When it comes to the end of employment, it’s crucial to follow the right procedures to avoid potential pitfalls, particularly around the concept of fair dismissal in Romania.
This guide will dive into important aspects of employment law in Romania that every employer should be aware of, especially regarding notice periods, end of employment, fair dismissal in Romania, transfer of undertakings, and separation agreement waivers.
Whether you’re dealing with employee resignation, dismissal, or probation, knowing the right notice periods can help your business remain organised and legally compliant.
When terminating an employment contract in Romania, employers are generally required to provide a notice period. This allows both parties time to prepare for the change and ensures a smoother transition. According to Romanian labour laws, the notice period in Romania for dismissal is typically a minimum of 20 working days, regardless of the type of employment contract.
This applies to most roles, but if an employee holds a management position, the notice period may extend up to 45 working days. It’s essential to follow this minimum requirement, as failure to do so can lead to legal disputes.
Moreover, the notice period starts once the employer has provided the employee with formal, written notification of the termination.
Employees in Romania can also terminate their employment agreement by resignation. The notice period for resignation differs depending on the employee’s role:
These notice periods ensure that employers have enough time to find a replacement or reorganise operations while allowing employees to leave in a structured manner. During the notice period, the employee is still obligated to fulfil their job duties unless otherwise agreed upon.
If both parties agree, the notice period can be shortened or waived. However, the maximum limits must be respected unless there is a mutual agreement.
Unlike in many countries, there is no statutory severance pay in Romania, unless it is specified in a collective bargaining agreement or in an individual employment contract. Employers are not automatically required to provide severance pay when an employee is dismissed unless certain conditions have been set in a collective agreement.
However, in cases of collective redundancies or certain restructuring scenarios, severance packages may be negotiated as part of the termination process. While it is not mandatory, offering severance pay can help maintain goodwill and reduce the likelihood of legal disputes.
Probation periods in Romania are a valuable tool for employers to assess new hires’ suitability for a role. The probation period is specified in the employment agreement and depends on the employee’s role:
During the probation period, the employment contract can be terminated by either party without providing a formal reason, but a notice period of at least 5 working days is required. This allows both the employer and the employee to adjust if the working relationship is not a good fit.
Although probation periods are more flexible, employers should still respect the notice period to avoid potential legal issues.
Navigating the termination of employment in Romania requires a clear understanding of labour laws to ensure compliance and protect both the employer and the employee. From dismissal grounds to the necessary procedures, Romanian labour laws outline specific steps that employers must follow.
Employment contracts in Romania can be terminated under several circumstances, as outlined in the Romanian Labour Code. The process and requirements depend on the type of contract, the employment agreement, and whether a collective agreement is in place. Individual employment contracts can be terminated in the following ways:
Employers can terminate employment contracts through dismissal for reasons related to the employee, such as professional inadequacy or misconduct, or for reasons not related to the employee, such as job redundancy or company restructuring. It is crucial that employers clearly document the reasons for termination to avoid potential disputes.
The termination process in Romania depends on the employment agreement, collective bargaining agreements, and the reason for termination. Regardless of the reason, employers must adhere to several procedural steps to ensure compliance with Romanian labour laws:
In Romania, a notice period is generally required when an employment contract is terminated. The standard notice period during termination in Romania is 20 working days for most employees. However, this can extend to 45 working days for managerial staff or other specific positions outlined in the employment agreement.
The notice period starts once the employee is formally notified of the termination. During this period, the employee is expected to continue fulfilling their job responsibilities unless otherwise agreed upon. The purpose of the notice period is to provide both parties with enough time to adjust to the impending termination, allowing the employer to find a replacement and the employee to seek new employment.
If the dismissal is due to serious misconduct, the notice period can be bypassed, but this requires thorough documentation and legal support to ensure compliance with labour laws.
Termination pay (also known as severance pay) is not automatically required by law unless it is stipulated in the employment contract or a collective bargaining agreement. However, in cases of collective redundancies, employees may be entitled to termination pay as part of their compensation for the job loss.
