparent in 2022, but should be changed by the new Social Dialogue Law. Previous data indicated that, following the abolition of national collective bargaining in 2011, collective bargaining coverage declined from almost 100% in 2010 to approximately 35% in 2013. Data from the Labour Inspectorate indicate that 2,113,237 employees were covered by an active collective agreement in 2020, indicating a collective bargaining coverage of 32%.

Number of collective agreements at company level (national data)

Source: Ministry of Labour and Social Solidarity and Labour Inspectorate.

After the 2011 reform of the legislative framework for social dialogue, Romania moved from a centralised to a decentralised collective bargaining system. Before 2011, national collective bargaining agreements were very important, as their provisions were mandatory for the lower levels of the bargaining system (branch, sector and company). In theory, collective bargaining at sectoral level should play an important role, as the provisions of sectoral collective agreements are mandatory (under specific legal conditions) for all the companies in the relevant sector. However, in practice, sectoral collective bargaining is blocked. As a result, collective bargaining at local level (at the level of companies and groups of establishments) is more important.

The adoption of the new Social Dialogue Law at the end of 2022 was expected to change this situation, by making collective bargaining compulsory at both company and sectoral levels and by reinstating collective bargaining at national level.

Levels of collective bargaining, 2022

Articulation

The clauses of collective agreements signed at sectoral level are mandatory for all the employees of the companies in the relevant sector. However, until December 2022, a collective agreement was considered sectoral only if the number of employees in the companies affiliated to the signatory employer organisation accounted for more than half of the total number of employees in the relevant economic sector. If this condition was not fulfilled, the collective agreement was registered as an agreement at the level of a group of establishments.

The new Social Dialogue Law reinstates collective bargaining at national level. The clauses of national collective agreements apply to all employees and must be included in the collective agreements concluded at company or sectoral level.

According to the new Social Dialogue Law, a bargaining round can be initiated by either trade unions or employer organisations at least 60 days before the collective agreement in force expires. Collective bargaining cannot last more than 45 days, and it is not mandatory for a collective agreement to be reached.

In the public sector, the bargaining starts, as a rule, in the fourth quarter of the year, when the government adopts its decision regarding the minimum wage for the following year.

The new Social Dialogue Law provides the framework for automatic coordination among different bargaining levels. The clauses negotiated at the highest level are minimal and automatically applicable to all lower levels by extension. In addition, a form of vertical coordination is ensured by the implicit coordination of wage demands by trade union federations and sectoral employer federations, who are entitled by law to take part in collective bargaining at company level and even to conclude collective bargaining at company level in certain situations.

Since December 2022, national collective agreements have been automatically applicable to all employees, and sectoral collective agreements have been automatically applicable to all employees in the sector. The new Social Dialogue Law also provides that employer organisations/companies and corresponding trade union organisations that are not signatories to collective agreements concluded at sectoral level or for groups of enterprises can join these agreements.

There were cases between 1999 and 2011 when branch-level collective agreements included derogations, allowing companies in economic and financial difficulties to pay below the threshold.

The collective agreements for the ferrous, non-ferrous and refractory materials industries, for example, stipulated that for limited periods ‘the minimum wage may be reduced, but never [to] below 80% of the value initially bargained upon’.

Since 2011, some collective bargaining agreements at establishment level have included clauses that allowed companies to pay less than the statutory minimum wage. This derogation is permitted if the company conducts a financial and economic analysis showing that it is in financial difficulty.

When a collective agreement expires, the social partners have the right to extend it by 12 months. Extension is permitted only once; afterwards, renegotiation is the only available option. Both employers and trade unions can initiate collective bargaining; this must be done at least 60 days before the collective agreement in force expires. The collective bargaining should not last more than 45 days. If the social partners cannot reach a consensus and conclude a collective agreement within this time frame, the trade union organisation has the right to start a labour conflict.

The most important issues in collective bargaining in Romania are wages and payment for overtime. Issues such as lifelong learning and gender equality are not as important.