Labour Code: administrative labyrinth and a new nightmare for employers

The Government yesterday decided to take responsibility in Parliament for the new Labour Code. Negotiations with trade unions and the patronages were completed yesterday, which means the authorities have got the go-ahead for this project.
But the problems are only just beginning. Many of the stipulations included in the new Labour Code are deemed as very rigid, which makes it hard for companies to move fast on the market. The Romanian economy is characterised by oversized staff, mainly in the state-owned companies, with this draft law obstructing the enforcement of radical measures, both social and economic.
“The draft does not consider the efficient economic functioning. Rigidity is created on the labour market because of the obligations imposed on employers, thus stifling economic efficiency,” shows an analysis conducted by the Romanian Academic Society, at the request of the Foreign Affairs Ministry.
“The project favours burdening administrative previsions over market incentives,” the report also shows.
Moreover, the draft, which will not be the object of parliamentary debates, leaves many important issues unanswered, thus triggering legislative instability and insecurity. The document comprises European law stipulations, most advantageous to the unions.
“It is not clear whether these stipulations are applied only to the state-owned companies or to the private units as well. In case they also encompass the private economic agents, it is rather hard to believe they can be applied: first of all there are many private companies that do not have unions, then restructuring is not done for economic reasons such as privatisation – private companies often choose restructuring for cost efficiency reasons, not because bankruptcy is looming ahead. I do understand the need to protect the employee’s best interests, but the rules cannot be obeyed this way. If the draft is aimed at the state-owned companies, it’s very good, but no one can force a private company to keep an incompetent employee. Where would the competition be, in this case?” says Gilda Lazar, corporate affairs manager with JTI Romania. “Furthermore, several ordinances were issued in order to regulate certain aspects that will be included in the Labour Code, but things should have happened the other way around, first the Code and only then the ordinances,” she added.
Labour minister Marian SA„srbu yesterday announced the draft had been negotiated with the trade unions and the employers’ associations. While all the unions accepted the draft, which gives them more power, only one patronage had signed the protocol yesterday: UGIR 1903.
Dan Ioan Popescu, the current Industry minister, was the head of this patronage until 2000, but his influence has not diminished a bit after he had to give up his position because of his new job. Other patronage heads say they have not been consulted.
“The new regulations must be discussed with all patronages, from all the economic sectors. Our patronage federation, for instance, has not been consulted so far, although it has more than 450,000 employers,” said Aurelientu Popescu, chairman of the Light Industry Patronage Federation.