In Romania, when an employee leaves the company as part of an agreed exit arrangement, the legal mechanism is usually the termination of the individual employment contract by mutual agreement.
This is not a resignation and it is not a dismissal. It is a separate form of employment termination, based on the consent of both the employer and the employee, under Article 55 letter b) of the Romanian Labour Code.
In practice, mutual termination is often used during company reorganisations or restructuring processes, including situations where redundancies may otherwise follow. The employer may propose an agreed termination before or during a restructuring process, but the employee is not required to accept it.
For the agreement to be valid, both parties must give clear, serious and freely expressed consent. The mere fact that the employer refers to an upcoming restructuring does not automatically mean that the employee was unlawfully pressured. However, the restructuring should be genuine and relevant to the employee’s position.
If the employer invokes a restructuring that does not actually exist, or that does not concern the employee’s role, the employee may challenge the termination agreement on the grounds that its consent was affected.
A mutual termination agreement should be made in writing and should clearly state the termination date, the financial terms and any other obligations of the parties. This is especially important where the employer offers a severance package or separation payment.
The severance package should be clearly distinguished from amounts already owed to the employee, such as salary, bonuses, allowances, compensation for unused annual leave or other contractual and legal rights. These amounts should not be treated as part of the discretionary severance payment unless this is expressly and lawfully agreed.
One important consequence for employees is that termination by mutual agreement does not usually give access to unemployment benefits in Romania. This makes the financial terms of the agreement particularly important.
The agreement may also include a no-further-claims clause. However, such a clause should be drafted carefully. It cannot validly remove rights granted to the employee by law.
Used properly, mutual termination can be a practical way to manage employment exits during business restructuring in Romania. However, it requires careful drafting, transparent communication and a clear distinction between an agreed exit, a resignation and a dismissal.