The current COVID-19 crisis forces many employers to find legal solutions for continuing their business at a lower volume and with reduced costs for the purpose of using the human and financial resources with maximum efficiency and for maintaining the competitiveness.
From a legal standpoint, the employers have two legal options for the temporary decrease of activity for economic, technological, structural or other similar reasons: one is the suspension of the employment contracts for furlough with the payment of an indemnity (“somaj tehnic” in Romanian language), and the second one is the temporary decrease in the work schedule from 5 to 4 days per week with the corresponding reduction of wages. These measures may be applied either to the entire business or to certain departments or activities.
Although not compensated by state, the temporary decrease in the work schedule of employees from 5 to 4 days per week may be these days a more feasible solution for those employers who need all their employees to be active but with a reduced workload, especially after the state of emergency, when the indemnity related to furlough will not be paid by the state anymore.
General rules
From procedural standpoint, this measure involves the following formalities:
– consultations with the employees’ representatives or representative trade union and conclusion of consultation minutes, and
– employer’s decision approving the measure.
This measure may be legally implemented provided that the temporary decrease of the business activity exceeds 30 business days. Although the law is not clear and the practice is not unitary, the above period of decreased activity should not be preexistent to this measure; thus, the employer’s decision approving the temporary decrease of the business activity should provide a period which exceeds 30 business days. Nevertheless, the above period may be shorter if this measure and furlough are used successively, provided that the total period of these two measures exceeds 30 business days.
Consultation process
Prior to any decision, the consultations with representative trade union/employees’ representatives are mandatory, the rules and principles of Law no. 467/2006 on general framework for information and consultation of the employees being applicable. Considering that the law does not set up a specific consultation process, we listed below some practical guidance:
– The process involves at least one consultation meeting. Considering the current measures on social distancing, this may be held by electronic means (e.g. phone, videoconference, etc.)
– Although the law does not provide criteria for selecting the affected employees among those holding the same position, it is advisable that at least one objective criterion is applied for avoiding any potential discrimination claims. This could be, for example, the seniority within the company or seniority in work.
– The invitation to consultation should be accompanied by relevant information on this measure (e.g. business reasons, timelines, affected employees, selection criteria, etc.).
– Proper minutes of the meeting will be signed by parties.
Employer’s decision
The employer’s decision on the temporary decrease in the work schedule of employees from 5 to 4 days per week must be well grounded, meaning that the reasons of this measure must be provided in detail. The decision should be communicated to the employees’ representatives/ representative trade union and to the relevant employees.
The measure involves the suspension without pay of the employment contract for 1 day per week. The specific days when the employment contract is suspended may be freely chosen by employer, depending on its business needs, and must be registered in Revisal with at least 1 business day prior to each suspension date. From practical point of view, for avoiding the issuance of individual decisions for suspending each employment contract, the employer’s decision should list the affected employees, as well as the specific days of suspension.
If the employer needs to unexpectedly resume its activity in full – for example, an unexpected order – we deem that it can renounce to this measure prior to the expiry of the above 30 business days term, without affecting its legality.
It is important to underline what happens if the employer decides to temporary decrease the work schedule of its employees from 5 to 4 days and the 5th day, which should be suspended, concurs with legal holiday or medical leave. Although not provided by law, the legal holiday or medical leave should prevail considering that it is more favorable to employees.
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More flexibility from legal perspective on the temporary decrease of activity would be welcomed in the context of COVID-19 crisis, similar with other EU countries which allowed short time work programs, whereby the working time is reduced depending on employer’s effective needs with the corresponding reduction of wages and partial compensation by state of the lost wages.
Ileana Lucian, Partner Mihai, Lucian si Asociatii
Maria Dosan, Managing Associate Mihai, Lucian si Asociatii
