A new case for suspending the individual employment agreement
On 24 December 2020, there was published in the Romanian Official Gazette, Part I, no. 1293, the Law no. 298/2020 for supplementing the Labour Code (“Law 298/2020”).
As per Law 298/2020, a new case for suspending the individual employment agreement at the initiative of the employer was introduced, namely: during the temporary suspension of the activity and/ or its reduction as a result of the decree of the state of siege (in Romanian: "stare de asediu") or the state of emergency (in Romanian: "stare de urgenta").
Among the most relevant aspects regulated under the Law 298/2020, we mention the following:
- in the above case, the employees affected by the reduced or interrupted activity, who have their individual employment agreement suspended, benefit from an indemnity paid from the unemployment insurance budget, in the amount of 75% of the basic salary corresponding to his/her workplace, but not more than 75% of the average gross salary used to establish the state social insurance budget in force, for the entire duration of the state of siege or state of emergency, as the case may be (the "Indemnity");
- the Indemnity may be supplemented by the employer with amounts representing the difference of up to at least 75% of the basic salary corresponding to the employee’s workplace;
- the Indemnity is subject to taxation and payment of compulsory social contributions, in accordance with the provisions of the Fiscal Code;
- the calculation, withholding and payment of income tax, of the state social insurance contribution and of the social health insurance contribution is made by the employer;
- the Indemnity is not subject to insurance contribution for work (in Romanian: "contributie asiguratorie pentru munca");
- the deadline for payment and declaration of tax obligations is 25th day of the month following the one in which the payment is made from the unemployment insurance budget;
- if an employee has signed several individual employment agreements, and at least one full-time agreement is active during the state of siege or state of emergency, he/she shall not benefit from the Indemnity during the period that the full time agreement is active;
- if an employee has signed several individual employment agreements, and all are suspended as a result of the state of siege or state of emergency, he/she benefits from the Indemnity related to the individual employment agreement with the most advantageous salary rights;
- for granting the amounts necessary for the payment of the Indemnity, the employers submit, by e-mail, to the employment agencies an application and other documents, as this documents will be approved by order of the Minister of Labour and Social Protection;
- the payment of the Indemnity will be made to the bank accounts opened by the employers as the application and these documents will be approved;
- the documents are submitted in the current month for the payment of the previous month's indemnity;
- the payment from the unemployment insurance budget is performed no later than 15 days after the documents are submitted and the payment of the Indemnity shall be made to the employee within a maximum of 3 working days from the receipt by the employer of these amounts;
- employers cannot eliminate the positions occupied by employees whose individual employment agreements have been suspended pursuant to art. 52 para. (1) lit. c) or f) of the Labour Code, for a period at least equal to the period of suspension for which they benefited, for these employees, from the payment of the Indemnity; violation of this rule is sanctioned with the return of the amounts received as Indemnity for the removed positions;
The above amendments have been included into the Labour Code in order to have a uniform legislative framework in case a state of emergency will be in force again in the Romanian jurisdiction as until now the above rules were comprised previously through Government Emergency Ordinances issued during the state of emergency by the Romanian Government.
The Law 298/2020 was published in the Official Gazette, Part I, No. 1293, and is currently in force with full legal effect.