The Romanian Government imposes an obligation to initiate collective bargaining
By HR CLUB on 20 November 2017
Note: The information contained in this e-mail shall not be construed as legal advice.
On Thursday, 16 November, the Government sent for publication a normative act (Emergency Ordinance no. 82/2017, further on referred to as GEO 82/2017) imposing on all employers the obligation to initiate the collective negotiations with their employees with regard to the implementation of the new provisions of the Fiscal Code whereby the social security contributions were transferred from the employers to employees (changes made by GEO no. 79/2017). Obviously, the intent was to find a way in which the employers will be pressured to increase the gross salaries significantly so that the net salaries of the employees are not reduced once the changes to the Fiscal Code become applicable.
The obligation to start collective negotiations applies both if there is no collective labour agreement or collective accord in place, as well as if there is a collective labour agreement or collective accord. In the latter situation, the obligation is to negotiate the conclusion of an addendum to the existing collective labour agreement/accord.
The obligation to initiate negotiations applies to all employers in Romania, irrespective of the number of their employees. As such, it also applies to employers who have less than 21 employees, this being the minimum applicable for other topics of collective negotiation.
In addition, by way of derogation from the provisions of Social Dialogue Law no. 62/2011, if there is an unrepresentative trade union at the company level, negotiation on these issues only will be carried out both with the employees’ representatives and with the unrepresentative trade union federations (previously only representative federations at sector level had this quality).
In the absence of a trade union at the level of the company, employees' representatives may participate in the negotiations together with a representative of a representative federation at sector level or of a representative confederation at national level, at the invitation of employees’ representatives. At a first reading, it seems that employees’ representatives have the right to invite or not the representatives of the federation. However, we can also expect a contrary interpretation by the labour authorities in the sense that employees' representatives should also invite the representatives of the federation. Normally, the failure to invite the federation should be the responsibility of employees' representatives, but in practice problems may arise at the time of registration of the addendum with the Territorial Labour Inspectorate.
The provisions of GEO 82/2017 above, namely the obligation to negotiate, apply between 20 November - 20 December 2017. The manner in which the text is written seems to derogate from the general rule, which stipulated that negotiations should last 60 days. The intention seems to be that these aspects are clarified by employers before Christmas.
GEO 82/2017 does not provide for sanctions for non-observance of the obligation to initiate collective negotiations during this period.
A normative act regulating the applicable sanction is likely to be issued and the Territorial Labour Inspectorate might consider that GEO 82/2017 is supplemented by the provisions of Social Dialogue Law 62/2011, which allows the representatives of employees / trade union representative organizations to request the initiation of collective negotiations, and if the company fails to do so, it may be sanctioned with a fine between RON 5,000 and 10,000.
As regards the substance of the matter, i.e. how to compensate the decrease of the net salaries because of the new fiscal measures, several big employers already communicated that they will take measures so that the employees would not be affected. Of course, the easiest way would be to increase the gross salaries by additional acts signed with the employees. However, the employers are concerned that these fiscal measures adopted by the Government would be changed or repealed once submitted to the Parliament’s approval, while the increase of the gross salaries would be irreversible. Consequently, many employers look for solutions to increase the revenues of the employees, but such actions to be reversible. The top alternative seems to be granting of regular bonusses until things get clarified in course of next year.
An interesting option is also reaching an agreement with the employees on the amount of the net salary, with the gross value varying according to the tax regime. Some employers already had such clauses, but the practice is quite limited. Besides the problems of communication and management of the relationship with employees, from a legal and technical point of view questions arise as to how such a clause will be regulated (considering that Order No. 64/2003 containing the Individual Labour Agreement template contains the gross salary), as well as to the manner of reporting and documenting the gross salary in the perspective of future tax changes.
We all hope for more predictable times and for making the right decision. Should you wish to discuss the matter in more details, we are ready to assist.
Article written by:
- Ioan Dumitrascu, Partner PeliFilip
- Ecaterina Burlacu, Senior Associate PeliFilip
- Matei Varachiu, Associate PeliFilip
Read and about
How do companies create value and achieve competitive advantage in an age of great complexity? The growth of complexity is reflected in businesses’ (read more...)
For many businesses, the cost of poorly designed people processes runs into the millions, or even tens of millions, of pounds every year. For (read more...)
Many companies that are using scientific methods to improve their marketing, procurement and R&D decision making choose not to use them when (read more...)