The amount of termination pay varies depending on the employment contract and industry-specific agreements. In some cases, employers may choose to offer termination pay as part of a negotiated severance package, especially when trying to avoid potential litigation or to facilitate a smoother transition for the departing employee.
When managing employees in Romania, restraints such as non-compete and non-solicitation clauses, can protect your business interests after an employee leaves. However, implementing these clauses effectively requires careful attention to Romanian labour law to ensure they are enforceable.
In this section, we’ll explore the key aspects of work restraints in Romania, focusing on non-compete and non-solicitation clauses.
A non-compete clause is a contractual agreement where an employee agrees not to engage in activities that would compete with their previous employer after leaving the company. This is a common method for employers to safeguard their business from potential competition by former employees. In Romania, these clauses are permitted but are strictly regulated under the work restraint system.
For a non-compete clause to be valid under Romanian law, it must include certain mandatory elements:
In addition, non-compete clauses are considered an exception to the principle of freedom of work in Romania. Therefore, any failure to meet these legal requirements can render the clause void.
While non-compete clauses are clearly regulated, non-solicitation clauses—which prevent former employees from soliciting clients or employees of their previous employer—are not explicitly covered under Romanian law. However, they can still be included in employment contracts and may fall within the scope of a non-compete agreement if carefully crafted.
A non-solicitation of customers clause aims to prevent former employees from approaching or attempting to do business with the clients of their former employer. Although this is not directly regulated by Romanian law, it is common practice for businesses to include such a clause as part of the broader work restraint system.
These clauses can be particularly useful in protecting the employer’s relationships with key customers, ensuring that a departing employee cannot immediately capitalise on those connections. While not explicitly covered by law, a well-drafted non-solicitation of customers clause may be upheld if it is considered reasonable and is part of a broader non-compete agreement.
A non-solicitation of employee’s clause prevents a former employee from poaching colleagues or staff members from their previous employer. Like customer non-solicitation, this is not expressly regulated under Romanian law but may be valid if included in a non-compete agreement.
This clause helps businesses protect their workforce and avoid disruptions that could arise from key employees being recruited by a former colleague. Ensuring that the clause is reasonable in scope and duration is key to its enforceability under the work restraints in Romania’s system.
While it’s common to reach mutual agreements during separations, it’s important to note that, under the Romanian Labour Code, employees cannot waive their legally recognised rights. Any agreement aimed at waiving or limiting employee rights is considered invalid.
This rule ensures that employee rights, such as wages, working conditions, and protections, remain intact, regardless of any separation agreements. Employers should be cautious when drafting such agreements to avoid invalid clauses that contradict this provision.
It’s also worth noting that the visa waiver program in Romania is separate from employment law. However, understanding the Romania visa waiver process can be crucial for international businesses looking to hire foreign workers.
When a business undergoes a transfer in Romania, whether through a merger, acquisition, or insolvency, it’s essential to understand the legal implications for employers and employees. The Romanian Transfer of Undertaking Law No. 67/2006 (TUPE), based on the EU Acquired Rights Directive, governs the transfer of employee rights and obligations.
When a business is transferred, the employees’ rights, including their individual employment agreements and collective bargaining terms, are automatically transferred to the new employer. This automatic transfer follows the EU Acquired Rights Directive and Romanian Transfer of Undertaking Law No. 67/2006 (TUPE). The new employer inherits all employment-related responsibilities, including salaries, benefits, and working conditions.
Moreover, dismissals related to the transfer are prohibited, and the new employer cannot change the terms and conditions of employment following the transfer, except under specific conditions. This ensures that workers’ rights in Romania are safeguarded during transitions.
Insolvency can complicate the transfer process, but employees’ rights still apply. Employment contracts are transferred to the new employer, who must work closely with both the insolvent company and the transferee. The government may intervene to protect wages or benefits, ensuring that workers’ rights in Romania are upheld.
Even during insolvency, employers must follow Romanian labour laws, particularly regarding employee contracts and obligations. Non-compliance can lead to significant liabilities.
No matter how an employee’s time with your business ends, staying on top of the labour laws and regulations, as well as the relevant best practices about the end of employment is crucial. This helps your business stay compliant and ensures you’re handling the transition with care.
