We see a decreasing willingness on the part of both employers and employees to negotiate and conclude a collective agreement. This is mainly due to the fact that employees have become increasingly adept at representing their own interests during individual negotiations, and also to employers’ perceptions of the very concept of a collective agreement.
The conclusion of a collective agreement at the level of the employer can prove beneficial for both employees as well as the organisation. While some employers may feel that entering into a collective agreement would only add costs to the possible benefits that employees would claim, in reality, having meaningful discussions in which both parties transparently set out their demands can often lead to a pleasant working environment.
If the argument about the desirability of initiating collective bargaining does not convince most employers in Romania, the argument about its compulsory nature should.
The law does not explicitly impose an obligation on employers to initiate collective bargaining or to conclude a collective labour agreement, but makes it obligatory for negotiations to have been initiated (by either party). However, failure to provide proof of collective bargaining leads to the employer being penalised.
Specifically, Article 91 para. (1) and (2) of the Law No 367/2022 on Social Dialogue (“Social Dialogue Law“) states that collective bargaining is mandatory at the level of establishments with at least 10 employees/workers, as well as at the level of the collective bargaining sector. The initiative for collective bargaining belongs to any of the social partners.
Article 175 para. (1) letter d) of the Social Dialogue Law provides that the failure of the employer to fulfil the obligation to initiate collective bargaining constitutes a contravention and is punishable by a fine of RON 15.000 to RON 20.000.
Despite the abundance of information available on this subject, we note that, in practice, surprisingly many employers either do not comply with these formalities or do not comply with them properly, which leads to them being fined. This is most likely due to the relatively restrictive nature of the conditions that the parties (especially the employer) must comply with, which can become overwhelming if an experienced consultant is not used.
The legislator has sought to regulate in detail all the procedural stages of concluding a collective labour agreement, starting with the representation of the parties in the negotiations (appointment of representatives and their powers), continuing with the procedure itself (convocation, meetings, documentation to be drawn up), the conclusion and execution of the collective labour agreement (signature, content, duration, effects, amendment, suspension, termination) and ending with its registration with the competent authorities in Romania.
Given that the law imposes an extremely well-defined sequence of stages, a series of documents with precise content that must be concluded at each stage, time limits that must be respected and a multitude of other details whose non-compliance may lead to the legality of the procedure being challenged, the role of lawyers providing the necessary legal advice and assisting the employer in negotiations becomes essential.
If you are in a situation where you have at least 10 employees and have not yet started this procedure, our Romanian legal experts can provide you with the necessary advice throughout the process and assist you in the negotiations with the union/employee representatives.
Phone: +40 314 050 440