Introduction

The world economic crisis has had a negative impact on employment in Romania, particularly in the construction and automobile industries. Throughout the country, employers have been forced to fire or lay-off large numbers of their employees with grave consequences to the individuals and to their communities. Indeed, collective dismissals are much more than just the sum of individual dismissals – they bear significant social consequences that may affect the life of an entire community, most especially in localities where its entire economic life is focused around one or two major employers faced with the fallout from the global crisis.

The decision to collectively dismiss employees in Romania involves a complex legal process, and the consequences of failing to conduct the process in full compliance with the law can be disastrous for the company, resulting in the absolute nullity of the collective dismissal decision and the reversal of the whole process.

Romanian labor law sets forth the steps that must be followed for collective dismissals. Those steps are in full compliance with the specific Directive adopted at the European Union level, i.e., Directive 98/59/CE, dated July 20, 1998, on the legislation of the member states regarding collective dismissal within the European Union. However, certain ambiguous legal provisions have caused discrepant practices that can harm employers, while they must rely upon this procedure for their economic survival.

Applicable Legal Provisions

The collective dismissal procedure is regulated by the provisions of the Labor Code and by the collective bargaining agreement adopted at the national level (the “National CBA”). However, employers should also consider the more specific provisions of the collective bargaining agreements adopted at lower levels, i.e., the agreements adopt