Romania: Latest developments in working life Q3 2019

Changes to the laws governing the public pension system, occupational pension schemes and occasional labour activity , and labour protests in several sectors are the main topics of interest in this article. This country update reports on the latest developments in working life in Romania in the third quarter of 2019.

Changes to public pension laws

A new law for the public pension system was adopted in July after a long period of negotiation with the social partners. The law will be applied gradually until 2021, when it will enter into full force. The main provisions of the law are to:

• gradually increase the value of the pension point, starting from 1 September 2019
• take into consideration a greater number of income categories when determining the pension amount
• include time spent undertaking a master’s degree or doctorate in the contribution period
• eliminate discriminatory cases.

One of the stipulations of the new law, which is contested by the trade unions, is that it does not take into account periods when employers do not make social contributions. The trade unions argue that employees cannot control whether companies transfer the money or force the employees to do so themselves.^[1]

The government also approved a draft law for the regulation of the legal framework regarding the establishment of occupational pension schemes and occupational pension funds, including aspects related to their administration. This draft law will now be debated in parliament. The law transposes Directive (EU) 2016/2341 of the European Parliament and of the Council, and creates the conditions for obtaining an additional, distinct occupational pension that complements the other types of pensions granted in Romania.

Representatives of trade unions and employer organisations met continually in the social dialogue committee and made a series of observations and amendments with the aim of perfecting the draft law. These include the need to:

• specify the exact contribution of the employer and employee
• define the compulsory contributory period
• specify the employee’s minimum contribution to the occupational scheme.

• Ministry of Labour and Social Justice: Executivul a reglementat cadrul legal pentru înfiinţare,a schemelor şi fondurilor de pensii ocupaţionale

Rules on activities of non-permanent employees amended

An amendment to Law no. 52/2011 regarding the performance of occasional activities by ‘day workers’ (such as temporary workers, seasonal workers or casual workers) was also introduced in the third quarter of 2019. This amendment:

• added several activity fields in which day workers can perform occasional activities (for example, research and development activities, the growth of seedlings, artistic interpretation activities)
• extended the period during which a day labourer can perform activities for the same beneficiary to a maximum of 180 days a year, in the fields of vegetable growing, fruit growing, flower growing and others
• introduced the possibility that this activity can be performed for the benefit of a third party
• obliges the beneficiary to pay a lump sum of 10% of the national gross minimum wage to each day worker ^[2]

Labour protests in transport, energy and water sectors

The trade union of the employees of the National Company for Road Infrastructure Administration (CNAIR) organised a rally in Q3 2019. The union was dissatisfied with delays in the allocation of state funding and in the renegotiation of the collective labour contract, as well as the lack of wage increases. Negotiations with representatives of the Ministry of Transport were unsuccessful as of the end of the quarter. ^[3]

Workers from SCLR Brașov SA, a subsidiary of Romanian Railways for Passengers (CFR Călători), went on strike demanding the 15% wage increase that other workers in the railway sector had been granted. The protest started in Brașov, but spread to Galați and Bucharest. The workers gained the support of the National Union of Solidarity 2012 (SNS 2012), whose members went to Bucharest and settled the conflict with the managment of CFR Călători. ^[4]

Another strike took place at CIECH Soda Romania, a company owned by the Polish CIECH Group. Due to the high and constantly increasing price of industrial steam provided by the thermal power plant CET Govora, the Polish company decided to shut down the plant on 18 September 2019. The employees protested against this decision, supported by a few trade unions, and asked for the support of the local authorities. No possible solutions were found that would allow the workers to keep their jobs. The company offered the workers voluntary leave and about half of the 600 employees accepted this. ^[5]

Labour conflicts also occurred in a number of other companies (AQUAVAS SA Vaslui, RAAL and Cummins Generator Technologies Romania), most of them triggered by low wage levels, the renegotiation of collective labour agreements and the demand for wage increases. Work resumed after management promised that it would try to resolve the employees’ demands. Following the threat of collective redundancy, the management of Cummins succeeded in inducing the workers to reduce their claims for wage increases, from 20% to 6.5%. The trade unionists, however, did not accept the proposal of the management that under the agreement employees must work on weekends when needed – and negotiations are ongoing.

Outlook

A draft law was recently submitted to the senate, which proposed that the minimum wage amount received by employees should correlate with their professional training and education level. This will be achieved through minimum hierarchical coefficients. The aim is to guarantee that employees have a minimum form of protection when it comes to their income, while also maintaining worker motivation by avoiding flattening pay scales. The law will be debated in parliament in the near future.