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Romanian Kurzarbeit scheme

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Kurzarbeit scheme now saving jobs in Romania. The COVID-19 Pandemic triggered a series of legislative changes, more or less difficult to implement, especially in a tight timeframe. Labour law was especially carved out in order to support the enactment of the Kurzarbeit scheme, which was initially developed by Germany in 1924 (following the economic crisis of the Weimar Republic) and helped avoid extended layoffs during the economic crisis of 2008. Our colleague Andrei Muresan, explains the latest updates of this short time short-time work scheme applied in the Romanian legislation.

Short history of the Romanian Kurzarbeit scheme

The Romanian Kurzarbeit scheme has a short and tumultuous history which began in august 2020 by the adoption of Government Emergency Ordinance no. 132/2020 on support measures for employees and employers in the context of the spread of COVID-19 and the stimulation of employment growth (“GEO no. 132/2020”).

Following the adoption of GEO no. 132/2020 the Romanian Kurzarbeit scheme was amended several times in a very short time frame (i) first, by the government in early December 2020 by the adoption of Government Emergency Ordinance no. 211/2020 on the extension of enforcement of social protection measures adopted in the context of COVID-19 spread (“GEO no. 211/2020”) and (ii) second, by the parliament just few days after the adoption of GEO no. 211/2020 through Law no. 282/2020 on approving GEO no. 132/2020 (“Law no. 282/2020”).

As expected, the Romanian Kurzarbeit scheme was once again amended this year by the recently enacted Law no. 58/2021 on approving GEO no. 211/2020 and amending GEO no. 132/2020 (“Law no. 58/2021”) which was published in the Official Gazette on 5 April 2021 and went into force on 8 April 2021.

Main takeaways from the newly enacted Law no. 58/2021

1. Reducing the working time

Law no. 58/2021 provides that, subject to a temporary reduction of the working time determined by a state of emergency, alert or siege, the employers are entitled to derogate from the Labour Code provisions during such state of emergency, alert or siege and up to 3 months as of the termination of such state and unilaterally reduce the working time of their employees by up to 80% of the daily, weekly or monthly work as provided for in their employment agreements.

Before Law no. 58/2021 the employers where able to reduce the working time only up to 50% of the daily, weekly or monthly work as provided for in their employment agreements.

2. Involvement of the trade unions or of the employees representatives

Law no. 58/2021 provides that, where there are trade unios or employees representatives, the measure from point 1 above will be taken by the employers only with the prior approval of such trade unios or employees representatives, as the case may be.

Nevertheless, if there are no trade unions or employees representatives then the employers may adopt the measure from point 1 above shortly after simply informing the employees of the measure.

Before Law no. 58/2021 the employers only needed to inform and have consultations with the trade unios or employees representatives before reducing the working time.

3. The minimum period for which the reduced working time applies

Law no. 58/2021 provides that, the reduced working time established for the employees should cover at least 5 consecutive working days out of 30 calendar days, calculated from the first day of the effectiveness of the measure.

Thus, the employers obligation to establish the reduced schedule for the entire month that was in force before the enactment of Law no. 58/2021 was repealed.

4. Communication rules with the employees

Similar to the regime prior to Law no. 58/2021, the new enactment provides that the employers must communicate their decisions to implement the measure from point 1 above to the concerned employees at least 5 days before the effectiveness of the measure.

Furthermore, Law no. 58/2021 provides for another communication rule that did not exist prior to this enactment and which provides that the employers must communicate to the employees at least 24 hours before their effectiveness the following amendments to the employees working schedules:

  • amendment of the employees working schedules determined by an increase in the employers business activities that requires the supplementation of personnel, or
  • amendment of the employees working schedules determined by the need to replace employees which find themselves in impossibility to perform their duties according to their work schedule.

5. Supplementation of the indemnity by the employers

Law no. 58/2021 provides that the employers may supplement the indemnity granted by the state (i.e. 75% of the monthly gross base salary afferent to the hours by which the work schedule was reduced) to the employees affected by the measure from point 1 above with amounts representing the difference until the full gross base salary of the employees without such additional amounts being deductible for the employers.

6. Interdiction to hire new employees/subcontract activities

The interdiction to hire employees who perform identical or similar work, or subcontract activities carried out by the employees whose work was reduced was clarified by Law no. 58/2021 in the sense that the new enactment expressly states that such interdictions are only applicable at the level of the branch, subsidiary or other secondary offices where the measure mentioned at point 1 above was applied by the employers.

Furthermore, Law no. 58/2021 expressly provides that hiring is not forbidden if the employers want to replace the employees whose schedules were reduced in accordance to point 1 above if the termination of such employees employment agreements occurred for one of the following reasons:

  • cases when the employment agreements are rightfully terminated;
  • cases where the employment agreements are terminated for reasons that relate to the employee’s person;
  • cases when the employees resign.

7. Amendment of the condition regarding the turnover

Prior to Law no. 58/2021, the condition regarding the turnover reduction of the employers, necessary for the application of the measure mentioned in point 1 above, was objectively assessed according to the decrease of turnover in the last / penultimate month by at least 10% compared to the same month of the previous year, respectively 2019.

The new enactment changed the assessment of the turnover reduction by reporting it to  the same month or to the monthly average of the turnover from the year prior to the declaration of the state of emergency / alert / siege, respectively 2019.

This change was normal due to the fact that 2019 was the last year without COVID-19 and thus, 2019 should be the reference year when reporting the level of the turnover of an employer who wants to use the kurzarbeit scheme.

8. Update of the relevant norms

Law no. 58/2021 provides that the norms approved by Government Decision no. 719/2020 on the reimbursement of the amounts granted through GEO no. 132/2020 will need to be correspondingly updated by the government within 30 days as of the entry into force of Law no. 58/2021.

Andrei Mureșan

Managing Associate
act legal Romania Botezatu Estrade Partners Bucharest, Romania
Phone: +40 746 257 689

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