A paradigm shift in Romania’s labor law granting additional powers to trade unions will likely liven up the area and lead to an increase in related mandates, according to Tuca Zbarcea & Asociatii Partner Serban Paslaru.
"There have been some significant developments in terms of labor law in Romania," Paslaru says. "The Social Dialogue Law has been entirely replaced by a new piece of legislation. The amendments are not simply technical or fine-tuning, but introduce a paradigm shift in the field."
Paslaru says the new law restored, to a significant extent, the setup in place prior to 2011. "Back then, the previous law entered into force – Law 62/2011 – reducing the leverage of trade unions in society and diminishing their recognized rights and their capacity to influence employers' policies," he notes, adding that "the new law not only restored the previous setup but also introduced some key novelties."
"For instance, collective bargaining has been re-introduced at the national level," Paslaru points out. "These agreements cover all employees in the country, including those non-unionized – irrespective of where they are working and whether these companies have unions." On top of that, he notes that "there are additional provisions enabling unions to initiate strikes more easily, even when the strikes are related to government policies or solidarity strikes."
"The new law also introduces the possibility to represent employees in social dialogue with employers and to negotiate a collective contract at the company level," Paslaru adds. "This opportunity existed in the previous regime as well, but the new law simplifies the process significantly. Under the previous law, unions were recognized to have representative power if they had the consent of more than 50% of the employees. Under the new law, the representative threshold has been lowered to 35%, meaning that there can be more representative unions in the company, and it is much easier for unions to negotiate collective agreements about all employees' rights and benefits."
Overall, Paslaru says that with the new law, more power is given back to trade unions. "It is worth mentioning that concluding this new law was among the milestones to be reached under the EU Recovery and Resilience Plan requirements," he says. "It will be interesting to see whether there will be actual social benefits and how this power would be used. One may expect a more social approach in terms of companies' policies regarding salaries, benefits, layouts, hiring, and firing people." However, he also highlights that "the question is whether trade unions will be powerful enough and whether their role in the society is to be revisited. The pandemic and new technologies have introduced a degree of flexibility in labor relations triggering unions being less present in certain industries in Romania."
"Blue-collar workers might benefit more from the new law but, eventually, it will all depend on multiple factors. The lowest paid employees will probably see some benefits as well,” he says. "There are also some gray spots in non-unionized industries, so those are areas where there might be significant improvements."
Ultimately, Paslaru points out that the new law has already impacted the legal sector. "Clients have already received requests from smaller-sized unions that they want to be included in negotiations and collective agreements," he notes. "We expect – even though it is too early to make a forecast – there will likely be more mandates from clients whose unions will pass the new thresholds."