In the Labour Code, technical unemployment is regulated under Articles 52 and 53 referring to the causes of suspension of the employment contract on the employer’s initiative.
What is the technical unemployment?
Thus, according to the legal rules indicated, technical unemployment implies a situation in which the employee’s individual employment contract is suspended as a result of the temporary interruption or reduction of the activity, without termination of employment, for economic, technological, structural or similar reasons.
What can do the employers who are facing economic difficulties?
In the current situation, where more and more employers are experiencing economic difficulties, they can:
- first resort to a temporary reduction of activity (with the corresponding reduction of working hours from 5 days to 4 days a week) and the corresponding reduction of the employees’ salary until the date of the lifting of the restrictions imposed by the State.
- or on temporary termination of employment, in which case employees will receive a technical unemployment benefit which may not be less than 75 % of the basic salary corresponding to the job occupied.
How is technical unemployment granted?
The modalities in which the technical unemployment allowance is granted are regulated under Emergency Ordinance No. 32/2020 on the amendment and completion of the Government Emergency Ordinance No. 30/2020 for amending and supplementing regulatory acts, as well as for establishing measures in the field of social protection in the context of the epidemiological situation caused by the spread of the SARS-CoV-2 coronavirus and for the establishment of additional social protection measures.
Within the framework of Article XI of OUG No 32/2020 is mentioned:
During the state of emergency established by Decree No 195/2020 on the establishment of a state of emergency on the territory of Romania, for the period of temporary suspension of the individual employment contract, on the initiative of the employer, in accordance with Article 52 para. (1) let. (b) of the Law No 53/2003-Labour Code, republished, with subsequent amendments and additions, as a result of the effects produced by the SARS-CoV-2 coronavirus, the allowances enjoyed by employees shall be fixed at 75% of the basic salary corresponding to the job occupied and shall be borne by the unemployment insurance budget, but not more than 75 % of the average gross earnings provided for by the Law on the State Social Insurance Budget for 2020 No. 6/2020, which is 5,429 lei.
According to the same normative act, employees will benefit from technical unemployment after completion of the legal formalities by the employers, i.e. after the employers will submit to the county employment agencies, as well as the municipality of Bucharest a model application signed and dated by the legal representative accompanied by a declaration on their own responsibility and the list of persons to benefit from this allowance, assumed by the legal representative of the employer.
Where the employer’s budget for the payment of staff costs permits, the technical unemployment benefit may be supplemented by amounts representing the difference of up to at least 75 % of the basic salary corresponding to the place of employment, in accordance with the provisions of Article 53 para. (1) of the Law No 53/2003 – Labour Code, republished, with subsequent amendments and additions.
Note that the technical unemployment allowance is subject to taxation and payment of compulsory social contributions, in accordance with the provisions of Law No. 227/2015 on the Tax Code, as amended and supplemented.
Who else can benefit from this allowance?
It shall also benefit from technical unemployment benefit for professionals and persons who have concluded individual labour agreements under Law No 1/2005 on the organisation and functioning of cooperation, which interrupts activity as a result of the effects of the SARS-CoV-2 coronavirus, during the state of emergency established by Decree No 195/2020 on the establishment of a state of emergency on the territory of Romania. In their case, the monthly allowance is 75% of the average gross earnings provided for by the Law on the State Social Insurance Budget for 2020, respectively 5,429 lei.
What about lawyers?
Lawyers whose activity is reduced as a result of the effects of the SARS-CoV-2 coronavirus, during the period of the state of emergency, are also entitled to the technical unemployment benefit, if in the month for which they are claiming the allowance they have earned at least 25% lower than the monthly average for 2019, but which do not exceed the average gross earnings provided for by Law No. 6/2020 and 5,429 lei respectively. The allowance is paid on the basis of the lawyer’s declaration on the fulfilment of the conditions for granting it, which he transmits to the county payments and social inspection agency, respectively the municipality of Bucharest, in whose territorial area the tax domicile is located.
There are also exceptions to the payment of the technical unemployment allowance for employees who have concluded several individual employment contracts of which at least one full-time contract is active during the establishment of the state of emergency, and in which case he does not benefit from the technical unemployment benefit.
In the event that an employee has several individual employment contracts and all are suspended as a result of the establishment of the state of emergency, he receives technical unemployment benefits for the individual employment contract with the most advantageous wage rights.
These are some of the important regulations on technical unemployment given the current context that requires drastic measures to prevent and get over the SARS-CoV-2 coronavirus pandemic as quickly as possible.
Importantly, the law allows us to get over the current economic crisis more easily through technical unemployment, especially with regard to employers who are able to keep their business and return to business after lifting legal prohibitions without losing employees.
Lawyer at R&R Partners Bucharest
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