Collective labour agreement - what you need to know about its clauses, validity, enforceability and negotiation

Employees play a key role in achieving economic goals. Human resources activity is therefore extremely important for the well-being of society. A number of tasks fall under this area, including payroll, personnel audits, and drafting or reviewing internal policies or collective labour agreements, all in accordance with the relevant legislation, of course. Of all these, the collective labour agreement is a very important document, concluded in writing between the employer or employers' organisation and the employees' representatives, setting out important issues relating to pay, working conditions, rights and obligations of the parties involved. Its purpose is to prevent and limit conflicts and maintain fair and safe working relations for employees.

You will find out in this article when a collective labour agreement is binding, what clauses it must include, how long it is concluded for, and other key aspects of the features of a collective labour agreement.

Contents

1. Collective labour agreement - what is it and what must it contain?

1.1. What is a collective labour agreement?

1.2. The binding nature of the collective agreement

1.3. The validity of the collective labour agreement

1.4. What does the collective agreement contain?

2. The collective labour agreement - the negotiation procedure and the stages of concluding such an agreement

2.1. The procedure for negotiating a collective agreement

2.2. Who negotiates the collective agreement?

2.3. The stages in concluding a collective agreement

1. Collective labour agreement - what is it and what must it contain?

Written agreements between employer and employee organisations on labour relations are called collective labour agreements. They play an important role in working life, protecting the parties involved and preventing labour disputes from arising. Find out more about collective agreements, their enforceability and validity, and other useful facts on the subject.

1.1. What is a collective labour agreement?

The written document, concluded between an employer and the employer's organisation and employees, represented by trade unions, setting out clauses concerning working conditions, pay and other rights and obligations arising from the employment relationship, is called a collective labour agreement. The definition of a collective agreement also gives its main characteristics:

• Protection of the interests and rights of both signatory parties;
• Preventing and limiting conflicts that may arise in labour relations;
• Efficient resolution of conflicts should they arise.

The collective labour contract is regulated by the Labour Code through Law No 53/2003, as well as by Law No 62/2011 and Law No 26/2023, which adds some additions. Under this legislative framework, the collective agreement is compulsory from 10 employees onwards.

1.2. The binding nature of the collective agreement

Not every company is obliged to start negotiating a collective agreement. By law, collective bargaining is compulsory, except where employers have fewer than 10 employees. Previously, the law made collective bargaining compulsory for companies with at least 21 employees.

The collective labour contract must be concluded in writing and registered with the Territorial Labour Inspectorate (ITM) - at the establishment level and with the Ministry of Labour and Social Justice - at the sector level. Amendments to such a document must always be based on an additional document.

1.3. The validity of the collective labour agreement

The duration of the collective agreement is fixed and may not be less than 12 months or more than 24 months. Once concluded, it enters into force after the date of registration with the ITM or at a later date if this has been agreed. The parties involved may decide to extend the contract for a maximum of 12 months, once only.

The collective agreement terminates in the following situations:

• when the term expires;
• when the work for which it was concluded is completed;
• on the date of dissolution or compulsory liquidation of the establishments;
• by agreement between the parties.

1.4. What does the collective agreement contain?

When drawing up a collective agreement, there are certain elements that should not be omitted. Mandatory clauses include:

• The parties to the contract - the employer and the employees, through their representatives;
• General provisions - things about duration, bindingness and other brief information about the negotiation;
• Provisions relating to the conclusion, execution, modification, suspension and termination of the individual employment contract;
• Working conditions and labour protection;
• Wage rights and pay;
• Working time, rest periods and days off in accordance with the law;
• Information on vocational training;
• Final provisions.

The purpose of a collective agreement is to protect the interests of both parties so that any conflicts that may arise in the workplace can be avoided and prevented. The terms of the collective agreement also include the provision of allowances for employees travelling on official business, the settlement of transport and accommodation costs, the conditions for suspending the contract and similar matters.

The documents required for the collective employment contract, for registration with the ITM, are:

• Certificate of registration with the Trade Register, in copy;
• the Memorandum or Articles of Association, in copy;
• A proof of convocation of the parties participating in the negotiation;
• Powers of attorney signed by the representatives of the parties and copies of their identity card;
• Evidence of the representativeness of the parties (for trade unions a copy of the civil judgment is required);
• Minutes confirming the appointment of the representatives and the signatures of those who participated in their election;
• Minutes of the negotiations, one copy for each signatory party and one for the depositary;
• Pay scale.

2. The collective labour agreement - the negotiation procedure and the stages of concluding such an agreement

In the absence of a collective agreement, either party may start the negotiation procedure at any time, provided that the legislation in force is respected. Companies needing assistance in drawing up or revising collective agreements can call on HR and payroll consultancy. In addition to the HR part that can be outsourced, the Mazars team in Romania offers support in a wide range of activities such as accounting or administrative services, which are designed to relieve firms of complex tasks. Thus, organisations can benefit from legal solutions to any financial, tax or HR issues.

