American Chamber of Commerce in Romania

The American Chamber of Commerce in Romania (AmCham Romania) supports the Government's initiative to amend the labor legislation and reiterates the importance of substantial changes to the benefit of all involved parties: employees – employers – government.

Through approximately 150 proposed amendments to the Labor Code submitted to the Ministry of Labor, Family and Social Protection during the public consultation period, AmCham Romania promotes four major principles:
1. Enforcing performance as basic principle with regard to labor relations;
2. Flexible labor relations;
3. Applying the collective bargaining agreement concluded at industry level only to signatory parties and removing the provisions related to the national collective bargaining agreement;
4. Clearer and simpler legal provisions.

Each of these principles is based on the needs expressed by AmCham member companies, such as:
„The need to introduce performace in the employer's decisons is a sine qua non condition for a competitive economy. As long as companies' perfomance is decissive for their existence on the market, the impossibility to use this principle in the labor relations system only leads to disfunctions which are unfavourable to the majority of employees, a majority with a clear interest for performance and capable of performance. The lack of clarity in conveying the message related to the importance of performance makes it impossible for employees to reward performance at its true value.” (Cosmin Bordea, Country HR Manager, Microsoft Romania)
or
“The productivity and results of each company directly depends on the performance of its employees. In such context, it is both normal and necessary for performance to represent the main criteria for hiring and rewarding employees, as well as for selection in view of keeping them in case a personnel restructuring may be necessary. Efficient companies, with good results due to the performance of their employees are the ones that drive the economic growth. Consequently, employees' performance needs to be encouraged by companies and by the lawmaker who should enforce it to the level of governing principle in the area of labor relations.”
(Anca Grigorescu, Co-Managing Partner, bpv GRIGORESCU)

In this context AmCham proposed the inclusion of performance among the governing principles of the labor relations, including hiring and dismissing employees.
Considering performance in the hiring process refers to providing a probation period that will allow the employer to thoroughly assess the potential of the employee, and, at the same time to enable the employee to decide the extent to which he is fit for one employer and his capacity to be competitive working for this employer.
To address the needs of both employer and employee as detailed above, AmCham considers that the following measures are necessary:

„X Providing for a longer probation period, both in cases of individual labor contracts signed for un undetermined period, and also for temporary individual labor contracts.
„X Possibility for all new employees to go through a probation period, regardless of the number of previous employees going through probation periods for the same position;
„X Possibility for employees to go through a probation period following the completion of initial professional formation programmes; in case the employee is included in such programmes and their timing coincides with the probation period, this does not meet its objective, as detailed above.
Moreover, in line with the principle of performance, in case of restructuring a certain position while the organizational chart includes more similar positions, the employee could select which of the current employees in that position will be dismissed, based on comparing the performances of each employee and not based on their social condition.
In case of restructuring, the employer must be allowed to retain the most professional employees, as them only, and not their less performant colleagues, will contribute to the employer's economic growth.
On the contrary, only providing the social criteria for selecting employees in view of dismissal will lead to situtations in which the best employees are dismissed, and in their absence the employer will not be able to recover and eventually this will lead to closing down the business and dismissing the employees that have been kept on social grounds. Social criteria could be used to compare employees with the same level of performance.
Although on the first sight, one could judge that introducing such principles will only favor the employers, in fact, enforcing this principle is also in favor of persons seeking employment, of the employees and of the state as well. Through the activity of performant employees, the employer will achieve economic growth and will be able to create additional jobs, thus reducing the state's burden for paying the social aid to unemployed persons or without any means for living. At the same time, employees will be motivated to achieve higher performances to keep their job, the labor force will increase its overall competitiveness, thus prolonging its active period on the labor market.

AmCham Romania will continue to illustrate the key principles it promotes with regard to the amendment of the labor legislation, focused on flexible labor relations, applicability of the collective bargaining agreement at industry level only to signatories, and the removal of the provisions related to the national collective agreement in upcoming messages to the media.


For more details, please contact:
Andreea Roman, Manager Comunicare
E:aroman@amcham.ro
T: 021 312 48 34