Employment

Romania: Negotiation of the Collective Bargaining Agreement at Company Level

Legal provisions no longer establish the employers’ obligation to initiate yearly collective negotiations. Labour authorities seem to have a different interpretation of these provisions.

In recent months, the Romanian labour authorities started performing controls on employers in an effort to enforce the laws on negotiation of collective bargaining agreements at company level. Due to this, several questions on collective negotiation at company level were raised, as the legal provisions in this respect are not clear enough.

What does collective negotiation mean?

Collective negotiation means the negotiation between the employer or employers’ organisation and the trade union or employees’ representatives, as the case may be, aiming to regulate work relationships between the two parties, as well as any other matters of common interests. In most cases, collective negotiation within companies aims to conclude a collective bargaining agreement at that level.

Who has the obligation to initiate collective negotiations?

Starting with 2011, collective negotiation is mandatory only at company level for companies having more than 21 employees (Law no. 62/2011 on social dialogue; SDL).

As a rule, initiating negotiations belongs to the employer or employers’ organisation. In their turn, the trade union or employees’ representatives may also request negotiations, in which case the employer must start the negotiation within 10 calendar days from the date it received the request.

When should collective negotiations begin? What is the duration?

If there is a collective bargaining agreement at company level, the employer must start collective negotiations at least 45 days before it expires.

SDL does refer to the date when collective negotiations should start if there is no collective bargaining agreement at company level. The former regulation, Law no. 130/1996 on collective bargaining agreements (repealed), provided that collective negotiations must be performed every year, but this provision was not taken over by the SDL. So it is not certain whether, without a specific term indicated by the law within which the employer can fulfil his obligation to initiate collective negotiations, the authorities can apply sanctions.

The duration of negotiations is limited to 60 calendar days, unless the parties agree to prolong the term. Although SDL does not provide the date from which the above term will be calculated, we believe that it must be calculated from the date of the first negotiation meeting.

What sanctions can the labour inspectors apply if the employer does not observe the negotiation obligation?

SDL requires only that collective negotiations begin but does not require that they be concluded. Accordingly, SDL does not sanction the parties if, within the 60-calendar-day term or the term established by the parties, the parties did not come to an agreement and decided not to conclude a collective bargaining agreement.

So the negotiation could be finalised in two ways: (i) the parties concluding a collective bargaining agreement at company level or (ii) the parties not concluding a collective bargaining agreement. In the first situation, when the parties agree on concluding the agreement and its clauses, the agreement must be concluded in writing and submitted for registration with the competent territorial labour inspectorate. The collective bargaining agreement applies from the date of registration with the territorial labour inspectorate or from a later date that the parties agree.

What happens if the employer did not perform the collective negotiation procedure and the labour inspectors carry out controls of them? Can the labour inspectors sanction the employer if it does not prove that it started the collective negotiation procedure?

Considering how SDL is drafted, no express sanction seems to be established if the employer did not start collective negotiations. On the other hand, SDL fines the employer’s refusal to commence negotiation of a collective bargaining agreement. We believe the provision applies only in those cases when employees (through trade union or employees’ representatives) request the employer to commence collective negotiations and there is no response to the request within the legal term.

It may also be possible that, in case of an inspection, the labour inspectors request the employer to start collective negotiations within a given term. Failure to fulfil all obligations imposed by the labour inspectors within the set term would be considered a misdemeanour sanctioned with a fine.

Only the commencement of collective negotiations at company level is required, and only in companies with more than 21 employees.