Individual employment contract - useful information for companies and HR employees

Publication date: 16 May 2023

In this article you will learn the exact definition of an individual employment contract, what it must contain, how it can be amended, what its effects are and other useful information to make its importance easier to understand.

Contents:

1. Individual employment contract - what is the individual employment contract, its content and modification

1.1. What is the individual employment contract, what documents are required and under what conditions can it be modified?

1.2. Elements and content of the individual employment contract

2. The individual employment contract - effects, rights and obligations of employers and employees

2.1. Effects of the individual employment contract

2.2. Termination of individual employment contract

1. Individual employment contract - what is the individual employment contract, its content and modification

The individual employment contract is a document between the employer and the employee that establishes and describes the legal relationship between them. According to the Labour Code, any type of individual employment contract must be in writing and based on the consent of both parties. The employer is also obliged to register the employment contract in the electronic employee programme (REVISAL) before the employment relationship begins.

The individual employment contract contains a number of important provisions, such as the employer's registered office or address, the position held, the job description or other regulatory documents. Below you will find out what the individual employment contract means and what it contains.

1.1. What is the individual employment contract, what documents are required and under what conditions can it be modified?

An individual employment contract (ICO) is a legal act by which a natural person called an employee undertakes to perform work for an employer in return for which he receives a monthly salary. It must be recognised by both contracting parties, third parties and the competent institutions. The individual employment contract can only be concluded in compliance with the legal provisions. According to the Labour Code, it must be concluded in writing, at the latest the day before the employee starts work, in two copies. The employer is obliged to give the employee one of them.

In short, the purpose of an individual employment contract is the performance of work by the employee and the payment of remuneration by the employer.

The documents required for the conclusion of the individual employment contract are as follows:

• Copy of identity card/ID card or proof of residence;
• Copies of educational documents;
• Copies of certificates of attendance at training or further training courses;
• Certificate of aptitude or opinion of the occupational physician.

In addition to these, the employer may also request other documents which he considers important for the proper conduct of the employment relationship, depending on the specific nature of the post. Some examples are:

• Medical certificate issued by the employee's family doctor;
• Birth certificate;
• Marriage certificate or divorce decree;
• Copies of certificates from previous jobs (seniority certificate or termination decision);
• Recommendations;
• Criminal record;
• Copy of driving licence;
• Bank statement for the account to which the salary is to be transferred.

Modification of the individual employment contract

If new laws are adopted during the period in which the contract takes effect, the individual employment contract shall be amended in accordance with the new legal provisions and only by agreement of the parties. Amendments may relate to any of the elements of the contract, such as duration, place and type of work, conditions, pay, working time and rest time.

The place of work provided for in the collective agreement may be changed by the employer through delegation or secondment. Delegation may be ordered for a maximum of 60 calendar days and may be extended for successive periods of up to 60 calendar days only with the agreement of the employee. Throughout this period the employee retains all the rights to which he is entitled by virtue of the individual employment contract. Secondment involves a temporary change of place of work to another employer for the purpose of carrying out work and may be for a maximum of one year.

Where is the Individual Employment Contract registered and how can I check if it is active?

The above documents are kept by the employer in a personnel file, together with the individual employment contract registered in REVISAL and signed by both parties. Checking the employment contract and whether it is active in the Electronic Register of Employee Records can be done very simply by asking the employer for a copy of the Revisal sent to the ITM. A unique registration number used for transmission to REVISAL must also be entered on the contract.

Who can sign the individual employment contract?

As far as the legal capacity of the employee is concerned, persons who have reached the age of 16 may sign individual employment contracts. It is also possible to sign an employment contract at the age of 15, but only with the consent of parents or legal representatives. Of course, the activities at the workplace must correspond to the physical development and aptitudes of the person concerned, so as not to endanger their health and development. Employment of under-15s is prohibited by law.

Also, according to the Labour Code, the employer is the natural or legal person who may employ labour on the basis of a contract that complies with the legal provisions. Natural persons acquire this capacity when they acquire full capacity to exercise their rights, and legal persons when they acquire legal personality.

1.2. Elements and content of the individual employment contract

The individual employment contract does not necessarily have a standard form, but it must include some mandatory elements to be a legal document. The content can be adapted to suit the situation and each workplace, as long as a few essential drafting rules are respected.