2.1. The procedure for negotiating a collective agreement

If one does not already exist, the negotiation of the collective agreement can be initiated by either party. In companies where such a contract exists, you can ask for annexes to be added.
Collective bargaining must be initiated at least 45 calendar days before the expiry of the contract or the clauses in the addenda. If this is not done by the employer, employees or trade unions may request this in writing. The deadline for starting negotiations is 10 calendar days from the date of receipt of this request. The negotiation period may not exceed 60 days unless the parties agree.
Employers' organisations or employers may be penalised by labour inspectors for refusing to initiate the collective bargaining procedure.

2.2. Who negotiates the collective agreement?

At unit level, the collective labour agreement is negotiated by the representatives of the parties, namely:

• the management body, established by law, statute or operating regulations;
• the legally constituted trade unions, if they exist, the federation of the sector to which the union is affiliated or the elected representatives of the employees.

Negotiation takes place with employee representatives in the following situations:

• where there is no trade union.
• where there is a trade union in the unit but it is not representative and is not affiliated to a federation in the sector to which the unit belongs.

The number of elected representatives is agreed with the employer and the appointment must be made in accordance with the Labour Code. Their term of office shall not exceed 2 years. The main duties of the representatives are:

• Monitoring the respect of employees' rights and their compliance with the legislation in force, internal procedures, individual employment contracts and the collective agreement.
• Participating in the drafting of internal rules.
• Supporting and promoting the interests of employees in relation to pay, working conditions and working time, rest and other matters relating to working conditions.
• Negotiating the collective labour contract, under the conditions laid down by law.

2.3. The stages in concluding a collective agreement

The initiative to negotiate the collective agreement lies with the employer, who gives notice of the start of the procedures. The notice must be made public at least 15 days before the actual negotiation procedure begins. The next steps are:

• Confirmation or refusal to participate in the negotiation.
• The first meeting is convened and a written mandate is given to designate representatives of both parties who attend the meeting and who will negotiate and sign the collective agreement.
• Minutes are taken at each negotiating meeting.
• The negotiation procedure ends with the signing of the collective agreement for a period of between 12 and 24 months.

At the first negotiation meeting, public and confidential information is made available to trade unions or employee representatives, in accordance with the legislative framework for informing and consulting employees. The information includes data on the current economic and financial situation and the employment situation. The minutes of the first meeting record the following:

• the composition of the negotiating teams for each party, on the basis of written mandates;
• the names of the persons signing the collective agreement;
• the duration of the collective agreement negotiations;
• dates and venue of meetings;
• proof of representativeness of the parties taking part in the negotiations;
• proof that all the parties required to take part in the negotiation procedure have been convened;
• other documents related to the negotiation.

Each meeting ends with the signing of minutes by representatives of both parties. If the persons participating in the negotiation reach an agreement, the collective agreement is signed.

The entire negotiation file is submitted to the ITM and must include a number of documents such as the collective agreement, signed in an equal number of copies to the number of parties involved, proof that all parties have been called to the negotiation, the minutes for the election of the parties' representatives, the written powers of attorney of the employer and employees and, optionally, the internal rules.

The collective employment contract may be amended during its period of validity at the initiative of either party. Any amendment or addition shall also be made by negotiation under the conditions laid down by law. To this end, a request must be submitted to the other party at least 45 days before the proposed date for the start of negotiations. Amendments shall be made by means of additional acts, which shall be concluded in writing and negotiated and signed by the contracting parties, after which they shall be submitted and registered with the Territorial Labour Inspectorate. They become applicable from the date of registration with the ITM or at a later date agreed by both parties.

When a collective labour agreement is drawn up, it takes effect for both parties. Failure to fulfil the obligations assumed in the contract entails the liability of the party at fault.

The purpose of drawing up a collective agreement is to protect the interests and rights of both parties so that the risk of conflict in the workplace is limited. In such a document, clauses relating to working conditions and working relations are negotiated and the whole process must be based on the principle of equality between the parties, so that the interests of both employees and the employer are met.

The collective labour agreement therefore promotes fair labour relations and is a binding document for most employers in Romania. It protects the legitimate interests of the parties and contributes to creating a climate of social peace in any enterprise, whether state-owned or privately owned. Moreover, when they arise, labour disputes are resolved much more quickly and easily if there is a collective labour agreement. For support in drawing up or amending such a document, the consultancy services of specialist firms are extremely useful, ensuring efficiency and consistency in these procedures.

*Acest material a fost pregătit doar în scop informativ și nu are rolul de a oferi consultanță fiscală, juridică sau contabilă. Rcomandăm să vă sfătuiți cu echipa de consultanți fiscali, juridici și contabili înainte de a lua orice decizie cu privire la subiectele menționate în acest articol.

*This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.