I have worked in Romania since 2003. I have two business and incubation centers in Buzau. For all our clients, we do full HR. Romania’s IT sector is facing increasing pressure to restructure as global economic uncertainty, geopolitical conflicts in Ukraine, Gaza, and Iran, and cautious client spending affect investment and technology budgets. At the same time, generative AI and automated coding tools are enabling companies to develop software with fewer resources and potentially smaller teams.

So I decided to write a guide for collective dismissal in Romania. It is a complicated procedure, and you need to respect all the steps. We offer assistance to those who want to start this procedure. I strongly recommend companies to hire a specialist.

Collective dismissal is governed by Articles 68–74 of the Labour Code (Law 53/2003) and requires a mandatory procedure, followed in order, before any individual dismissal decision is issued; skipping a step leads to the nullity of the dismissals. For an SRL, a realistic minimum is about 45 days until the decisions are issued, plus at least 20 working days of notice.

1. When does the procedure apply ?

Collective dismissals are dismissals made for reasons not related to the employee (Art. 65), where the number reaches:

  • at least 10 employees at employers with 21–99 employees;
  • 10% of employees at 100–299;
  • at least 30 at 300 or more (Art. 68).

Below 21 employees, individual dismissal rules apply.

Note: terminations initiated by the employer, also for reasons unrelated to the employee (for example, an employee’s refusal of a contract change), are added to the total if there are at least 5 of them.

Dismissals must not be replaced with “resignations” signed on request: this is an attempt to circumvent the procedure.

2. I summarized the stages, in order

  1. The reorganisation resolution. The administrators (or the shareholders’ meeting, if the articles of association require it) adopt a reasoned decision: the economic, technological, or structural reasons, the new organisational chart, the positions eliminated. The elimination must be effective and have a real and serious cause (Art. 65). Keep the supporting file: financial analysis, projections, before/after comparison.
  2. Employee representatives. Identify the trade union or, if there is none, the elected employee representatives. If none exist, employees must elect them before the notification.
  3. Written notification of intent (Art. 69). Sent to the representatives, it contains: the total number and categories of employees; the reasons; the number and categories of employees affected; the criteria for the order of priority; the measures to limit dismissals; the mitigation measures and compensation; the date or period of the dismissals; the deadline for the representatives’ proposals. Consultations must begin “in good time”, with a view to reaching an agreement.
  4. Copy to the ITM and AJOFM (Art. 70). On the same day as the notification to the representatives. The clock starts from this date.
  5. Proposals and reply (Art. 71). The representatives have 10 calendar days from receipt to propose measures to avoid or reduce the dismissals. The employer replies in writing, with reasons, within a maximum of 5 calendar days. Minutes of the consultation meetings are drawn up.
  6. Final notification (Art. 72). If it decides to proceed, the employer notifies the ITM and AJOFM in writing at least 30 calendar days before issuing the decisions, with the results of the consultations; a copy goes to the representatives. The ITM may shorten or modify the period on a reasoned request. During this period, AJOFM looks for employment solutions, and the ITM may postpone the issuing of the decisions by a maximum of 10 days (Art. 73). In practice, 10 + 5 + 30 = 45 days; hence the “45 days” term used in internal procedures, which is not a single term in the law.
  7. Selection of employees. First, vacant positions of the same kind are eliminated; then the criteria from the notification apply: performance evaluation (Art. 69), plus the social criteria from the collective agreement or internal regulations (for example: sole breadwinners, employees close to retirement). Check the dismissal prohibitions (Art. 59–60): sick leave, pregnancy, maternity, child-raising leave, annual leave, trade-union office. Criteria must be objective and identical for everyone in the same position.
  8. Individual decision and notice (Art. 75–77). The notice period is at least 20 working days (longer if the contract provides), and its length is stated in the decision; the contract ends when it expires. The decision is in writing and contains, on pain of nullity: the factual and legal grounds, the notice period, the order-of-priority criteria, the list of available positions (where applicable), the deadline to contest and the competent court. It is communicated personally, against signature, or by registered letter with confirmation of receipt.
  9. Closing the employment relationship. Payment of outstanding entitlements, compensation for untaken leave, any compensatory salaries provided by the collective agreement, registration of the termination in REGES, certificates for unemployment benefits.
  10. Priority re-hiring (Art. 74). Within 45 days of dismissal, if the position is re-created in the same activity, the dismissed employee has priority, without competition or probation; the employee has 5 days to accept the written offer.

3. Let me give some points of attention for SRL shareholders

  • Who decides. Check the articles of association: if major reorganisation is reserved to the shareholders’ meeting, its resolution must precede the notification. Keep the minutes.
  • The real reason. Shareholders cannot ask for particular people to “leave”; positions are eliminated, not persons. The economic file must exist before the notification, not after the challenges.
  • Group decisions. The information and consultation obligations remain those of the SRL even if the decision comes from the parent company or majority shareholder (Art. 69); lack of information from it is no excuse.
  • Calendar and cash. Budget for notice, compensation, and untaken leave; the total timeline exceeds 2 months.
  • No re-hiring afterwards. Re-creating the position within 45 days creates a right to re-hiring; outsourcing the same activity may be seen as circumvention or as a transfer of undertaking.

The main risk is that the courts annul the dismissal decisions, with costs that grow with every month of litigation.

Failure to follow the legal procedure results in absolute nullity (Art. 78 Labour Code). The court may order the employee’s reinstatement and order the employer to pay the indexed salaries and other entitlements from the dismissal until reinstatement (Art. 80), plus possible moral damages.

