Romania’s government embarked two years ago upon an ambitious program to restore fiscal and currency equilibriums as well as increasing the country’s external competitiveness as a prerequisite for more sustainable and robust growth.
As part of the process the Government has moved to modify the country’s 2003 Labour Code, and while not easily accepted by the unions the amendments have been fast-tracked through the country’s Parliament entering into force on 1 May 2011. A social dialogue law was also adopted and entered into force in May.
The main changes include an increased scope for temporary contracts, the removal of links between the public and the private sector with regard to the minimum wage, the removal of mandatory national collective bargaining and, in some cases, of the sector or branch collective bargaining, thus leaving the enterprise as sole realm of collective bargaining. There has also been a wide liberalization with regard to the number of labour contracts into which an individual might engage.
Full flexibility has as such been introduced into the market, with the aim of harnessing to the maximum whatever winds of growth might blow into the rather battered sails of the Romanian economy.
One of the changes affects the probation or test period, an interval following hiring, which most companies used for on-the-job training of new workers. This period counted for a large part of enterprise-based vocational training. The former version of the Code included a number of restrictions which in certain instances created problems for employers. Moreover, for management positions this probation period was limited to no more than 90 days, now extended to 120 days.
An important distinction has been introduced with respect to young university graduates for which any initial period of employment, up to 6 months following graduation, is to be considered as a “professional practice period”. This will give young graduates finding a first job a chance to hone their knowledge and skills and obtain written proof of it.
While unions have been vehemently against the increased flexibility of the probation period the new legal provisions regarding higher education graduates have been more welcome. The first and foremost barrier in fostering youth employment has always been the lack of proven professional experience. The new regulation generously makes way for such proof. However, it remains to be seen if there will be enough employers willing to make use of it and if there will be enough jobs around.