New Amendments to the Labour Code

In brief

The Parliament of the Republic of Moldova has approved several amendments to the Labour Code, aimed at modernising labour relations. The major amendments pertain to the provision regarding the internal regulations of enterprise, informing employees, signing fixed-term employment agreements with employees in the information technology and telecommunications sector, suspension of the individual employment contract, dismissal, employee transfer, recording the hours worked, scheduling of annual leave, leave allowance, guarantees in the event of company reorganisation, and appraisal of the individual employee performance.

In detail

Internal Corporate Regulations

Replacement of the words "internal corporate regulations” with "internal corporate regulations, if developed and approved by the employer"

The words "internal corporate regulations" have been replaced with "internal corporate regulations, if developed and approved by the employer", in several articles of the Labour Code.

These changes apply to Article 9(2)(c), Article 45, Article 48(2), Article 53(1), Article 60(4), Article 801(5), Article 86(1)(e), Article 95(1), Article 98(2) and (4), Article 99(2), Article 102(3), Article 107(2), Article 109(2), Article 114(1)(e), Article 201, Article 203(2), and Article 2922(2).

Modifications to Chapter I - Internal Regulations

In accordance with the new Article 198, paragraph (1), the internal regulations of an enterprise have become an optional legal document which, at the employer's discretion, can be developed for the company, in consultation with employee representatives, and is approved by the employer through an order (directive, decision, resolution).

Article 199, paragraph (1), will have a different introduction: "If the employer develops and approves the internal corporate regulations, under Article 198, they should contain the following provisions."

The words "internal corporate regulations of the enterprise" are replaced with the words "individual employee performance appraisal regulations" in Article 2112, paragraph (2), and in Article 2114.

Individual Employment Agreement

Definition

Effective from 2 July 2023, the Labour Code includes a redefined concept of individual employment contract. The revised Labour Code now defines the individual employment contract as an agreement between an employee and an employer.

Under this contractual arrangement, the employee commits to providing services in a specific field, with a certain set of skills or in a particular position, while also adhering to any internal rules established within the company and approved by the employer.

In return, the employer commits to providing the employee with the working conditions stipulated by the Labour Code, along with other legal labour standards defined in various laws and collective employment agreements. Additionally, the employer is required to provide timely and full compensation in line with the legal and contractual provisions.

Fixed-term Individual Employment Contract

The option to sign fixed-term individual employment contracts with employees in the field of information technology and telecommunications is now allowed, in accordance with Article 55(1) (m1) of the Labour Code.

Informing Employees

Article 421, paragraph (6) of the Labour Code introduces a regulation stating how employees should be informed. The employer is required to communicate certain information items to employees using the following means:

1.  public announcement via email or other means of communication that can be accessed by each employee; and/or

2. public announcement posted on the company's website; and/or

3.  public announcement displayed on a notice board with general access at the company's headquarters  and each of its subsidiaries or representative offices.

This provision applies where no labour union or elected representatives of employees exist within a company. The purpose is to ensure accurate and accessible information for all employees regarding important matters related to their workplace.

Suspension of Employment Contract

The newly introduced letter a1) in Article 76 paragraph (2) of the Labour Code establishes a new legal basis for the temporary suspension of an individual employment contract. This amendment allows the employer to have the contract suspended if an employee is absent from the workplace for a continuous period of 30 days without providing the employer with an explanation for their absence.

This provision enables the employer to suspend the employment contract in cases where the employee's absence, for a maximum of 30 consecutive days, lacks valid justification. During the suspension, the employment relationship remains in force, although the employer is not required to remunerate the employee for the duration of the absence.

Dismissal

Significant amendments have been made to Article 86, paragraph (1), letter h) of the Labour Code, allowing for the dismissal of employees in cases of unjustified absence from the workplace for at least four consecutive hours during a working day. This applies in two distinct cases:

1. For employees with a daily working time of a minimum of eight hours: if the unexplained absence exceeds four consecutive hours, without taking into account the lunch break, the employer may consider dismissal.

2. For employees with a daily working time of less or more than eight hours: in this case, the unjustified absence for at least half of the daily working time may lead to the employee's dismissal.

These changes have been introduced to safeguard workplace discipline and attendance and ensure the fulfillment of contractual obligations by employees. Based on these provisions, employers can take action when employees are absent without valid reasons, thereby affecting the expected operation of the business.

Employee Transfer

Through the changes to Article 971, paragraph (4) of the Labour Code, transfers of employees in cases of part-time work, as specified in paragraph (3), are facilitated. According to these amendments, the employer is required to inform employees about full-time and part-time vacant positions within the company within five working days from the date these job vacancies become available.

For effective and transparent communication, the employer should make information about vacant positions known to employees and their representatives, company wide. This can be achieved using the following methods:

1. sending an announcement via email or another means of communication that can be accessed by each employee; and/or

2.  posting a public announcement on the company's website, if such a communication channel exists; and/or

3. displaying a public announcement on a notice board with general access, located at the company's headquarters and each of its subsidiaries or representative offices.

