In the field of Labour Law, the Costaș, Negru & Asociații team encounters various problems in practice. One of these problems is the fate of the individual employment contract, in the context of a retirement decision for the age limit for the employee.
By way of example, we encounter such a situation when, during the course of an individual employment contract, the employee receives a retirement decision for age limit. So the question that arises in this context is what happens to the individual employment contract? In concrete terms, what is of interest is whether or not the employee continues the employment relationship, which will be clarified below.
In the recent practice of the company Costaș, Negru and Associates, we have encountered a situation in which an employee whose application for retirement was accepted, asked the court to annul the employer’s decision on the grounds that it was abusive. Evidently, Bihor Court held that we are not talking about a dismissal, but about a simple employer’s decision stating that the individual employment contract has terminated by operation of law. The claim was therefore dismissed as unfounded.
Thus, according to Art. 56 para. 1 lit. c) Labor Code, the individual employment contract terminates automatically on the date of cumulative fulfillment of the standard age and minimum contribution period for retirement (…); on the date of the pension decision in the case of disability pension of degree III, partial early retirement, early retirement, retirement for old age with reduction of the standard retirement age; on the date of the medical decision on the ability to work in the case of disability of degree I or II.
In the light of the above-mentioned legal text, we note that an individual employment contract terminates by operation of law as soon as there is a retirement decision.
However, there are also cases in which the employee does not agree with the termination of the individual employment contract and wishes to continue working. For these situations, Art. 56 para. 4 of the Labor Code provides that the employer may agree that the employee may continue to work, but is not obliged to do so. Therefore, the fate of an individual employment contract, in the context of the existence of a retirement decision and the employee’s willingness to continue working, depends on the employer’s will.
The phrase ‘terminates by operation of law’ has been interpreted to mean that the employment relationship with the employer terminates by operation of law, irrespective of the employee’s choice. At the same time, the individual employment contract terminates when the cause of termination arises.
In other words, the employer’s decision to terminate is lawful, even if the employee expresses his or her intention to continue working.
Further, in legal doctrine and practice, it has been held that in the case of termination by law of the individual employment contract, for the reasons provided in Article 56 of the Labor Code, it is not necessary to fulfill any prior, mandatory formalities, since the termination occurs by law, ope legis, and it can only be found that such termination has occurred.
As a result, if in the other situations in which the individual employment contract is terminated, the legislator has imperatively provided for the need to issue a decision of dismissal or termination of the individual employment contract by agreement of the parties and, implicitly, has provided by mandatory legal provisions the form and content of such a decision, in the case of termination by right, the employer is no longer under the obligation to issue a decision in compliance with the requirements of Article 76 of the Labor Code, but, by any decision that is issued, only the case of termination by right of the individual employment contract is found to have arisen.
Further, the specialized doctrine provides that the legislator has ordered the issuance of a document confirming the termination of the individual employment contract in the sense instrumentum probationem. As a result, the employer’s decision, not being a dismissal decision, does not entail the obligation to issue it in compliance with Article 76 of the Labor Code. It only establishes that the individual employment contract has terminated by means of law.
Next, with regard to the cases of termination of the individual employment contract covered by Art. 56 para. 1 of the Labor Code, the legislator has provided that the employer is obliged to issue the decision establishing the occurrence of a case of termination by operation of law.
Therefore, a possible application for annulment of the employer’s decision on the grounds that it is abusive cannot be upheld. The reason is quite simple: the employer does not issue a dismissal decision, but merely finds that a case of termination of the individual contract of employment has occurred. Moreover, the employer is under an obligation to issue such a decision, and if the employee expresses his intention to continue his employment relationship, the employer is not obliged to approve such a request.
In conclusion, the answer to the question what happens to an individual employment contract when we have a retirement decision? is a simple one: it terminates by operation of law, and the employer is obliged to record this termination. It is also only possible for the employee to continue to work if the employer agrees, as the legal provisions offer this possibility.
This article was prepared for the blog of the law firm Costaș, Negru & Asociații by atty. Loredana Feier, from the Cluj Bar Association.
Costaș, Negru & Asociații is a law firm with offices in Cluj-Napoca, Bucharest and Arad, which provides assistance, legal representation and advice in several practice areas through a team of 20 lawyers and consultants. Details of the legal services and the composition of the team can be found at https://www.costas-negru.ro.
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