The jobs of thousands of employees in companies that went insolvent are threatened, considering that shareholders along with the court-appointed administrators have the legal right of terminating all employment contracts without going through the collective layoff steps.
"Legally, the insolvent companies are not prohibited from resorting to redundancies. On the contrary, the legislation stipulates this process can be sped up as an emergency, without complying with the deadlines set in the Labour Code for collective layoffs," says Serban Paslaru, partner of Tuca, Zbarcea & Asociatii.
Moreover, the law does not clearly set a limit to the number of employees that can be laid off by insolvent companies.
The biggest 14 companies to have filed for insolvency over the last few months have lost several thousand employees since the end of last year, as part of the streamlining processes conducted before the start of the insolvency proceedings. Therefore, whereas 14 companies totalled 12,000 employees at the end of 2008, they are currently employing no more than 7,100 people, according to the data centralised by ZF. The number of employees working in insolvent companies is much higher, in the range of tens of thousands.
The Pic group, last year's biggest Romanian-held company in food retail made approximately 500 employees redundant after filing for insolvency a few weeks ago.
Before resorting to this, brothers Ilie and Cornel Penescu reorganised their business and slashed 1,200 jobs. The retailer is now struggling to survive on a dwindling market with only two hypermarkets still in business, compared with five at the end of 2008.
"Last year we had 3,000 employees and now only 1,300 are left in the entire group, 600 of which working in hypermarkets. We would sell everything that can be sold to get cash, but under the current circumstan