On the 3rd of June 2010, Şerban Pâslaru, Partner at Ţuca Zbârcea & Asociaţii and Head of the firm’s labor and employment practice group expressed some of his opinions regarding the problems associated with the current labor and employment legislation, in an interview given to Hotnews. Also, he answered to queries addressed in relation to employment topics of general interest.

Further to the disruptions of air traffic across Romania caused by the eruptions of an Icelandic volcano, a series of practical issues resurfaced and seem to escalate due to the persistency of this natural phenomenon.

It has become more and more obvious that the array of persons injured by the events from Iceland is not confined to the passengers trapped in the worlds’ airports, but also encompasses many companies whose businesses relied on free and regular flights.

With the world in its deepest recession since the 1930s and the global economy shrinking fast, companies are facing the challenges of restructuring.

While in normal times restructuring is usually aimed at improving the business efficiency, in the current context restructuring has become critically important for company survival. And given that employment costs represent in many cases a significant part of the total costs, restructuring is often accompanied by jobs cutting. Unfortunately, however well designed programs are implemented by governments to support people keeping their jobs, unemployment is rising sharply.

Freezing Salaries Is Possible

Pursuant to the Labour Code, salary may be defined as representing the consideration received by the employee for the work he/she performs based upon an individual employment agreement.

At the same time, salary is one of the essential elements of the employment relationships entered into between the employee and the company, which are regulated by the individual employment agreement. Consequently, changing the salary amount shall imply the amendment of the employment agreement which can be done only if the consent of the employee is obtained. Freezing salaries but not decreasing would be therefore, in principle, possible.

The outcome of an economic and financial crisis is always painful in terms of employment. In the current context, it is likely that joblessness will grow fast in Romania, as construction boom has begun to crash and global trade, which emerging markets depend of, shrinks.

Many companies have already announced restructuring and other measures aimed to cut employment costs. Any such measures have to observe the legal constrains deriving from the Romanian legislation. Like many other EU countries, Romania has an overregulated employment market and “benefits” from an excessive employee protective framework.