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New Labour Code comes into force

01.05.2011, 23:32 85

The new provisions of the Labour Code, which extend the noticeperiod, introduce the temporary employment agent and tougherpenalties against informal employment, with employers risking to goto jail if they use more than five people not legally employed.

The law promulgated by President Traian Băsescu at the end ofMarch came with more than 100 article modifications to a LabourCode that had 298 articles in total (in the 2003 variant). In 2003,the Labour Code was replaced for the first time in 30 years, withthe then modifications generating disputes because the legislationwas considered to be favourable to employees. Law 40/2011, whichbrings the main modifications to Law 53/2003, somewhat "diminishes"employee rights and allows employers to operate redundancies moreeasily, as well as hire more easily.

The Bucharest Territorial Labour Inspectorate calls toemployers' attention the fact that as of Monday, May 2nd, they haveto go by the new provisions of the Labour Code whereby newpenalties have been set for those who do not meet legalobligations. Under the new Code, employers may not use the servicesof more than five people without sealing an individual employmentcontract. Otherwise, they will be fined between 10,000 and 20,000lei for each person identified.

According to the new Labour Code, a person performing workwithout concluding an individual employment contract will bepunished by fine between 500 and 1,000 lei.

Employers also risk penalties unless they comply with theobligation to keep employment records or if they hire peoplewithout a medical certificate, with fines ranging from 1,500 to3,000 lei, and the same penalty being provided for if provisions onthe registration of an employee's resignation are not met.

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