In the current context of the labor market, the relationship between employee and employer is regulated by individual employment contracts, which establish the rights and obligations of each party. The choice of the type of contract plays an important role in the stability of the job, as well as the adaptability of the company to the labor market dynamics. The most common forms of contracts are open-ended and fixed-term contracts, each with distinct characteristics, advantages and disadvantages that influence both the professional development of the employee and the employer’s strategies. 

According to Art. 12 para. (1) of the Labor Code provides that the rule is that an individual employment contract is concluded for an indefinite period, but para. (2) by reference to art. 83 establishes that there are exceptions, and the individual employment contract is also concluded for fixed period in the following cases: 

• the replacement of an employee in the event of suspension of his or her employment contract, unless that employee participates in a strike;
• temporary increase and/or modification of the structure of the employer’s activity;
• seasonal activities;
• in the situation in which it is concluded pursuant to legal provisions issued for the purpose of temporarily favoring certain categories of unemployed persons;
• the employment of a person who, within 5 years from the date of employment, fulfills the retirement conditions for the age limit;
• holding an eligible position in a trade union, employers’ or non-governmental organization during the term of office;
• employment of pensioners who, in accordance with the law, may combine pension and salary;
• in other cases expressly provided for by special laws or for carrying out works, projects or programs.

In order to be hired, for both types of contracts, the employer has the obligation to inform the employee about the essential elements provided by Art. 17 para. (3), and in the case of a fixed-term contract, the duration of the contract.

A fixed-term individual employment contract may be concluded only in writing, expressly specifying the duration for which it is concluded.

No more than three individual fixed-term employment contracts may be concluded successively between the same parties.

Individual fixed-term employment contracts concluded within 3 months of the termination of a fixed-term employment contract shall be considered successive contracts and may not exceed 12 months each.

Probation period

At the conclusion of the employment contract, a period of not more than 90 days for executive positions and not more than 120 days for managerial positions may be set for the verification of the employee’s aptitudes.

In the case of fixed-term employment contracts, a probation period is set which is reduced in proportion to the duration of the contract and may not be longer than:

• 5 working days for an individual employment contract of less than 3 months;
• 15 working days for an individual employment contract of between 3 and 6 months;
• 30 working days for an individual employment contract of more than 6 months;
• 45 working days in the case of employees in managerial positions, for a duration of the individual employment contract exceeding 6 months.

A fixed-term individual employment contract cannot be concluded for a period longer than 36 months.

If this type of contract is concluded in order to replace an employee whose contract is suspended, the duration of the contract will end when the reasons which led to the suspension of the contract of the employee cease to apply.

Employees with a fixed-term individual employment contract must enjoy the same employment and working conditions as comparable permanent employees, without being disadvantaged solely because of the duration of the contract. Exceptions are permitted only if there are objective reasons justifying different treatment.

Employers are obliged to inform employees with a fixed-term individual employment contract of vacancies or future vacancies that match their professional qualifications, giving them the same chances of access to these jobs as employees with an individual employment contract of indefinite duration. This information is given through an advertisement posted at the employer’s premises.

Unlike employment contracts for an indefinite period, the provisions of Articles 68-73 of the Labor Code, which regulate collective dismissals, do not apply to individual employment contracts for a fixed term, except in situations where the dismissals take place before the expiration of the term of such contracts.

An employment contract of indefinite duration does not have a fixed termination date and is valid as long as one of the parties does not decide to terminate it for various reasons, unlike a fixed-term employment contract which can be terminated by operation of law at the end of the fixed term. However, after the expiry of the term, the parties may, by mutual agreement, either extend its validity or convert it into an individual employment contract of indefinite duration.

The duration of annual rest leave is the same as that granted to employees in comparable situations, but the number of days of leave to which the employee is entitled will be calculated according to the duration of the contract, if it is shorter than 12 months.

Whether it is an individual employment contract for an indefinite period or a fixed-term contract, both types can be full-time or allow for part-time or part-time work schedules.

Among the types of fixed-term employment contracts are the professional adaptation contract, which cannot be longer than 1 year, and the on-the-job apprenticeship contract.

The decision to enter into an employment contract of indefinite or fixed duration depends both on the employer’s needs and the employee’s preferences. While an open-ended contract offers the employee more stability and protection, a fixed-term contract offers flexibility to the employer, but also involves certain restrictions.

Author: Atty. Felicia Cioflan