However, the process around the end of employment and its regulations can be difficult to navigate, especially for companies unfamiliar with the local market.
This is where CXC comes in. Our team of compliance experts has a deep understanding of the local labour market and the regional best practices. That means, you don’t have to worry about compliance, and you can focus on growing your business.
Under the Romanian Labour Code, employment can end by mutual agreement, resignation, expiry of a fixed-term contract or dismissal. It may also end automatically in other circumstances specifically established by law.An employer may dismiss an employee for serious or repeated misconduct, medical inability to perform the job, professional inadequacy or redundancy.
For disciplinary dismissal, the employer generally needs to carry out a prior disciplinary investigation before making the decision. The employee must be summoned in writing, informed of the subject of the investigation and given an opportunity to present a defence and supporting evidence. Limited exceptions apply where the employee fails to attend without an objective reason. Where dismissal is based on professional inadequacy, the employee must first be assessed under the evaluation procedure established by the applicable collective agreement or the employer’s internal regulations.
Medical dismissal can apply where the competent medical authorities confirm that the employee is physically or mentally unable to perform the role.
For redundancy, the employee’s position must actually be eliminated and the reason for doing so must be real and serious and unrelated to the employee personally. Romanian law also imposes additional consultation and notification requirements where the number of affected employees meets the thresholds for collective redundancy. A collective redundancy generally arises where, within 30 calendar days, an employer dismisses at least 10 employees in a workforce of 21–99 employees, at least 10% in a workforce of 100–299, or at least 30 employees in a workforce of 300 or more
A dismissal in Romania can be wrongful if the employer does not have a lawful reason or fails to follow the required procedure. This includes discriminatory or retaliatory dismissal and dismissals carried out during certain protected periods.
Dismissal during protected periods, including certified sick leave, maternity leave and annual leave, is generally prohibited, subject to narrow exceptions involving judicial reorganisation, bankruptcy or dissolution of the employer. Protection also applies in circumstances including maternity-risk leave, child-raising leave and qualifying leave to care for a sick child.. A written decision must state the facts, legal reason, notice where applicable and the information required for that type of dismissal. Collective-redundancy decisions must also address the applicable selection criteria, where required. Collective redundancies require consultation and notifications.
An employee normally has 45 calendar days from the date they become aware of the unilateral measure concerning termination to challenge it in court. Different deadlines can apply to particular employment disputes, including disciplinary sanctions, so the relevant legal basis should be checked.If successful, the employee can request reinstatement and lost salary and benefits for the period until return. The employer must prove the dismissal was lawful and properly conducted.
For employer-led dismissal due to medical incapacity, failure to meet role requirements or redundancy, employees generally receive at least 20 working days’ notice. Different rules apply to disciplinary dismissal, probation and employee resignation.
An employee who resigns gives the period agreed in the contract or collective agreement, capped at 20 working days for non-management roles and 45 working days for management roles. Notice is counted in working days, not calendar days.
The contract continues during notice: the employee works and receives normal pay and other employment rights. If the contract is suspended, including for certified medical leave, the notice period usually stops and resumes when the suspension ends. The employer may waive all or part of an employee’s resignation notice.
Yes. Certified sick leave generally pauses an active notice period in Romania. The remaining notice continues after the employee returns from sick leave.
The same principle applies when sick leave begins after notice has already been given. The suspension must be recorded accurately and the final employment date recalculated. Unjustified absence is treated differently and does not create the same suspension effect. Automatic termination by law, such as fixed-term expiry, is a separate issue and can occur even while a contract is suspended. Where a statutory ground for automatic termination arises during a period of suspension, the automatic termination normally takes precedence.
Dismissal is prohibited during certified sick leave, although exceptions apply for court-supervised reorganisation, bankruptcy or dissolution of the employer. Those exceptions do not remove the need to calculate notice correctly where notice is legally required.
At the end of employment in Romania, employees must receive salary owed up to their final day, payment for unused annual leave and any bonuses, commissions, allowances or severance they are entitled to receive.
