A Western European manufacturer had operated a Romanian subsidiary for several years. When it restructured its local workforce, a group of employees challenged both the individual dismissal notices and the underlying termination procedure. The company faced simultaneous claims before the Romanian labour courts – and its parent board had no prior experience with Romanian employment legislation.
Resolving an employment dispute in Romania requires engaging the country's labour court system, which operates under a strict timetable from claim filing to first hearing. The applicable employment contract terms, any relevant collective agreement, and the procedural requirements of Romanian employment legislation all govern how the case unfolds. Disputes are typically resolved within six to eighteen months, depending on the complexity of the claims and whether appeals are pursued.
This case study sets out how Ferraz & Whitmore structured the defence strategy, the milestones reached along the way, the complications encountered, and the lessons that apply to comparable cross-border employment matters in Romania.
Client profile and the challenge they faced
The client was the Romanian subsidiary of a mid-sized industrial group headquartered in Northern Europe. Following a strategic review, the group decided to close one production line and reduce headcount at the Romanian site. Management issued individual dismissal notices to twelve employees and provided what it believed was the required notice period under each employment contract.
Three employees filed claims within days of receiving their notices. They argued that the termination procedure was defective on multiple grounds. First, they contended that the dismissal notices lacked the specific reasons required under Romanian employment legislation. Second, they argued that the applicable collective agreement imposed a longer notice period than the one actually observed. Third, two claimants raised social security calculation disputes, alleging that their final settlement statements understated accrued entitlements.
The parent company's in-house team initially attempted to manage the response directly. Within two weeks, it became clear that Romanian procedural rules. including mandatory pre-litigation steps and strict deadlines for submitting evidence – required specialist local counsel working alongside international advisers who understood the group's cross-border exposure.
For advice on how Romanian employment law in Romania applies to workforce restructurings and individual dismissal procedures, structured guidance is available from our practice team.
Legal strategy: rationale and key decisions
The first decision was procedural. Romanian labour courts operate under rules that front-load evidence submission. A party that fails to submit supporting documents at the first hearing risks having that evidence excluded at later stages. The strategy therefore prioritised compiling the full documentary record before the initial hearing date.
The core of the defence rested on two arguments. The dismissal notices did, in fact, contain the legally required reasoning – but that reasoning had been drafted in a standardised format that Romanian courts have, in a line of cases, scrutinised closely. The team revised the characterisation of the notices for the court record, demonstrating that the substance met the requirements of Romanian employment legislation even where the form was arguably inelegant.
On the collective agreement point, the applicable instrument had expired and had not been formally renewed before the restructuring was announced. Under Romanian employment legislation, the terms of an expired collective agreement continue to apply until a new one is concluded or a specific period lapses. Establishing the precise status of that agreement – and the date on which it ceased to bind the parties – was pivotal. The team obtained certified records from the relevant authority and built a timeline that supported the employer's position on notice periods.
The social security calculation disputes were handled separately. These were referred to Romania's social security authority for administrative review, running in parallel with the court proceedings. Keeping them out of the labour court file prevented the factual record from becoming unnecessarily complicated.
Where the corporate dimension intersected with the employment claims. particularly on questions of group liability and the allocation of restructuring costs. the team coordinated with colleagues advising on corporate law in Romania to ensure consistent positions across both workstreams.
Key milestones and complications encountered
The first hearing took place approximately six weeks after the claims were filed. At that stage, the court set a schedule for the exchange of written submissions and fixed a date for witness examination. The timeline was tighter than the parent company had anticipated.
A significant complication arose when one claimant amended the claim to add a request for reinstatement alongside the original claim for compensation. Under Romanian employment legislation, reinstatement claims carry a different procedural weight. The court must examine whether the dismissal was unlawful before it can award any remedy. This amendment extended the factual inquiry and required the team to prepare additional evidence on the decision-making process that preceded the restructuring.
A second complication involved the collective agreement records. The authority holding the registration documents had undergone an internal reorganisation. Retrieving certified copies took longer than expected – nearly four weeks – which required the team to seek a short extension from the court. The court granted it, but the experience underscored the importance of initiating documentary retrieval immediately upon receiving a claim.
The social security track resolved first. The administrative review confirmed that the original calculations were accurate on two of the three disputed items. A minor adjustment was made on the third. This partial resolution reduced the overall exposure and, importantly, removed a factual issue that could have complicated the court proceedings.
The labour court issued its decision approximately fourteen months after the first claim was filed. The outcome fell within the category of a partial employer success: the court upheld the termination procedure as valid, rejected the reinstatement request. Additionally. Awarded one claimant a modest compensatory sum on a narrower ground that had not been fully addressed in the initial notice documentation.
To discuss how a comparable situation might be structured in your matter, contact us at info@ferrazwhitmore.com.
Transferable lessons for cross-border employment disputes in Romania
Three lessons emerge from this matter that apply directly to similar situations involving international employers and Romanian employment litigation.
Document the termination procedure before issuing notices. Romanian courts examine the procedural record in detail. An employer that cannot demonstrate each step of the internal process – from the business case for restructuring through to the individual dismissal notice – faces a significantly harder defence. Practitioners advising a law firm in Romania on cross-border restructurings consistently note that pre-issuance review of the full procedural chain is the single most effective risk-reduction measure available.
Verify the status of every collective agreement before acting. The status of a collective agreement at the moment of restructuring determines which notice periods, consultation requirements, and benefit calculations apply. International employers often assume that an expired agreement no longer binds them. Under Romanian employment legislation, that assumption is incorrect until the relevant transition period has elapsed. Confirming the agreement's status with the competent registration authority – and documenting that confirmation – should precede any restructuring announcement.
Separate administrative and judicial tracks where possible. Social security disputes and labour court claims can proceed in parallel. Keeping them separate prevents a straightforward administrative matter from contaminating the court record with contested factual material. It also allows the administrative track to resolve faster, which can reduce overall exposure and create a cleaner evidentiary picture for the court proceedings. Engaging a lawyer in Romania with experience across both tracks is essential to managing this separation effectively.
For comparable matters involving a Portuguese workforce, our analysis of a related employment dispute in Portugal illustrates how these principles translate across civil law jurisdictions.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our employment law practice supports international employers managing workforce restructurings, individual dismissal disputes, and collective agreement compliance across European markets, including Romania. Our attorneys have advised on employment matters spanning both civil law and common law systems, and the firm's Lisbon base provides direct access to EU regulatory frameworks that shape cross-border employment obligations. We work with multinational groups, in-house legal teams, and institutional investors who require results-oriented counsel across multiple legal systems. To explore how we can support your employment matter in Romania, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.