State of Emergency – Temporary Layoff

State of Emergency Legislation What are the conditions of temporary Layoff The selection of the employees which will be in technical layoff is made based on the scope of the activity reduction. The applicable legislation allows for employers to decide technical layoff for only a part of the employees. Furthermore, if the company is not awarded with an State of Emergency Certificate, but there are no available funds in order to pay all the salaries, the company can decide technical layoff for employees and can request to benefit from the reimbursement of the indemnification (for a maximum of 75% of the base salary but no more than RON 4.041,75). Please note that the reimbursement will be granted for a maximum of 75% of company employees. In order to initiate the technical layoff there are the following requirements (as stated in previous emails):

• Company decision which states the following:

– temporary suspension (partial or fully) or reduced activity; – objective reasons, independent of the Employer’s will, for applying this measure; – suspension of employment agreements (technical layoff); – period of suspension; –  date on which the activity will resume; – names of employees for which the technical layoff will be applicable. Company decision to suspend each employment agreement which is affected by the measure (the decision must be sent to employees);

• Registration of agreement suspension on Revisal platform (must be operated at the latest in the day prior to the measure which is to be taken: suspension of agreement or resuming of agreement).

What process is needed to call people back from a temporary layoff or reduced working time? The decision to suspend the activity/part of the activity of the company and send the employees in technical layoff can stipulate the period for which the measure is taken for. At the end of the period, the employees are obliged to return to work. For the entire duration of the technical layoff, the employees remain at the disposal of the employer. The employment agreement is suspended during this period (there is a mandatory requirement to register the suspension on REVISAL platform), but the individuals retain the status of an employee. If the company can resume its activity/full activity earlier before the term stipulated in the initial decision, then a new decision must be issued and the employees must be informed accordingly and requested to return to work. Depending on the number of employees and the turnover registered for the previous year the conditions of technical layoff may also be applicable (thus resulting in more restrictions for the employer). In case we are forced for permanent layoff, What information/support is needed to start negotiations? Permanent layoff in Romania is a constant source of dispute in which the Romanian Courts favor the employee in the majority of the cases. Having said that, one crucial requirement is to eliminate the job function (the activity / necessity for the job function) in a real and effective manner. From a procedural point of view a 20 working days notice term is required. Given the atypical situation caused by the COVID-19 outbreak, we would not advise you to apply this measure. We presume that the company  will continue to operate in Romania, once the economic and social situation has settled, therefore a permanent layoff of the employees  has the potential to become a liability for the company. Once the crisis passes, we believe (from our previous experiences regarding layoff) the employees will be tempted to take into consideration the option to demand in Court the annulment of the layoff decision with the consequence of the company having to pay the salary rights retroactively (for the period of layoff). Author: Avocat Andrei Bodescu, Avocat Radu Sora email: Office@Sora.Ro or call at 0040374015501