Position Elimination
The Labor Code allows the employer to eliminate certain positions when facing economic difficulties or when a reorganization of activities becomes necessary. Upon identifying these objective reasons, the employer, following an economic and financial analysis of the activities, can decide whether the elimination of one or more positions is necessary. If the decision to eliminate a position is approved by the company’s management, a new organizational chart reflecting the position’s elimination must be adopted.
According to Article 65 of the Labor Code, the elimination of a job position must be:
- Effective;
The elimination is effective when the job position is removed from the employer’s structure, no longer appearing in its organizational chart or in the staff roster. For example, the elimination of a position is not effective if the job duties previously performed by the terminated employee continue to be carried out by another employee, even if the new position has the same or a different title but performs the same duties as the former employee.
- Genuine;
The cause is genuine when it has an objective character, meaning it is imposed by economic difficulties or technological changes, independent of the employer’s good or bad faith.
- Serious;
The cause is serious when it arises from evident needs for improving activities and does not conceal the reality. By thoroughly analyzing the termination decision’s validity and the documents underlying it, the court verifies whether the position’s elimination was indeed appropriate, i.e., whether it was suitable for a specific time and place, determined by objective circumstances. For example, the elimination of a job position in a geographic area where employees have a satisfactory performance, the employer’s activities in that area are profitable, and there are no issues, cannot be considered appropriate.
It is worth noting that in labor disputes, unlike the general rule where the burden of proof lies with the party making a claim before the court, the burden of proof falls on the employer. Therefore, in this situation, the employer, as the defendant, is obligated to prove the genuine and serious cause for eliminating the job position and the fact that the position was effectively eliminated. Furthermore, the law establishes that in a labor dispute, the employer cannot invoke before the court reasons of fact or law other than those specified in the termination decision (Article 79 of the Labor Code).
Nevertheless, the legal entity has the right to reorganize its activities based on its needs for profitability. The legal rules regarding termination aim to protect the employee from the employer’s abusive actions, without implying that the employee’s interest takes precedence over that of the employer. Once the employer demonstrates that the position’s elimination is a consequence of the activity’s reorganization, decided upon a reorganization strategy aimed at profitability, including reducing personnel expenses, the cause becomes genuine and serious, and the termination is well-founded and legal.
➡📞Contact: (+4) 031 426 0745 – office@grecupartners.ro
Bianca Dan – Attorney at Law
