New Labour Code comes into force

The new provisions of the Labour Code, which extend the notice period, introduce the temporary employment agent and tougher penalties against informal employment, with employers risking to go to jail if they use more than five people not legally employed.

The law promulgated by President Traian Băsescu at the end of March came with more than 100 article modifications to a Labour Code that had 298 articles in total (in the 2003 variant). In 2003, the Labour Code was replaced for the first time in 30 years, with the then modifications generating disputes because the legislation was considered to be favourable to employees. Law 40/2011, which brings the main modifications to Law 53/2003, somewhat “diminishes” employee rights and allows employers to operate redundancies more easily, as well as hire more easily.

The Bucharest Territorial Labour Inspectorate calls to employers’ attention the fact that as of Monday, May 2nd, they have to go by the new provisions of the Labour Code whereby new penalties have been set for those who do not meet legal obligations. Under the new Code, employers may not use the services of more than five people without sealing an individual employment contract. Otherwise, they will be fined between 10,000 and 20,000 lei for each person identified.

According to the new Labour Code, a person performing work without concluding an individual employment contract will be punished by fine between 500 and 1,000 lei.

Employers also risk penalties unless they comply with the obligation to keep employment records or if they hire people without a medical certificate, with fines ranging from 1,500 to 3,000 lei, and the same penalty being provided for if provisions on the registration of an employee’s resignation are not met.