Social assistance programme for areas affected by collective redundancies

In April 2003, Romania's National Agency for Labour Force Employment launched a Social Assistance Programme - consisting of active and passive labour market policy measures - for areas heavily affected by collective redundancies resulting from restructuring and privatisation. The aim is to achieve the redeployment/outplacement of at least 31,800 people through joint social partner actions.

Romania is currently facing large-scale redundancies as a result of the restructuring, reorganisation and privatisation of state-owned enterprises. In line with the government’s Emergency Ordinance No. 8/2003 regarding incentives for such restructuring, and given that under the new Labour Code (introduced adopted by Law No. 53/2003) such workforce reductions are to be addressed in a different manner than in the past, a plan has been developed to overcome the social tensions and difficulties that might arise from the forecast redundancies. A Social Assistance Programme (Program de Acompaniament Social, AS) was thus launched on 14 April 2003, envisaging a better activation of local development opportunities; 13 of Romania’s counties (out of a total of 41) are to be affected.

The AS programme is an outcome of a partnership between the National Agency for Labour Force Employment (Agenţia Naţională pentru Ocuparea Forţei de Muncă, ANOFM) and its French counterpart, the National Employment Agency (Agence Nationale Pour l'Emploi, ANPE). Romanian experts are now selected for training at ANPE. The innovation is that, under the AS programme, these experts are to become local project managers, with wide-ranging responsibilities including:

  • monitoring all the employment services supplied;
  • mobilising local social partners and 'stakeholders' into community working groups aiming to identify the most viable solutions in order to invigorate local labour markets; and
  • designating and training special intervention teams.

According to the legal framework, once the collective redundancies start, ANOFM will provide both passive and active measures for each worker whose employment contract is ended as a result of the workforce-reduction process.

The passive measures mainly consist of unemployment benefits and complementary incomes for each redundant person - according to Law No. 76/2002 regarding the unemployment insurance system and the promotion of employment and Government Emergency Ordinance No. 8/2003, these are to be granted for a period of 13-17 months, depending on the duration of previous employment, and will result in a total sum of up to the national monthly average wage as registered in January 2003. An additional payment amounting to two months of national average wages is to be granted immediately after redundancy.

A wide range of active measures is to be implemented as well – for which ANOFM will allocate ROL 1,211.67 billion, 27.2% of the unemployment budget for the whole country - resulting in the redeployment/outplacement of at least 31,800 people. The details are set out in the table below.

Active labour market measures to be implemented under the Social Assistance Programme in 13 counties
Type of active measure Number of people to be replaced/outplaced ANOFM funding (ROL billion) Comments
Job mediation services 19,300 (No special funding needed) -
Vocational retraining 2,450 31.37 Inside the company or through short training courses
Counselling and assistance services 500 37.47 Granted to stimulate unemployed people to start small private businesses and self-employment
Preferential credits scheme 1,600 381 (almost 34% of total amount provided in the national unemployment insurance budget for this measure) Particularly designed for small and medium-sized enterprises that will create new jobs for unemployed people
Promoting labour force mobility 450 34.09 This means granting a payment equal to two months' gross national minimum wages to unemployed people who accept a job more than 50 kilometres away from home, or seven months' minimum wages for those who change their residence for these reasons
Subsidies for creation of jobs for unemployed people with specific problems (ie aged over 45 years or only bread-winner for their families) 3,100 507.53 In the first 12 months following the creation of such a job, the employer will receive a subsidy equal to the national minimum wage.
Temporary employment programmes 4,400 220.21 Launching communities’ public works and 'activities of local interest', with ANOFM supporting the labour cost

Additional funding and services will be supplied by making use of existing programmes. For example, ROL 12.53 billion will come from the 13 counties involved and 1,040 people will be assisted through the Labour Force Redeployment Programme, co-financed through credits granted by the World Bank. Furthermore, in Iaşi and Reşiţa - two of the localities most affected by redundancies - in the fourth quarter of 2003, business 'incubators' are to be established in line with Government Emergency Ordinance No. 240/2003.

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