Romania: Latest working life developments – Q3 2017
Legislative changes in labour relations, social protection, undeclared work, the rights of people with disabilities, childcare provision and pensions points, and protests over salaries and working conditions 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 2017.
Labour Code changes
The Labour Code has undergone important changes as a result of the Government Emergency Ordinance No. 53/2017. These changes aim to combat the issue of undeclared work, following a series of proposals from labour inspectors. Initially, the employment contract was considered to be a consensual contract, that would be effective regardless of the form in which it was concluded. Now, an employment contract that has not been signed in writing will lead to the parties involved being penalised for undeclared work (although the existence of the contract will be acknowledged if evidence of it can be produced). However, in the case of atypical contracts – the fixed-term contract, the part-time contract, the temporary work contract, the contract for home working – the requirement for the conclusion of the contract only in written form is maintained.
Other legislative changes
Government Emergency Ordinance No. 60/2017 amends and supplements Law No. 448/2006 on the protection and promotion of the rights of people with disabilities and introduces new measures aimed at encouraging their employment.
Government Emergency Ordinance No. 55/2017 amends and supplements Government Emergency Ordinance No. 111/2010 on child-rearing leave and monthly allowances, capping the monthly allowance at a maximum limit of RON 8,500 per month (€1,847 as at 30 October 2017).
In applying Law No. 167/2014 on the professional status of nannies, the Government Decision No. 652/2017 for the approval of the methodological norms has been adopted. An analysis of the law on regulating the professional status of nannies can be found here.
Government Decision No. 488/2017 the approval of the regulation for the organisation and functioning of labour inspection includes the redefinition of the general and specific tasks by specific fields of activity (labour relations, safety and health at work and market surveillance), so as to avoid parallelism with the other attributions regulated by Law No. 108/1999 on labour inspection.
The update to the pension law came into effect on 1 July 2017, with a small increase to the pension point from RON 917.50 to RON 1,000 – pensions are calculated based on an individual’s contributions, their level of income and the value of the pension point. Government efforts to reshape pension law continued throughout the third quarter.
Following Government Ordinance No.4/2017, taxes for part-time employees were effectively increased, as the social security contribution and health insurance contribution are now calculated on the basis of the national gross minimum wage as the lowest level, and not on the effective salary of the employee.
Tense collective bargaining, protests and strikes on public sector pay
In June 2017, the government announced that workers in the education sector will not receive their negotiated 50% wage increase at the beginning of July 2017, but a 25% increase, starting in January 2018. Education sector unions, dissatisfied with this decision, began collective bargaining and initiated discussions in mid-August with government representatives.
Between June and August, protests and strikes were announced by the National Administration of Penitentiary, over prison officers’ overtime. Following negotiations, the protests ceased in mid-August after a 10% salary increase was agreed, starting in October 2017.
At the end of August, there was a spontaneous walkout at Damen Shipyards Galati with around 400 workers protesting about their salaries and working conditions. The strike ended after the employees reached an agreement with the employer.
In mid-September, there was also a spontaneous protest, this time by workers at Metrorex, the company that runs the Bucharest Metro, over provisions in their collective agreements and their salary levels.
On 11 September, taxi operators belonging to the Confederation of Authorised Operators and Transporters in Romania (COTAR) threatened to withhold their taxes, unless the government rapidly implemented measures to regulate online transport services such as Uber, Taxify and BlaBlaCar.
There have been intense discussions over the government’s intention to transfer the payment of social contributions (for health and pensions) from the employer to the employee, starting from January 2018, which may lead to a decrease in net salaries. Trade unions are resisting the measure, which would make Romania the only European country where these contributions would be paid exclusively by employees. Negotiations between the government and the unions took place in mid-September, but the government did not come to the talks with any detailed plan, leading to the possibility that only part of the contributions will be transferred to the employee.