  • Procedure breached. Notification made after the decisions were issued, merely formal consultation, no written reply to proposals, shortened 10-, 5- and 30-day periods, copies not sent to the ITM or AJOFM. Proof of communication and the minutes often decide the case.
  • Cause not real or serious. If the position is revived under another name, filled by another employee or replaced by external contractors, the court checks whether the elimination was effective (Art. 65) and may annul the dismissal. The court reviews the reality and seriousness of the reason, not its economic expediency.
  • Incomplete decision. Missing factual grounds, selection criteria, notice period or competent court (Art. 76) leads to nullity. A generic “restructuring letter” is not enough.
  • Arbitrary or discriminatory selection. Criteria not applied uniformly, or persons chosen because of age, sex, pregnancy or trade-union activity, breach Art. 59–60 and anti-discrimination law (sanctions also before the CNCD).
  • Protected employees. A decision communicated to a person on sick leave, maternity leave, child-raising leave or annual leave is null and must be repeated, with a risk of damages.
  • Deadline to contest. The employee may go to the tribunal within 30 days (Art. 268) or, under the current interpretation of the social dialogue law, 45 days; state the longer period in the decision to avoid a formal defect. Labour disputes are exempt from stamp duty.
  • Administrative sanctions. The ITM may impose contravention fines for breaching the information and notification obligations, in addition to the civil consequences. The amount should be checked in the current text of Art. 260.
  • Burden of proof. The employer must prove the legality and merit of the decision; missing documents work against it.

What this means for shareholders

Shareholders are in principle liable only up to their capital contribution (Law 31/1990), but the losses from a lost case (reinstatements, back pay) hit profit and dividends directly.

Administrators are liable to the company for damage caused by breaching their duty of diligence and the law; in insolvency, their liability can become personal.

Therefore: obtain a legal audit before the notification, approve the compensation budget by shareholders’ resolution, and do not enter informal negotiations with employees before the notification.

The collective labour agreement (CCM): risks and what shareholders can do

A CCM cannot go below the Labour Code, but it can go beyond it, and this is where blockages appear: an SRL can comply perfectly with Art. 68–74 and still breach its own CCM.

Clauses more favourable to employees bind the employer for the whole term of the agreement, and breaching them is sanctioned like a breach of the law (nullity of the decision, reinstatement, damages).

A unit-level CCM must be negotiated at employers with at least 10 employees (Law 367/2022), is concluded for 12–24 months and may be extended once, for up to 12 months.

Clauses that can block or raise the cost of a collective dismissal

  • Minimum compensation. Compensatory salaries (for example, at least 2 gross monthly salaries), notice longer than 20 working days, paid exemption from attendance for the whole notice period, free hours for job searching.
  • Order of priority and social criteria. Rigid criteria (age, seniority, dependent children, spouses employed in the unit) can conflict with the performance-based selection of Art. 69(3) and may force the company to keep key people.
  • Additional protections. Protected categories wider than Art. 59–60 (trade-union members, representatives, employees with a given seniority or close to retirement) or job-security clauses, sometimes banning dismissals during the CCM.
  • Extended procedures. Consultation longer than 10 + 5 days, the union’s consent or opinion before the decision, an obligation to offer vacancies or employer-paid retraining.
  • Re-hiring. Priority for re-hiring longer than the 45 days in Art. 74, or for all positions, not only re-created ones.
  • Hidden costs. Waiver of loyalty clauses or of recovering training costs, keeping benefits (meal vouchers, insurance) during the notice period, payment for leave and advances.
  • Duration and carry-over. A CCM signed or extended before the restructuring anchors the employer to clauses it cannot change unilaterally mid-term; a hasty extension may block the plan.
  • Defective representation. If representatives were not properly elected (at least half plus one of the employees), the consultation can be challenged and the law provides for fines.

What shareholders should do

  1. Audit the CCM and the internal regulations before any decision: list the clauses that affect dismissals, their total cost and the expiry date. The question to ask: what does the CCM provide beyond the law?
  2. Approve the negotiation mandate by shareholders’ resolution: limits for compensation, notice, selection criteria and duration; administrators may not exceed the mandate. Avoid signing clauses the company cannot finance.
  3. Choose the timing: if the CCM expires soon, renegotiate before the restructuring; if not, avoid extending it without review. Unilateral denunciation or modification mid-term is permitted only under the conditions in the CCM; otherwise changes are made by a negotiated addendum.
  4. Draft future clauses carefully: selection criteria that allow performance evaluation, compensation capped or linked to seniority, consultation with the same deadlines as the law, an “within the limits of the law” formula, re-hiring only for re-created positions.
  5. Apply questionable clauses with caution: clauses below the legal standard are null, but a “more favourable” clause cannot be ignored unilaterally. If the CCM conflicts with performance-based selection, take a lawyer’s opinion and consult the representatives in writing.
  6. Put a realistic cost in the restructuring plan: the budget should include CCM compensation, paid notice and the risk of reinstatement, before the reduction is approved.
  7. Document the dialogue with the representatives: negotiating compensation during the consultation (Art. 69–71) reduces the risk of challenge; a written agreement with the union can reduce litigation.

Sources

My Vlog on Romania Website on investment in Romania

Vlog for entrepreneurs in Romania – subscribe please YOUTUBE CHANNEL of Freddy Jacobs

Romania’s Fiscal Changes for 2026

contact me: +32 478 331 799