The current situation created in the context of COVID-19 forces many employers to find legal solutions for continuing their business at a lower volume and with reduced costs for the purpose of using the human and financial resources with maximum efficiency and for maintaining the competitiveness.
From a legal standpoint, the employers have two legal options for the temporary decrease of activity for economic, technological, structural or other similar reasons, in the context of COVID-19: one is the suspension of the employment contracts due to furlough (“somaj tehnic” in Romanian language) and the second one is the temporary decrease in the work schedule of employees from 5 to 4 days per week with the corresponding reduction of wages. These measures may be applied to the entire business or to certain departments or activities.
Although not compensated by state, the temporary decrease in the work schedule of employees from 5 to 4 days per week may be these days a more feasible solution for those employers who need all their employees to be active but with a reduced workload, especially after the state of emergency when the furlough will not be paid by the state anymore.
From procedural standpoint, this measure involves the following formalities:
consultations with the employees’ representatives or representative trade union, materialized into a consultation minute, and
employer’s decision approving the measure, which should be communicated to the employees’ representatives or representative trade union and to the relevant employees.
The measure may be legally implemented provided that the temporary decrease of the business activity exceeds 30 business days. Although the law is not clear and the practice is not unitary, we deem that the above 30 business days period does not necessarily be preexistent to this measure, meaning that the employer’s decision approving this measure needs to provide a period of its applicability which exceeds 30 business days. Nevertheless, the above period provided by decision may be shorter if this measure and furlough are used successively, provided that the total period of all measures exceeds 30 business days. Although not provided by law, if the employer needs to unexpectedly resume its activity in full – for example, an unexpected order – we deem that it can renounce to this measure prior to the expiry of the above 30 days term by means of another decision, without affecting the legality of the initial measure.
Prior to any decision, consultations with the representative trade union or employees’ representative are mandatory, the general rules and principles of Law no. 467/2006 on general framework for information and consultation of the employees being applicable. Considering that the above law does not set up a specific consultation process, we listed below some practical guidance:
The consultation process involves at least one meeting between employer and employees’ representatives. Considering the current measures on social distancing, this may be held by electronic means (e.g. phone, video conference, etc.)
Although the law does not provide criteria for selecting the affected employees among those with the same position, for avoiding any potential discrimination claims, it is advisable that at least one objective criterion is applied. This could be, for example, the seniority within the company or in work.
The invitation to consultation should be accompanied by relevant information (e.g. the grounds for implementing this measure, timelines, affected employees, selection criteria, etc.).
Proper minutes of the meeting(s) will be signed by parties.
The employer’s decision on the temporary decrease in the work schedule of employees from 5 to 4 days per week must be well grounded, meaning that the reasons of this measure must be detailed into decision.
The measure involves the suspension without pay of the employment contract for 1 day per week. The specific days when the employment contract is suspended may be freely chosen by employer, depending on its business needs and must be registered in Revisal with at least 1 business day prior to each suspension date. From practical point of view, for avoiding the issuance of individual decisions for suspending each employment contract, the employer’s decision should list the affected employees and the specific days of suspension.
It is important to underline what happens if the employer decides to temporary decrease the work schedule of its employees from 5 to 4 days and the 5th day, which should be suspended, coincides with a legal holiday or with a day of medical leave. Although not expressly provided by law, the legal holiday or the medical leave should prevail because it is more favorable to employees.
More flexibility from legal perspective on the temporary decrease of the activity would be welcomed in the context of COVID-19, similar with other EU countries which allowed short time work programs, whereby the weekly normal working time is reduced depending on employer’s effective needs with the corresponding reduction of wages and with a partial compensation by state of a certain part of lost wages.
Authors: Ileana Lucian, Maria Dosan