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Global employment briefing: Romania, February 2017

  • Romania
  • Employment law


Communicating the termination of employment by email can be valid

A recent decision of the Romanian High Court of Cassation and Justice clarifies that decisions by the employer to end employment may be validly communicated to employees via e-mail but only if:

  • the e-mail address to which the decision is communicated has been provided by the employee to the employer
  • this manner of communication is customary between the parties

The more significant, practical relevance of this clarification from the court is that termination of employment only becomes effective on the date on which the decision is validly communicated to the employee. There have been instances in the past where employees have sought to challenge the valid receipt of a notice of termination, thereby potentially delaying the date on which employment actually ends.

The court’s recent clarification should help to limit future scope for such employee-challenge and reduce uncertainty.

Extensive tax changes will have implications for employment

The enactment of the Emergency Governmental Ordinance no. 3/2017 has led to several amendments to tax legislation which will additionally impact upon the workplace. Amongst the more important changes are:

  • contribution to the social health system has recently been calculated according to up to 5 times an employee’s gross average monthly salary (which, based on average gross monthly salaries in 2016, has given rise to an individual contribution of circa EUR 3,000). These provisions are now repealed so that contribution will be calculated against full salary and not subject to an upper threshold
  • a further effect of the above amendment is that maximum social contributions will also now be calculated with reference to uncapped salary

These amendments, which will come into operation on 1 February 2017, are expected to have considerable impact on employment costs in Romania (in particular, for higher income earners).

Minimum pay to rise from 1 February 2017

Governmental Decision no. 1/2017 has determined that the minimum guaranteed gross base salary will rise to RON 1,450 from 1 February 2017. This increase applies to full time working (ie to 166 working hours per month on average) and does not include any bonuses, supplements, incentives, etc.

This 16% increase in the minimum gross salary will primarily affect industrial companies with a blue collar workforce on lower level salaries.

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