October
2007
LEGISLATION
 
Vol. 3 No.8  
 
   
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Safeguarding of employees’ rights in the event of transfer of undertakings, businesses or parts of undertakings or businesses

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     Since beginning of the year it must be paid an increased attention in case of the transfer of undertakings, businesses or parts of them. With Romania’s accession to European Union it was necessary that the Romanian legislation will be harmonized with the European legislation in this field; this was done by Law no. 67/2006, which transposes Directive 2001/23/EC. Investors should now be acquainted with these rules in order to plan carefully the steps to be taken with respect to the employees and their representatives (i.e. trade-unions) before a merger or an acquisition.
     The transfer is defined by the law as the move from the property of the assignor into that of the assignee of an undertaking, business or parts of them with the scope of pursuing a central or an ancillary activity, no matter if obtaining of profit is desired or not. This definition has overseen an essential element - the retaining of the identity of the economic entity – from the European law text.
     In principle, the rights and the obligations of the assignor arising from the individual and collective employment agreements existent at the date of the transfer shall be transferred in whole to the assignee, whereas the transfer of an undertaking, business or parts of them can not ground the collective or individual dismissal of the employees by the assignor or the assignee. In case the transfer has as result a substantial negative change of the working conditions of the employees, the assignor will be responsible for the termination of the employment relationships. As the law does not provide the limits within which the assignor is to be held liable, these shall be established by the law court. The Law no. 67/2006 has unfortunately left outside its application field the provision of the Directive regarding the possibility of performing of dismissals due to economical, technical or organizational reasons, which presume changes in the situation of the working places.
     As a novelty in comparison with the provisions of the Labor Code, the Law no. 67/2006 regulates the faith of the collective employment agreement further to the transfer. In case that, further to the transfer, the undertaking, the business or the parts of them preserve their autonomy, the collective employment agreement must be observed by the assignee until expiration date; by agreement between the assignee and the representatives of the employees the collective employment agreement can be renegotiated, but not earlier than one year from the date of transfer. In case that the undertaking, the business or the parts of them do not preserve their autonomy and the collective employment agreement of the assignee is more favorable to the employees, to the transferred employees will be applied this contract.
     The representatives of the employees will keep their legal status if the conditions of representation are fulfilled and if the undertaking, the business or the parts of them preserve their autonomy. If the undertaking, the business or the parts of them do not preserve their autonomy, the transferred employees can be represented – with their express consent – by the representatives of the employees from the assignee until election of new representatives. However, even in this case, the representatives of the employees from the company of the assignor will further beneficiate of the protection measures stipulated by the law.
     The assignor and the assignee shall be required to inform the representatives of their employees at least 30 days before the transfer with respect to date or proposed date of transfer, the reasons for the transfer, the legal, economical and social implications, the measures envisaged in relation to the employees and the working and employment conditions. Where the assignor or the assignee envisages measures in relation to its employees, it shall consult their representatives at least 30 days before the transfer with a view of reaching an agreement. As the law does not detail what happens in case an agreement is not reached, it is left to the judge to decide upon this matter.
     The sanctions to be applied to the assignor and the assignee in case of non-observance of their obligations consist in fines between 1.500 and 3.000 RON. Due to the fact, that the value of the fines is not substantial, there is the risk that these obligations will be easily overseen. However, it must be considered that the real power is in the hands of the employees and their representatives, who are entitled to claim their rights in case of individual or collective labour conflicts before the law court.

Irina Stănică,
Attorney-at-Law
In cooperation with Cabinet de Avocat Zsolt Karl Radnoczy


 
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