Although both the European Union and Romanian Labour Legislations ensure the protection of employees’ rights in restructurings or transfer of undertaking processes, the local legal framework may generate confusion, particularly due to the deficient implementation of the European directives.
“The transfer of undertaking is a relative new concept in the Romanian labour code and not a very popular one among Romanian employers. The “transfer” concept, as it is presented in the Romanian law, is prone to generate misunderstandings, especially with regard to outsourcing processes which do not involve assets sale. This misunderstanding may lead to litigations with the employees and trade unions and may trigger penalties for not observing the special procedure applicable to the transfer of undertaking”, explained Ana Maria Placintescu, Partner Musat & Asociatii and head of Labor & Employee Department, during her presentation at the “Legislation and Industrial Relations” seminar, organized by HR Club.
Musat & Asociatii’s Labour & Employee Benefits practice has seen a 25% growth in activity this year, due to a significant outburst in clients’ demands related mainly to personnel restructuring or collective dismissals. The employment practice is headed by Ana Maria Placintescu and includes more than 10 experienced attorneys focused on personnel restructuring and transfer, collective dismissals, employment litigations and various other labour issues. Our portfolio of clients assisted in labour related matters includes notorious multinational groups like Michelin, L’Oreal, Unilever or Enel. Also, Musat & Asociatii’s labor expertise is constantly recommended by the prestigious British legal publications PLC – Which Lawyer? and Chambers Europe.
About the enterprise transfer process
The „transfer” concept as defined by the Law no. 67/2007 regarding employees rights in case of transfer of undertaking refers to „ the passing from the ownership of the transferor into the ownership of the transferee of an undertaking, units or part of those, in order to continue the main or the secondary activity, regardless of the level of profitability”.
By this definition, the employer intending to outsource a part of its activities may interpret its initiative as not being a transfer of undertaking if such outsourcing does not involve the transfer of tangible assets. This assumption is not correct as, with respect to the community regulations as construed by the European Court of Justice, the transfer of undertaking rules may apply even if the ownership of the tangible assets is not transferred.