Untaken statutory annual leave must be paid in cash when employment ends; it cannot normally be exchanged for cash while the contract remains active. Compensation should cover accrued and unused statutory and contractual annual leave, calculated using the applicable vacation-pay rules. Contractual bonuses, commissions, expense reimbursements and allowances are due when payable under their terms. Any agreed severance or restructuring-plan compensation must also be included.
Romania has no universal severance payment for every termination. The final payroll must apply the correct tax and social-contribution treatment, provide required employment documents and reflect the end date in REGES-Online. The employer must generally provide documentation confirming the employee’s activity, employment duration, salary and seniority, together with an extract from the employee register. A court may later order back pay or damages if dismissal is found unlawful.
Generally, no. Romania does not require severance for every dismissal. Severance may be payable during redundancy, restructuring or another type of exit if it is required by a collective agreement, employment contract, company policy, social plan or specific sector rule.
Severance may arise during restructuring, collective redundancy or a negotiated separation, even though redundancy does not carry a universal legal formula. It is separate from salary during notice and cash compensation for untaken annual leave, both of which may be payable independently.
The applicable exit package depends on the contract, collective agreement, internal rules and any workforce-restructuring plan. Public-sector and regulated roles may have additional compensation rules, while a mutual termination agreement can create a payment that would not otherwise be due.
A fixed-term contract in Romania generally ends automatically on the expiry date stated in the contract. The employer must document the ending and update REGES-Online within the required deadline. Although no notice of termination is required for expiry, the employer must confirm the automatic termination in writing within five working days after it occurs and communicate that confirmation to the employee within five working days.
The parties may end the contract earlier by agreement, resignation or lawful dismissal. Continuing work after expiry requires a valid written contractual basis established before the new period of work begins. The parties may extend an existing fixed-term contract in writing in the circumstances permitted by law. Successive fixed-term arrangements are subject to legal limits on total duration and renewals.
At expiry, the employee remains entitled to salary through the final day and payment for untaken annual leave. Severance is not automatic unless a contract, collective agreement, policy or special rule provides it. Any renewal must be documented before the new work period begins.
Yes. A post-employment non-compete clause can be enforced in Romania for up to two years if it is agreed in writing, contains the required details and the employer pays the required monthly allowance.
It can last up to two years after termination. The employer must pay a monthly non-compete allowance of at least 50% of the employee’s average gross monthly earnings over the final six months, or the shorter employment period. The clause cannot prevent the person from exercising their profession altogether.
The restriction generally does not apply when the employer ends employment for reasons unrelated to the employee, such as genuine redundancy, and some automatic terminations are also excluded. Its effect therefore depends not only on the wording of the clause but also on the legal ground on which employment ended. If the employee breaches a valid clause, the employer may seek repayment of the allowance and compensation for proven loss through the courts.
When ending employment in Romania, employers must use the correct legal reason and process, provide notice where require, issue the necessary documents, update REGES-Online and pay all amounts owed to the employee.
The process then depends on the reason. Disciplinary cases require a prior investigation; dismissal for failing to meet role requirements requires an evaluation; collective redundancies require consultation and notifications. Where required, the employer must give at least 20 working days’ notice. The written decision must state the reason, notice period and other mandatory information applicable to the particular dismissal ground.
A dismissal decision must be communicated to the employee in writing and takes effect from the date of communication. An employer generally cannot rely in court on reasons that were not included in the dismissal decision.
The employer must communicate the decision, update the employee register (REGES-Online) within the deadline applicable to the relevant termination ground,, pay salary and other amounts due, compensate untaken annual leave and provide required employment documents. Records need to show calculations, approvals, communications and any consultation with employee representatives.
CXC helps international companies handle employee terminations in Romania carefully and in line with local employment requirements.
The steps can differ based on why the employment is ending. For example, a disciplinary dismissal may require an investigation, professional inadequacy requires an evaluation process, and redundancy has specific rules around removing the role and giving notice. Our local team can guide employers through the appropriate steps and documentation for the situation.
When CXC employs the worker through our Employer of Record service, we take care of the local employment and payroll requirements throughout the exit process. This frees up your HR team from having to manage every Romanian requirement themselves, while making sure the employee’s exit is handled properly from start to finish.
Speak to our team to learn more about managing employee exits in Romania.
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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