Collective redundancies in Romania are always a delicate and complicated procedure. When reducing staff on a large scale, Romanian employers must comply with strict legal rules that balance company restructuring needs with employee rights. Ignoring these obligations can lead to court disputes, administrative fines, and serious damage to a company’s reputation.
This article sets out the primary steps in law under Romanian labor law, with particular emphasis on consultation requirements, procedural timeframes, and employee rights.
What qualifies as a collective redundancy in Romania?
According to the Romanian Labour Code (Law No. 53/2003), a dismissal qualifies as a collective redundancy when an employer with more than 20 employees terminates a minimum number of contracts over a 30-day period:
- At least 10 employees, if the company has between 20 and 99 employees,
- At least 10% of the workforce, if the company has between 100 and 299 employees, or
- At least 30 employees, if the company has 300 or more employees.
These thresholds are important, because once they are met, the company must respect additional procedural obligations that go beyond individual dismissals.
Employer obligations during collective redundancies
When collective redundancies are triggered, the employer must demonstrate that the decision is based on genuine economic, technological, or structural reasons. Examples include falling demand, automation, relocation of operations, or financial difficulties.
The law requires transparency throughout the process. Employers must inform and consult employee representatives or trade unions before finalising any decision. The notification must set out:
- The reasons for redundancies,
- The number and categories of employees concerned,
- The criteria proposed for selecting employees to be dismissed,
- The number of employees normally employed, and
- The timeline for implementation.
Consultation is not a mere formality. Employers must genuinely discuss measures to avoid or reduce redundancies, as well as possible support for affected staff, such as redeployment or training.
Timeline for collective redundancies
There are tight time limits so the employees can prepare and the authorities can oversee the process. The main steps are:
Pre-notification
The employer must notify employee representatives, the Territorial Labour Inspectorate (ITM), and the local employment agency (ANOFM), at least 30 days prior to making dismissal decisions.
Consultation period
At this stage, thought should be given to restrictions on redundancies, their reduction in impact, or seeking alternatives. The employer will be required to respond in writing to any proposals submitted.
Individual decision and notice
Following the consultation period, when no such alternatives are found, individual redundancy notices may be issued by the employer. The employee is entitled to a period of at least 20 working days’ notice before the termination becomes effective.
Employee rights and severance pay
Employees affected by collective redundancy benefit from a number of legal safeguards.
Firstly, they retain all rights linked to notice periods, outstanding salaries, and unused holiday pay. In addition, if collective bargaining agreements or internal company policies provide for severance pay, these amounts must be respected. Although Romanian law does not impose a statutory severance payment for all employees, many industries or companies include it as part of collective agreements.
Employees dismissed through collective redundancy are also entitled to register with the unemployment agency (ANOFM) and may receive unemployment benefits, re-qualification training, or assistance in finding a new job.
Special protection is afforded to certain categories, such as employees on parental leave, who may not be dismissed unless exceptional conditions are met.
The role of labour authorities in collective redundancies
The Territorial Labour Inspectorate (ITM) and ANOFM play an active role in supervising collective redundancies. Their involvement ensures compliance with legal standards and provides oversight on whether employee rights are respected. Employers must provide detailed reports and respond to authority inquiries throughout the process.
Non-compliance can result in fines and, in some cases, the annulment of dismissals. Courts in Romania are often strict when reviewing redundancy disputes, particularly if procedural rules were overlooked.
Romanian employers’ practical recommendations
Collective redundancies must be well planned and documented. To limit legal exposure, companies should:
- Perform a thorough economic study to justify the need for restructuring,
- Either establish objective and transparent criteria for selecting employees or,
- Keep written records of every consultation and notification,
- Prepare clear individual notices in accordance with the requirements of the Labour Code, and
- Respect any terms of the collective bargaining agreement.
We advise that professional legal counsel be accessed from the very beginning, as even something as simple as a minor procedure can be the basis of a successful appeal in court.
Conclusion: finding the balance between restructuring and employee rights
Collective redundancies in Romania are regulated by a strict legal framework. For employers, this is not only about issuing dismissal letters – it is a formal procedure which is fair, transparent, and which honors employee rights.
Executed well, collective redundancies allow businesses to adapt to changing economic realities while continuing to comply with labour law. Executed poorly, they expose companies to protracted litigation, financial penalties, and loss of public and employee trust.
By strategically addressing redundancies and respecting the jurisdiction of the courts, Romanian businesses can achieve business stability while protecting their employees’ rights.