What are the regulations on employment contracts in Romania?

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A special category of contracts that can be signed in Romania concerns employment contracts. These types of contracts are regulated by the Employment Law (Labor Code). According to Romanian employment law, the employment contract must be signed in writing and must contain specific elements.

Business people wishing to open a company in Romania must comply with the regulations of the above-mentioned law when hiring employees, and it is also important to know that the law provides for special requirements when hiring foreign labor; however, our team of Romanian lawyers can provide detailed information on these regulations. Some of the basic elements of an employment contract in Romania are outlined below:

  • the identification data of the company employing an employee and the identification data of the employee;
  • the duration of the contract (it can be signed for a fixed or indefinite period);
  • the salary and the type of contractual relationship established between the employer and the employee (part-time contract, full-time contract, project-based contract, etc.);
  • the days of leave to which the employee is entitled and the probationary period;
  • depending on the nature of the job, the employment contract may contain confidentiality provisions;
  • the probationary period is determined according to the employee’s future position in the company (executive or managerial positions).

What are the probation periods for employment contracts in Romania?

As mentioned above, an employment contract in Romania must contain provisions regarding the number of days the employee is on probation (or trial period). This period is influenced by specific factors, as regulated by the Labor Code. Currently, the following applies:

 

  • A period of 90 days in the case of employment contracts signed with persons who will have an executive function within the company;
  • a period of 120 days in the case of employees hired for management positions;
  • in the case of fixed-term contracts, the probationary period is 5 days if the contract is signed for a period of 3 months;
  • in the case of a fixed-term contract of between 3 and 6 months, the probationary period is 15 days;
  • fixed-term contracts signed for more than 6 months must include a probationary period of 30 days;
  • fixed-term contracts signed for managerial posts (for more than 6 months) must include a probationary period of 45 days.

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The main management structure of the company in Romania is the general meeting of associates / shareholders. The constitutive act establishes the rules for convening and adopting decisions and whether the exercise of the vote can be delegated by special mandate by the associate / shareholder who cannot take part in the meeting. In the limited liability company, each shareholder entitles the holder to one vote in the respective meeting. The general meeting of associates has the following main obligations: ✓ to approve the annual financial statement and to establish the distribution of the net profit. ✓ to appoint the administrators and the censors, to revoke / dismiss them and to discharge them, as well as to decide to contract the financial audit, when it is not obligatory, according to the law; ✓ to decide the pursuit of the administrators and censors for the damages caused to the company, designating also the person in charge to exercise it; ✓ to modify the constitutive act.
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The limited liability company is the most common form of company in Romania, being the legal entity that best serves the interests of investors both from the point of view of the reliability of the activity, and from the perspective of its management. The limited liability company is abbreviated "SRL" in Romania and is the equivalent of the American limited liability company Limited Liability Company (abbreviated to LLC) or the German economic structure "Gesellschaft mit beschränkter Haftung" (abbreviated to GmbH), or the structure called "limited" , the structure used in most Latin American states.
The limited liability company is characterized by:
✓ the character intuitu personae, which means that this economic structure is based on the trust between the associates;
✓ the division of the share capital into fractions called shares, which cannot be negotiable securities;
✓ the liability of the associates is limited to their contribution to the share capital.
The limited liability company may also have a single partner, natural or legal person, of Romanian or foreign nationality, who will be the owner of all shares. Instead, the maximum number of associates is 50 people.
At present, the Romanian law no longer conditions the subscription and payment of a certain amount as share capital.
Through registration, the company acquires legal personality, becoming, under the law, a collective subject of law. The conclusion given by the judge is sent, ex officio, to the Official Gazette of Romania for publication at the expense of the company and to the Financial Administration in whose territorial area is the main headquarters of the company for fiscal registration, mentioning the registration number in the Trade Register .

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