Government Decision on the conditions for authorization and functioning of the temporary-work agency

Government Decision No. 1256/2011 on functioning conditions and the procedure for authorizing the temporary-work agency was recently published in Official Gazette No. 5/04.01.2012 ( “Decision”).

The Decision comes into force within 30 days of its publication in the Official Gazette and repeals Government Decision No. 989/2004 which so far provided the legal framework on this subject.

The Decision transposes the provisions of Directive 2008/104/CE of the European Parliament and European Council dated 19.11.2008 and aligns the authorization and functioning conditions of the temporary-work agency to the provisions of the Labour Code, as amended during 2011.

In view of these legislative changes, we consider it of importance to provide some concise information on the conditions of authorization and operation of the temporary-work agency.

Procedure for authorization of temporary-work agency

Contrary to the previous regulations, the Decision widens its domain of applicability and simplifies the authorization procedure of temporary-work agencies by eliminating the fees for authorization and the extension of authorization.

Thus, the Decision shall apply to all legal entities, public or private, authorized as temporary-work agency, as well as to user undertakings carrying out economic activities, whether or not for profit.

The status of temporary worker may be acquired by Romanian citizens, foreign citizens or stateless persons domiciled or residing in Romania, but only on a work permit or residence permit for work.

The temporary-work agency is authorised by the Ministry of Labour, Family and Social Protection based on a dossier prepared according to Art 4 (2) of the Decision and submitted to the territorial agencies for social benefits.

Among the specific conditions for authorizing temporary-work agency include:

The main object of activity “Contracting personnel on a temporary basis”;

Establishment of a guarantee covering the equivalent of 25 minimum gross base salaries in the country, as well as employer contributions owed to the state social insurance budget, unemployment insurance budget and the National Fund for Health Insurance budget.

The deadline for issuing the authorization is 30 days after submitting a complete application file, the applicant having 7 working days for completing the documentation.

Refusal of the authorization must be substantiated and can be challenged before the Ministry of Labour, Family and Social Protection within 30 days of its communication.

The functioning authorization is valid for 2 years. The term may be extended every 2 years by submitting a similar dossier to the relevant authority at least 3 months before the expiry of the authorization.

Functioning of temporary-work agency

Within 15 days of authorization, temporary-work agencies shall register with the National Register of temporary-work agencies. The Register is published in the Official Gazette and on the website of the Ministry of Labour, Family and Social Protection.

For each temporary assignment, the temporary-work agency shall sign a temporary employment contract with the temporary worker in Romanian that includes the elements provided in Art. 94 (2) of the Labour Code.

Temporary employment contracts may be concluded for several temporary assignments terminating upon completion of the last assignment. Under the Labour Code, the total duration of the contract must not exceed 36 months.

Temporary-work agencies are required to maintain records of temporary work contracts and register these in the General Registry of Employees.

A temporary-work agency offers a temporary employee to the user undertaking under a written contract that includes the elements provided by Art. 91 (2) of the Labour Code.

Upon ceasing activity, the temporary-work agency is required to submit the functioning authorization to the territorial agency for social benefits and observe the requirements of Law No. 16/1996 on the National Archives.

The Decision lays down the conditions under which the functioning authorization can be withdrawn, namely: in case of penalties for non-observance of the obligations under the Decision and in case insolvency procedures have been launched for a temporary-work agency.

By Venkatesh Srinivasan, Partner – Head of Tax and Legal, Ernst & Young Romania

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