Background for Romania

Between 2012 and 2022, there was a substantial increase in gross domestic product (by 48.02%) in Romania, while the EU27 average increase was much lower (15.29%). During this time, unemployment rates for all categories decreased slightly. The total unemployment rate in 2022 was 5.6%, below the EU average of 6.2%. The overall employment rate increased by 9.2 percentage points during this period, reaching 66.8% in 2022. The highest growth rate was registered for men’s employment (9.5 percentage points), 0.8 percentage points more than for women’s employment (8.7 percentage points).

The main law in the field of labour legislation is the Labour Code (Law No. 53/2005), modified in 2011 to increase flexibility in labour relations.

Since 2011, the Labour Code has been amended several times. In August 2017, in an attempt to combat undeclared work, the government amended the Labour Code to include definitions of working situations to be considered undeclared work. According to the new provisions, undeclared work now covers the following: employing a person without submitting an employment report to the general registry of employees no later than the day before the start of the activity; employing a person without having concluded a written employment contract no later than a day before the start of the activity; employing a person when their individual employment contract is suspended; employing a person to work more hours than those stipulated by a part-time employment contract. The work of an employee outside the work schedule established under an individual part-time employment contract has ceased to be sanctioned as a mere failure to comply with the provisions on overtime (previously, the sanction was a fine of RON 1,500 to RON 3,000 (€301 to €603 – all currency conversions in this profile are valid as of 12 August 2024). Instead, it is classed as undeclared work (sanctioned with a fine of RON 10,000 (€2,010)).

Since August 2017, each employer has been obliged to keep copies of the individual employment contracts for employees in their workplace. The civil fine for failure to comply with this legal provision is RON 10,000 (€2,010).

The Social Dialogue Law (Law No. 62/2011), which had been strongly criticised by trade unions since its adoption in 2011 for weakening social dialogue, was amended and replaced with a new law, adopted in December 2022. The new Social Dialogue Law (Law No. 367/2022) enhances the powers of trade unions, changes the representativeness criteria for trade unions, introduces new provisions for collective bargaining in order to increase the coverage at both company and sectoral levels and relaxes the conditions for industrial actions and strikes.

Law No. 367/2022, stating that the living wage (monthly minimum consumption basket for decent living) is the main criterion for setting the minimum wage, became effective in August 2020. The addendum to the law provides a structure of categories for monthly household expenditure. However, the government did not apply the law when setting the minimum wage for 2022, despite facing criticism from trade unions.

Social dialogue in Romania only became effective after the country’s transition to democracy in 1989. Before 1989, although trade unions were legally allowed, in practice they functioned as an extension of the Romanian Communist Party and the state. After 1989, the privatisation of state-owned companies jeopardised the jobs of thousands of workers, resulting in a rather conflict-driven type of industrial relations. Despite the trade unions’ opposition to the privatisation process, they did not obstruct it. The restructuring and privatisation led to a massive decline in trade union membership. Once the transition period and the deindustrialisation process came to an end, industrial relations became more consensus oriented. Collective bargaining was legally allowed at all levels: national, sectoral and company. The national and sectoral trade unions had stronger negotiation capacities than the company-level unions, which often lacked the necessary know-how and human resources. These circumstances led to a situation in which the national and branch-level collective agreements were decisive for the negotiation of wages at company level.

In 2011, social dialogue legislation was changed, resulting in a new law (Law No. 62/2011) that abolished national collective bargaining and made sectoral bargaining almost impossible. The abolition of national-level collective bargaining in 2011 meant that approximately 1.2 million employees – working in 450,000 companies with less than 21 employees – were not covered, because for these companies collective bargaining was not compulsory by law. Collective bargaining at company level became more important in this context, but company-level trade unions still struggled due to a lack of adequate expertise and the stringent representativeness criteria imposed by law. According to the data provided by the Ministry of Labour and Social Solidarity, 4,397 collective agreements were concluded in 2021 and 5,344 were concluded between January and October 2022. The new Social Dialogue Law, adopted in December 2022, is expected to increase collective bargaining coverage at both company and sectoral levels.