Presentation by Prof Dr Catalin Ghinararu (National Scientific Research Institute on Labour and Social Protection of Romania) on the occasion of the EESC LMO conference on "Typical and atypical work contracts - advantages and disadvantages from the labour market perspective" in Warsaw, Poland, on 8/9 April 2013.

1. Atypical Contracts – Atypical Labor
Market
The case of ROMANIA
Presentation by Dr. Catalin Ghinararu, Scientific secretary National Labor
Research Institute of Romania (INCSMPS)
Bucharest, ROMANIA
Warsaw seminar of the European Social and Economic Committee,
POLAND
8-9 Apr. 2013

2. A Labor Market Apart
∗ Romania’s labour market features simultaneously:
∗ Low Participation and
∗ Low unemployment Rates
∗ At least from a purely statistical point of view, agriculture makes
for almost one third of total employment;
∗ Outward mobility (workers abroad) remains high: Preferred
destinations - EU countries (e.g.: Italy, Spain, Germany, France, UK
and Ireland);
∗ Most of it however remains, at least in statistical terms, short-term
(less than 6 months);
∗ Permanent (un-determined duration) contracts considered as THE
RULE (acc.to Labor Code) while Temporary ones (determined
duration) as THE EXCEPTION!

3. Statistics at a Glance
Long-term average (2005,q1-2011,q4) average values 2011 latest as of 2012 Q2
Job vacancy rate 0,2 0,6 0,59
Employment rate 15-64 58,6 58,5 60
Employmen rate 15+ 50,8 50,3 51,5
Total Employment (mil.pers.) 9,3 9,1 9,36
Unemployment rate (harmonized) 6,9 7,4 6,9
Unemployment rate (national def.) 5,6 5,3 4,68

4. Growth, Job Churning and
Job Generation; What’s the
difference? (1)
Growth or crisis made no much of
difference in terms of job generation
which remained rather subdued;
Employment rates have moved inside a
rather narrow band of variation for the
15-64 throughout a period between
q1.2005 and q4.2011;
When removing seasonal variation,
employment rates for the working age
show a stable line, insensitive to
growth or decline in economic activity;
Job vacancy or what we call job
churning, has shown itself more
dynamic and sensitive to variations in
the pace of growth;
However this only means that better
skilled workers have been more
dynamic and seized opportunities
created by growth (inter-job mobility)
rather than genuine job generation
(creation of new jobs) taking place;

5. Growth, Job Churning and Job
Generation; What’s the difference?
(2)
All major LM aggregates show a
certain, quite significant
sensitivity to variations in
economic activity (proxy by GDP
%);
However while unemployment
rates (both national and
harmonized) as well as job
vacancy rate move in conjunction
with the rate of growth, job
generation (proxy Employment
Rate) remains stagnant (seasonal
variations only);
Main explanation for this, the
buffer role still played by
agriculture apart: modest job
generation due to substitution of
labor by capital throughout
growth years between 2000 and
2008;
Consequently – All movements
took place inside a RESTRICTED
POOL OF ACTIVE LABOUR,
something which also explains
the low recourse to temporary
work;

6. Determined and Non-determined,
Does it really matter?
Non-determined duration contract Determined duration contract
(“permanent worker” status) (“temporary worker” status)
∗ No time-limit for the labor contract; covered ∗ Maximum time limit 36 months; No more
by the collective labor agreement; than 3 successive contracts with the same
∗ No restriction in terms of activities to be employer!
performed in the enterprise, except for the ∗ Activities have to be clearly specified
ones resulting from own status; (limitations-though rather loose, incl. in the
∗ Dismissal/Redundancy according to Labor Code);
provisions of the Labor Code ∗ Dismissal/Redundancy may only occur in
(dismissal/redundancy may occur at any cases of gross non-performance; Cessation
time, legal requirements observed); of activity before the contractually agreed
∗ Collective dismissal/redundancy according to termination date: difficult!
provisions of labor law and collective labor ∗ Collective dismissal rules for permanent
agreement; workers apply; Temporary workers covered
equally by collective labor agreements;

7. Statistics at a Glance
Employees on Temporary contracts
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
EU 27 average 12,2 12,4 12,4 12,6 13,2 14,0 14,5 14,6 14,1 13,6 13,9
POLAND 5,6 11,9 15,4 18,9 22,5 25,6 27,3 28,2 26,9 26,4 27,2
ROMANIA 2,9 3,0 0,9 2,1 2,8 2,4 1,8 1,6 1,3 1,0 1,1

8. An antechamber of
Permanent work? Transition of workers to permanent
status (EUROSTAT data) 2006 2007 2008 2009
Share of workers on determined duration
contracts very low in RO; Only a fraction
of EU-27 average;
Explanation rests with the practical lack of
differentiation between the two EU 27 average : 17,5 17,2 17,9
categories of workers;
Little distinction with regard to
contractual terms is made by RO law;
Generally regarded as an ante-chamber of
POLAND 33,8 29,7 33,3 33,1
permanent contract, a sort of a trial
period for the employee;
The fact that tasks for temporary
(determined duration) workers have to be
clearly specified also places a restriction
on their hiring; ROMANIA : : 28,8 31,9
In practical terms, IT IS FAR MUCH EASIER
to fire a non-determined duration worker
than a determined-duration one!

9. Looking towards the future
∗ It is clear that a major change has to occur in the terms of the RO
labor law;
∗ Temporary contracts have to be given EQUAL STATUS and thus
regarded as also the RULE and not as mere EXCEPTION!
∗ Rules for the use of the temporary workers have to be relaxed
so as to enable their use in practical all activities according to the
needs of the firm;
∗ The limit on the number of temporary contracts has to be
relaxed, or alternatively, the number of temporary contracts to
be concluded inside a given time-frame (deemed as statutory)
made un-limited!

10. A tentative End Note
∗ Recourse to temporary work has been, to date, limited on the
RO labor market;
∗ Likely causes: lack of sufficient job generation & legal limitations,
only recently relaxed and to a insufficient degree;
∗ Future may however favor this type of contract as a scarred
economy finds hard to recover from crisis;
∗ Temporary contracts may prove a solution if some of the
remaining restrictions are lifted, while in the meantime some
reasonable degree of protection for temporary employees is
maintained (implicit clauses that limit possibilities for abusive
dismissal before contract termination);