Recent Rulings By Romania’s High Court Clarify Thorny Issues In Labor And Employment Law

In Romania, the inconsistent interpretation and application of legal provisions by the courts have resulted in uneven and confusing case law and, in general, in an increased degree of uncertainty with respect to the predictability of litigation outcome. Under the Romanian legal system, the High Court of Cassation and Justice (High Court) has final authority in unifying divergent case law through a special type of ruling—one that is issued following a so-called "appeal in the interest of law" ("recurs in interesul legii") filed by the country's General Prosecutor to restore legal certainty if, as the jurisprudence around existing legal provisions evolves, different opinions or interpretations of the lower courts are reported.

Labor law has finally made it to the agenda of Romania's High Court, which has recently ruled on three important topics, outlined below. In doing so, the High Court has created a binding judicial precedent which sets out the mandatory rules for any subsequent cases involving identical or similar situations, trialed in front of the High Court itself or in lower courts in the judicial hierarchy.

The capacity of unions to bring court actions on behalf of their members

Through Decision no. 1/2013, the High Court has shed light on a matter that initially arose under the previous law on unions, Law 54/2003, as amended, now replaced by Law 62/2011 on the Social Dialogue, which, even if it brought about great reforms, failed to clarify this issue. There were two different opinions in the jurisprudence regarding the capacity of unions to bring a direct court action in connection with the rights and interests of its members. One opinion says that the union itself did not have litigation standing in its own name and it could only represent its members, to the extent to which union members themselves launched a court action. Another opinion says that unions were allowed to initiate a court action even in the absence of a direct mandate from its members, to defend their rights and interests.

The latter opinion has prevailed and been acknowledged by the High Court, which has thus consecrated the independent standing of unions in court. As a result, unions can initiate litigation to the individual or collective benefit of their members.

It is important to note that union members retain the so-called "litigation disposition rights" at all times, which means that they may withdraw the claim and thus stop the trial if they choose to do...