An employer can stipulate at least four specific clauses in an individual employment contract, according to the Romanian Labour Code: the non-compete clause, the confidentiality clause, the mobility clause and the vocational training clause.
- The non-compete clause
As stipulated in Article 21 paragraph 2 of the Romanian Labour Code, the non-compete clause shall only take effect when the activities which are prohibited to the employee upon contract termination, the amount of the monthly non-compete benefit, the time limits of the non-compete clause, the third parties for whom it is prohibited to perform activities, and the geographical area where the employee may reasonably compete with the employer, have all been specifically provided for in the individual employment contract. Otherwise, this clause can be declared invalid by the Court.
The monthly non-compete benefit payable to the employee is not a wage-related benefit, should be negotiated, and must amount to at least 50% of the average gross wage income of the employee for the final six months before the termination of the employment contract or, if the duration of the individual employment contract was less than six months, of the average gross wage income payable to the employee during the contract period. Also, this clause may be imposed for a maximum of two years, according to the Romanian Labour Code.
The non-compete benefit represents an expense incurred by the employer, deductible when calculating the taxable income, and the tax shall be collected from the natural person who is the beneficiary, according to the law.
In case of failure to comply with this clause, the employee may have to refund the benefit. Also, the non-compete clause cannot entirely prevent the employee from practicing their profession, given the specialization they hold.
- The confidentiality clause
Contractually speaking, the confidentiality clause may be imposed to protect the operating policies of the company and the company’s clients that do not want to become known to the public. In order for the clause not to be in a position of being declared invalid, the company must clearly state what information is confidential. Confidential information may be established by the Company’s internal regulations, by collective bargaining agreements or individual employment contracts.
In case of a breach by any party, such liable party shall pay damages.
- The mobility clause
An individual employment contract may contain, in addition to general terms, other terms negotiated between the parties. One such term which is regulated by the Romanian Labour Code is the mobility clause.
By adding a mobility clause to the individual employment contract, the employee is made aware that their work for the company also requires work-related traveling, and that they are entitled to benefits in cash or in kind for such traveling. The employee will receive such benefits under the conditions established in the individual employment contract.
- The vocational training clause
The employees’ training process usually has well-defined main objectives and generally relates to each employee’s adaptation to job requirements, and to obtaining advanced knowledge needed for their professional activities.
According to the Romanian Labour Code, the employer shall ensure the participation of every employee in vocational training, as follows:
- at least once every two years, when it has at least 21 employees;
- at least once every three years, when it has less than 21 employees.
The actual vocational training method, the rights and obligations of the parties, the length of the vocational training, and any other issues related to vocational training, including the contractual obligations of the employee in relation to the employer that paid for such vocational training, shall be agreed upon by the parties and included in addenda to the individual employment contracts.
Also, employees having attended a vocational training course initiated and paid for by the employer may not initiate the termination of their individual employment contracts for the period stipulated in the relevant addenda.