Employment Flash News No. 3/2015
Case Law
News on collective dismissals during the insolvency procedure
Decision no. 64 dated February 24, 2015 of the Constitutional Court regarding the constitutionality of Art. 86 para. (6) of Law no. 85/2006 setting forth the insolvency procedure of the Constitutional Court was published within the Official Gazette no. 286 dated April 28, 2015. According to art. 86 alin. (6) of Law no. 85/2006 “By way of exception from the legal provisions of Law no. 53/2003 – the Labour Code, subsequently amended and supplemented, following the opening date of the proceeding, the individual labour contracts of the debtor’s employees will be urgently terminated by the official receiver/liquidator, without being necessary to undergo the collective dismissal procedure. The official receiver/liquidator will give to the dismissed employees only the notice period of 15 working days.”
The constitutional challenge of these provisions was raised in court files related to dismissals decisions issued during the insolvency procedure. In support of this challenge it was asserted that, in a nutshell, the legal provisions are unconstitutional because they are precluding, in the hypothesis of an employer undergoing the insolvency procedure, the employees’ right to consultation and information during the collective dismissals, this right being generally recognized to the employees and expressly regulated within Art. 69 and the following of the Labour Code, establishing also an exception as regards the notice period which has to be observed in this situation.
When examining the constitutional challenge, the Court ruled that Art. 86 para. (6) of Law no. 85/2006 contains two different hypothesis that come under the same legal provisions, namely the collective dismissal procedure in the situation of judicial reorganization or company’s liquidation. Both situations are exceptions from the regulatory framework in this matter, namely Law no. 53/2003 – Labour Code as regards the information and consultation of employees and the notice period.
As regards the first hypothesis of the above-mentioned article, after analyzing the provisions of the EU and international legislation and case-law by reference to the Romanian Constitution and internal legislation in this matter, the Court ruled that information and consultation of employees are constitutive elements of the right to social protection measures in the work field, as such right is set by Art. 41 para. (2) of the Constitution.
Under such circumstances, the Court ruled that the employees’ right to information and consultation during the collective dismissals will be applicable to any collective dismissal, regardless the specific features of the field where such process occurs.
In the case at hand, the Court noticed that, through the particular way the legislator understood to regulate the collective dismissals procedure as regards a company that undergoes an insolvency procedure, the employees’ right to information and consultation was denied, overlooking the provisions of art. 41 alin. (2) from the Constitution.
On the other hand, the Court held that Law no. 85/2006 was repealed through Law no. 85/2014 regarding the procedures for preventing insolvency and insolvency proceedings, published within the Official Gazette no. 466 dated June 25, 2014. The new legislative framework changes the legal solution challenged in the case at hand, the new provisions setting forth that “the official receiver/liquidator will grant the dismissed employees only the legal notice period and, where the provisions of Law no. 53/2003 Labour Code, as republished and subsequently amended and supplemented, regarding the collective dismissals will apply, the periods mentioned in art. 71 (employee consultation) and art. 72 alin. (1) (notification of the decision to implement collective dismissals to the labour authorities) of Law no. 53/2003 Labour Code, as republished and subsequently amended and supplemented, will be reduced to half.” Given this particular situation the Court has held that the decision for declaring Art. 86 para. (6) first thesis of Law no. 85/2006 unconstitutional will be directly applied to all the undergoing disputes, and, at the same time will be a motive for revising the court decisions in the conditions set forth by the Civil Procedure Code. For the situations born under the new provisions of Law no. 85/2014 the latter’s provisions which remedied the previous insolvency regulation’s deficiencies will be applicable.
As regards the second thesis of art. 86 alin. (6), the Court noticed that establishing a notice period of 15 days is the legislator’s choice, and given the specific situation of the insolvency procedure, and the fact that the legal provisions are precise and predictable, the provision’s recipient being capable to adapt his behavior depending on its content, it cannot be arguable that these provisions are breaching the principle of obligatory observance of the law established in art. 1 alin. (5) of the Romanian Constitution.
