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Employees’ transfer to a new employer (case study: mandatory records in the General Register of Employees)

July 24, 2013

The option to transfer employees for business purpose (“An employee can be transferred for business purpose, usually in another unit of the same branch, for its proper functioning, or on request, under law provisions” – part . II, chap. I., art. 69 of the Labor Code of Romania from 25.11.1972) is not possible because these provisions were repealed by the occurrence of the new Labor Code Law no. 53/2003.

Thus, under the new provisions, taking over of employees could be possible in the event of a transfer of the company, unit, or parts of it, according to the head. V, art. 173 of the Labor Code republished (Law no. 53/2003).

Given the head. V, art. 173, para. (2) in conjunction with the head. II, art. 5, para. (1) of Law no. 67/2006 on the protection of the employees in the event of transfer of the company, unit, or parts of it, all rights and obligations of the transferor (the person which ceases to be the employer) arising from individual employment contracts and collective agreements, existing at the date of transfer, will be entirely transferred to the transferee (the person who becomes the employer).

The transfer may not be grounds for individual or collective dismissal of employees by the transferor or the transferee, as provided in art. 173, para. (3) of Law no. 53/2003 and art. 7 of Law no. 67/2006.

Following the assignment/merger occurs by default a collective transfer of employees. Therefore, employees’ rights and obligations arising from existing employment contracts are fully transferred to the transferee.

In case of collective transfer, individual employment contracts still produce their effects, these being taken over by the new employer. Collective transfer involves a change into employment contract regarding the employer and eventually  the working place. This change occurs at the date of transfer of the company, unit or parts of it, as expressly provided by law, and does not represent the manifestation of the will of the parties (employer – employee).

Employment contracts do not cease, but will be transferred to the transferee who becomes the new employer under the merger/assignment agreement concluded between the two companies which must also contain provisions relating to the transferred employees.

In this respect, has to be issued a Collective decision of transfer, which contains as appendix the list with the transferred employees and contractual terms in force at the date of transfer, decision which shall be communicated to employees and became part of the employment contract.

Prior to the transfer date, both the transferor and transferee are obliged to inform in writing the employees’ representatives or, if they are not set up or designated,  their own employees, at least with 30 days before the date of transfer regarding:
a) the date or proposed date of the transfer;
b) reasons for the transfer;
c) the legal, economic and social implications of the transfer for the employees;
d) the measures envisaged in relation to employees;
e) conditions of work and employment.
According to art. 174 of the Labor Code republished, the transferor and transferee are obliged to inform and consult, prior to the transfer, the union or, if applicable, employees’ representatives about the legal implications, economic and social impact on employees, resulting in the transfer of ownership.

Based on art. 9 of Law no. 67/2006 transferee shall comply with the provisions of the applicable collective labor contract on the transfer date, until the date of termination or expiry.
By agreement between the transferee and the employees’ representatives, the terms of the collective labor agreement available at the time of transfer can be renegotiated, but not earlier than one year from the date of transfer.

According to Directive 2001/23/EC, in conjunction with art. 8 of Law no. 67/2006 in case the transfer involves a substantial change in working conditions to the detriment of the employee, the employer is responsible for termination of the individual employment contract.
Thus, if the contract is terminated, the employer is held liable only to the extent in which the employee’s injury.
If termination occurs by employee’s request, through resignation, without damaging his rights/conditions of employment, then the employer is not held liable for termination of employment.

Should be considered that, collective transfer of employees has to be highlighted in the General register of employees, taking into account that employees will perform work for a new employer.

In this regard, can be noted that, in the Government Decision no. 500/2011 concerning general register of employees there are no clarifications regarding the modality of data recording and employer’s obligations in case of a collective transfer of employees.
As mentioned, employment contracts do not cease, but by law they are transferred to the new employer.

Because GD no. 500/2011 doesn’t contain specific provisions regarding recording of transferred employees into Revisal and transmitting the data to the Territorial Labor Inspectorate through the web portal ReGES, employers are once again in the position to interpret and act on their own, so as to eliminate the risk of being sanctioned by the competent bodies of control.

In this regard, to help employers, the solution in order to highlight the transfer into Revisal and therefore to avoid the potential fines applied by labor inspectors is detailed through a practical example, which can be found below.

Considering that between two companies occurs a business transfer by assignment, respectively between SC “X” SRL (transferor) and SC “Y” SRL (transferee), and this is causing a collective transfer of employees that will take place on 01.10.2013.

Transferor – steps to be taken:

In Revisal application has to be selected the module Contracte (Contracts) and then choose option Încetare (Termination).
On “Temei încetare” (Termination basis) select “Alt Temei” (alte temeiuri de încetare / other grounds for termination), and then in field “Explicație” (Explanation) to complete as following: Transferred to SC “Y” SRL in accordance with art. 173 of Law no. 53/2003 – Labor Code republished (based on the assignment agreement concluded between the companies).

In the section “Dată încetare” (Termination date) will be filled the date on which the transfer takes place, in this case 01.10.2013.

Reporting period, in this case, will be treated as the termination of an employment contract, therefore SC “X” SRL will have to make the entries in Revisal at the date of knowledge by employees of the event or the latest on 01.10 .2013.

Transferee – steps to be taken:

In this case, SC “Y” SRL must access into Revisal application the module Salariați (Employees) in order to input employee’s data, and after that to fill in the contractual dates in force at the transfer date. All data are taken from the existing contract which has been transferred to the new employer (including the number and date of the contract), except the date of employment. Here in the section „Dată începere activitate” (Employment date) will be filled the date on which the transfer takes place, in this case 01.10.2013.

It is important to note that, although legally, SC “Y” SRL should take and record transferred contracts with the same number and data that have been concluded by SC “X” SRL, however from technical point of view, Revisal application allows the registration of an employment contract, as long as the information in the field “Număr contract” (Contract number) and related data (set in the field “Dată contract” (Contract data)) it has not been allocated to that employer (e.g. if SC “Y” SRL already has into Revisal database a contract with no. 12/01.01.2010, then recording another contract with the same data, namely no. 12 dated 01.01.2010, it is not possible, the application displaying a message like “Contractul cu numărul 12 există deja în baza de date” (Contract number 12 is already in the database)).

In this case, given that software application doesn’t allow to input in the field “Număr contract” (Contract number) a number that has already been allocated, an option should be to fill in the number as following: instead of 12 is assigned the number 12bis.

In the field “Alte detalii”  (Other details) should be filled: Employed by transfer from SC “X” SRL in accordance with art. 173 of Law no. 53/2003 – Labor Code republished (based on collective decision of transfer), and into the field “Data la care produce efecte” (Effective date) will be filled the date on which the transfer takes place, in this case 01.10.2013.

Reporting period, in this case, will be treated as hiring of a new employee, therefore SC “Y” SRL will have to make the entries in Revisal no later than the working day preceding the date of transfer, respectively latest on 30.09.2013.

It should be noted that although employment contracts do not cease, this is the only solution to highlight into Revisal the transfer of employees to a new employer.
Currently, Revisal application version 5.0.8.033 has no function to make recordings in this particular case from labor relations field.

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