practice area articles


January 26, 2021

By Alexandra Rîmbu and Andreea Dinu

Back to International Employment Law




Penalty clauses in labour agreements

The Supreme Court of Romania (the High Court of Cassation and Justice) has recently held that penalty clauses in individual labour agreements will now be considered null and void. In addition, the inclusion of a penalty clause may result in the employer being subject to a fine ranging from approximately EUR 420 to EUR 1,050.

Penalty clauses were often used by employers in Romania in order to evaluate the value of damages if an employee were to breach certain obligations, such as their confidentiality obligations.


The New Pension Law

A new pension law will come into force on 1 September 2021, and includes changes that may have a significant impact on individuals.

The most important changes include a gradual increase of existing pensions, an increase in the value of the reference pension point as of 2022, and a change in the way pensions are to be calculated.

In addition, some inconsistencies of the previous system have been addressed and amended in a manner that is more favourable to beneficiaries. For example, the new pension law provides for an earlier retirement for women who have given birth to at least three children and that the time invested in attending masters and PhD programmes will be taken into account at the age of retirement.


Harassment and equal treatment of women and men

In line with the current social concerns, supplementary regulations have been enacted regarding the harassment and the equal treatment of men and women. Under the new rules, companies are under a specific obligation to have a clear internal policy aimed at eliminating tolerance of harassment whilst embracing anti-harassment measures. A new Government decision has confirmed the structure for the specific internal policy which must include, amongst other things, guiding principles, an indication of the legal framework, and details of the definition of unwanted behaviours and attitudes when referring to harassment in the workplace and sexual harassment.

In addition, employers will have to ensure that they use all possible means of communication (e.g., meetings, communications, e-mails, etc.) to regularly inform employees of their rights relating to equal opportunities and treatment of women and men in employment relationships.




Implementation of the EU General Data Protection Regulations (“GDPR”)

The GDPR came into force on 25 May 2018, entailing new aspects in connection with the processing of employees’ personal data.

The employees’ personal data may be processed by employers if (i) the processing is necessary for the performance of the employment agreement, (ii) the processing is necessary for compliance with a legal obligation of the employer or (iii) the processing is necessary for the purposes of the legitimate interests pursued by the employer, except where such interests are overridden by the interests or fundamental rights and freedoms of the employees.

For specific cases where consent would meet the GDPR conditions, the same could also be used as a legal basis for processing employees’ personal data. Nevertheless, since the GDPR provides that Member State law or collective agreements should provide specific rules on the processing of employees' personal data and such local legal enactments have not yet been issued, it is not recommended that employees’ personal data to be processed on this legal basis at present, as it is difficult to demonstrate that consent was freely given, due to the dependency that results from the employer-employee relationship.

The personal data processing practices and rules still represent an on-going process and are expected to be further clarified in 2019.


Internship rules introduced

Pursuant to a law which came into force in August 2018, the internship contracts, rules and a stimulation scheme for hiring interns have been specifically introduced in the Romanian legislation. As per the enactment, an internship can be concluded for a maximum period of 6 months. If the employer concludes an individual labour agreement within 60 days of the completion of the internship program, it receives an employment incentive in the amount of RON 4,586 (approximately EUR 1,000) for each former intern employed, provided that the working relations with the former interns are maintained for an uninterrupted period of at least 24 months.

Such enactment represents a step forward which will encourage the companies to hire interns in the years to come.

With thanks to Alexandra Rîmbu and Andreea Dinu of MPR Partners for their invaluable collaboration on this update.


Image: Suzanne Horne
Suzanne Horne
Partner, Employment Law Department

Image: Kirsty Devine
Kirsty Devine
Associate, Employment Law Department

Image: Aashna Parekh
Aashna Parekh
Associate, Employment Law Department