Social partners sign addendum to national collective agreement

On 22 February 2006, the Romanian social partners signed an addendum to the national single collective agreement for 2005–2006, thereby jointly fixing a new rate for the national minimum wage. The agreement also covers issues such as the standard working week, dismissal of employees on the grounds of poor performance, continuing vocational training in accordance with the new Labour Code, and financial credits towards holidays and healthcare.

Purpose of the addendum

On 17 December 2004, the national single collective employment agreement for 2005–2006 was signed by the social partners (RO0501101N).

Pursuant to article 105 of the agreement, 30 September 2005 was set as the date for re-launching negotiations between the parties on a number of provisions for 2006, including the level of the national minimum wage, dismissal of employees on the grounds of poor performance, and vocational training (including continuing vocational training).

However, the bargaining process failed to start as scheduled; as a result, the signing of a new addendum was registered with the Ministry of Labour, Social Solidarity and Family (Ministerul Muncii, Solidaritatii Sociale si Familiei, MMSSF) as late as 3 April 2006. This came after representative social partners agreed, on 22 February 2006, on a national minimum-level gross monthly wage of RON 370 (approximately €105).

Collective bargaining outcome

The addendum amended and completed five articles and two annexes of the national collective agreement.

These amendments pertain to:

  • reducing the reference period for calculating the maximum weekly working time (48 hours, including overtime): the maximum legal weekly working time is now to be calculated over a reference period of three months (instead of a year as stipulated in article 10 of the previous agreement). Longer reference periods are accepted, exceptionally, in the following sectors: electric power, agriculture, forestry and fishery, food industries, woodworking and processing, construction, building materials, transport, commerce and tourism – with the condition that the reference period does not exceed a year;
  • statutory minimum wage increases: the minimum gross wage is to be increased from RON 330 (€95) for 170 hours per month and RON 1.94 (€0.55) per hour (according to article 39 of the previous agreement) to RON 370 (€105) and RON 2.18 (€0.63), respectively;
  • addendum set out new rules regulating dismissal for reasons of work incompetence (supplementary to article 75 of the previous agreement): the changes require a prior performance evaluation of the employees in question, carried out by a commission set up by the employer, which must include a representative of the trade unions of the employees concerned. According to this new procedure, the employee will be notified 15 days before the date of evaluation. The assessment includes theoretical and practical tests and the employee may challenge the decision of the commission within 10 days of the evaluation date. During this time, the employer may not issue a dismissal notice. Lack of vocational skills in using recently introduced technologies may only be used as grounds for dismissal if the employee has already attended training courses for the use of this particular technology, organised by the employer. Finally, where employees have lost their vocational skills for medical reasons, employers will provide a new job depending on the employees’ disabilities. If no suitable job can be ensured, then employment agencies will take over the respective cases and look for an appropriate position for them;
  • in the area of vocational training and continuing vocational training, the addendum provides for better definition of responsibilities of the parties concerned as well as the role of sectoral committees and of the National Council for Adult Vocational Training (Consiliului National de Formare Profesionala a Adultilor, CNFPA); better support to be provided by trade union organisations and employer organisations; and guarantees the rights of employees attending vocational training courses. All of these elements have been aligned to the new Labour Code (RO0507102F), adopted by Law No. 371/2005.

The two amended annexes to the agreement refer to the national and branch joint committees and the contribution quotas of employees towards holiday and healthcare credits (in accordance with the new national statutory minimum gross wage).

Commentary

The national minimum gross wage level in Romania remains a source of contention. The current monthly level (€105) is influenced by the exchange rate. The significant strengthening of the RON (by approximately 15% in the past 18 months) has increased its value against the euro. However, the price of consumer goods has also risen by 15% over the same period, cancelling out the benefit of a stronger currency on wages.

Dr Constantin Ciutacu, Institute of National Economy, Romanian Academy

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