On November 2017, the Government adopted two legislative acts which generated lots of confusion and controversies within the companies, respectively Government Emergency Ordinance no. 79/2017 to amend the Fiscal Code (hereinafter “GEO no. 79/2017”) and Government Emergency Ordinance 82/2017 to amend and supplement some legislative acts (hereinafter “GEO no. 82/2017”).
The main fiscal change brought by GEO no. 79/2017 with a major impact on the employment relationships starting with 1 January 2018 is the transfer of mandatory social contributions set forth by the Fiscal Code (i.e. Contribution for Social Insurance and Social Health Insurance Contribution) from the employer to employee.
In the context of significant increase of the tax burden for the employees, GEO no. 82/2017 amended the Law no. 82/2001 on social dialogue with respect to employer’s obligation to collective negotiation.
This article aims to clarify the main aspects the employers are usually confused about by highlighting dos and don’ts under GEO no. 79/2017 and GEO no. 82/2017.
Implementation of fiscal changes provided by GEO no. 79/2017
- Pay a compensation in order to re-establish the net income, which is decreased as a result of the GEO 79. Given the unpredictability of the fiscal regulations, such compensation is to be granted by a company’s decision for a limited period of time, extension of its effects being subject of reassessment.
- Sign an addendum to the existing employment contracts. Employers have no obligation to increase the salaries so that the net wages to not be affected by the transfer of social contributions from employer to employee, neither by concluding addenda to individual labour agreement nor by concluding a collective bargaining agreement at the company level.
- Election of the employees’ representative: in case that in your company there are no employees’ representative, make sure you send a general message to start such elections. Importantly, the company should not get involved in any aspects related to such elections. However, if among your employees are trade union members, irrespective of representability, the company may not send the above mentioned message.
- Invitation to negotiations of collective bargaining agreement (“CBA”) for the implementation of the fiscal changes provided by GEO no. 79/2017. First of all, this legal obligation is incumbent to all the employers, regardless of the number of the employees, but is limited in time, until 20 December 2017. Distinction should be made between existing CBA and non-existing CBA. Employers already having collective bargaining agreements at the company level must initiate negotiations for additional acts to CBAs for the same purpose.
- There is NO obligation to actually conclude a collective bargaining agreement or an addendum to the existent collective agreement, but only to initiate the negotiations (which could have as result the agreement of the parties to not conclude such a contract).