The individual employment contract contains some mandatory elements:

• Identity of the contracting parties;
• The place of work and the employer's place of business or the possibility that the employee may work in different places; in this case it shall also be stated whether the travel of the person is provided and paid for by the employer.
• Position held, according to the Romanian Classification of Occupations (COR);
• The job description and the duties of the employee;
• Evaluation criteria;
• The specific risks of the post;
• Duration of the individual employment contract;
• Date on which the contract will take effect and the date of expiry in the case of a fixed-term or temporary employment contract;
• Duration of rest leave;
• Conditions for giving notice in the event of dismissal or resignation;
• Salary and frequency of payment;
• Other salary details such as extra benefits (accommodation, bonuses, gift vouchers, bonuses and others);
• Working time expressed in hours per day and hours per week;
• The collective employment contract governing the employee's employment conditions;
• The conditions and duration of the probationary period.

Any modification of any of the above elements requires the conclusion of an additional act to the contract. Exceptions are cases where changes are expressly provided for by law or in the applicable collective agreement.

The content of the individual employment contract also includes other specific clauses, such as clauses on training, non-competition, mobility or confidentiality.

2. The individual employment contract - effects, rights and obligations of employers and employees

When it comes to HR work within a company, the legislation is quite complex. The same is true when it comes to accounting, payroll or various financial reporting. For this reason, companies frequently turn to HR and payroll consultancy, accounting consultancy or other types of administrative services. In order to comply with the legal and regulatory frameworks between employee and employer, an important role is played by the individual employment contract - a very legally binding document that has effects on both parties.

Find out more about the rights and obligations of both employees and employers when concluding such a contract.

2.1. Effects of the individual employment contract

The three elements of the employment contract are the performance of work, which is an obligation of the employee, remuneration, which is an obligation of the employer, and the existence of a relationship of subordination between the employee and the employer. However, the effects of the individual employment contract are much broader and cover all the rights and obligations of both contracting parties.

The main obligations of employees are linked to compliance with all the clauses imposed by the employer in the employment contract. These include the obligation to comply with the work rules and to carry out the duties assigned to them, the obligation to comply with the internal rules, the obligation to comply with health and safety measures at work and the obligation to observe professional secrecy.

Employers also have a number of obligations arising from the employment relationship, including paying wages within the time limits laid down in the contract, providing fringe benefits, ensuring safe and hygienic working conditions, regularly communicating the financial and economic situation of the establishment, paying the contributions and taxes for which they are responsible, and issuing on request the documents attesting to employee status.

With regard to rights, according to Article 39 of the Labour Code, employees must benefit from:

• Remuneration for work done;
• Daily and weekly rest;
• Annual rest leave;
• Dignity in employment relationships;
• Equal opportunities and treatment;
• Access to vocational training;
• Occupational health and safety;
• Information and consultation;
• Protection in the event of dismissal;
• Possibility to participate in collective and individual bargaining;
• Possibility to participate in collective action;
• Right to join a trade union.

The employer has the following rights:

• Establishing the organisation and functioning of the company;
• Establishing the duties of each employee under the conditions laid down by law;
• Establishment of provisions of a binding nature for the employee, in compliance with legal rules;
• Controlling the way in which work tasks are carried out;
• Detecting disciplinary offences and applying the appropriate sanctions, as provided for in the internal regulations and in the applicable collective labour agreement;
• Establishing performance objectives for each employee and how to evaluate them.

2.2. Termination of individual employment contract

An individual employment contract may be terminated under the following conditions:

• As of right;
• By agreement of the parties on the date agreed between them;
• By the unilateral will of either party and by compliance with the conditions laid down by law.

An individual employment contract is terminated by operation of law when various situations occur, such as the death of the employee, the cumulative fulfilment of the standard retirement age and minimum contribution period conditions, following the declaration of invalidity of the individual employment contract, the sentencing of the employee to a custodial sentence, the expiry of the term of the fixed-term contract or in other cases provided for in the Labour Code.

The employee has the unilateral right to make a request for resignation or, in certain specific situations (illness, studies), a request for suspension of the individual employment contract. This implies an obligation for the employee to continue working during the notice period.

Another situation in which the employment contract may be terminated is by dismissal, which is at the employer's initiative. In this case too, there are a number of legal regulations which both parties must comply with. Dismissal is prohibited in the following situations:

• In a period of temporary incapacity for work;
• Throughout the period of maternity leave;
• During parental or childcare leave;
• For pregnant women, if the employer was aware of this before the decision to dismiss was taken;
• During the exercise of a trade union function or during rest leave.

In conclusion, the individual employment contract is a document signed between the employer and the employee and forms the basis for fair and equitable employment relations. It is an important instrument for both parties involved and must comply with all the legal provisions of the Labour Code. Manage your entire human resources activity more easily with labour law advice, in line with the latest changes to all the rules in this area.

*This material has been prepared for information purposes only and is not intended to provide tax, legal or accounting advice. We recommend that you consult with your tax, legal and accounting team before making any decisions on the topics mentioned in this article.