Records of Hours Worked

The amendments to the regulations regarding timekeeping set forth new obligations for employers in terms of recording and monitoring their employees' working hours. In accordance with the new provisions, employers have the following responsibilities:

1. Recording the hours actually worked: Employers are required to keep records of the actual hours worked by each employee, including overtime and hours worked on non-working days and public holidays. These records should accurately reflect the number of hours worked by each employee, which entails compliance with legal regulations on the maximum number of working hours and rest breaks.

2. Compliance with collective bargaining agreements or written agreements: Employers should use the timekeeping templates approved under nationwide collective bargaining agreements or adhere to written agreements entered into with employees. These templates or agreements may include specifications on the methods of recording and calculating the working hours, taking into account the particulars of the work performed by each employee.

Annual paid leave

Amendments to Article 116, paragraph (1) of the Labour Code brings significant changes to the scheduling of annual leave. The new provisions stipulate the following:

1. Scheduling annual leave for the next year: Employers are required to schedule annual leave for employees in agreement with the latter’s representatives by the end of each calendar year. This means that the employer and employee representatives should decide together the dates for annual leave for the next year, ensuring transparent planning of rest periods for all employees.

2. Repeal of paragraph (5) of the same article: According to the new regulation, scheduling annual leave is no longer a requirement for employers and employees. Therefore, the employer is no longer obligated to inform the employees in writing about the exact start date of their leave. This provision offers greater flexibility to both employers and the employee in managing holiday periods.

Leave Allowance

Modifications have been made to leave allowances, as per the new provision in Article 117, paragraph (3) of the Labour Code. According to the new text, the leave allowance should be paid by the employer at least three calendar days before the start of the leave or at a date agreed upon by the parties, but, in any case, no later than the date of salary payment for the month in which the respective leave was granted.

Guarantees in the Event of Company Reorganisation

Through the adjustment of regulations regarding guarantees in cases of company reorganisation, changes in ownership type, or change of owner, clarity and transparency have been brought to the process of informing employees. According to the new provision in Article 1971, paragraph (5) of the Labour Code, in cases where no labour union or elected representatives exist within a company, information regarding reorganisation, changes in ownership type, or change of owner should be communicated to employees using the following means:

1. notification sent via email, or another means of communication that can be accessed by each employee; and/or

2.  public announcement placed on the company's website; and/or

3. public announcement displayed on a notice board with general access at the company's headquarters and each of its subsidiaries or representative offices.

Evaluation of employee performance

Article 2114 of the Labour Code sets the procedure for evaluating the individual performance of employees. This process involves benchmarking the employees’ performance results against established individual performance indicators and assigning a performance rating.

The evaluation procedure should include at least three distinct performance ratings, in conjunction with the level of achievement of the specified individual performance indicators as defined in the performance evaluation regulations.

The "unsatisfactory" rating will be assigned to the minimum level of achievement of individual performance indicators, as outlined in the evaluation regulations.

The evaluation of individual performance will be conducted periodically, with a frequency specified in the evaluation regulations, but not more often than once every three months. The total duration of the evaluation procedure cannot exceed one month from its initiation until the results are communicated to employees.

The employees should be informed in writing of the initiation of the evaluation procedure at least five days before it begins.

The evaluation of individual performance can be conducted by the employee’s direct supervisor or by an evaluation committee specifically appointed by the employer.

During the evaluation, the employee has the right to provide explanations regarding the achievement of individual performance indicators, which contributes to the transparency and fairness of the evaluation process.

Shift work

Shift work, also known as working in two, three, or four shifts, is employed when the specific nature of the activity or the duration of processes exceeds the limit of regular daily working time. This approach allows for more efficient use of equipment and machinery, and a boost in the volume of production or services. In the case of services involving national security or internal affairs, the daily duration of shift work is established through administrative acts, while ensuring the required break periods between shifts. Adherence to the legal limits regarding the total duration of work in a day, which cannot exceed 24 hours, is mandatory.

[Source: Law No 212 of 20 July 2023 on the amendment of some normative acts, published in the Official Gazette No 297 - 301 of 10 August 2023; in force from 10 August 2023].

To takeaway

On 2 July 2023 and 10 August 2023, legislation came into force bringing important amendments to labour law.

Future legislative changes to enter into force on 1 January 2024

Rights and procedures regarding paternity leave have been modified to encourage the active involvement of fathers in the care of new-born / adopted children.

Paternity Leave Duration: Fathers of new-born or adopted children are entitled to paternity leave of up to 15 calendar days.

Flexibility in Allocating Leave: Paternity leave can be used in full or in a maximum of three fractions within the first 12 months following the birth or adoption of the child. Each fraction of leave should be at least five calendar days. To exercise this right, a request should be submitted at least five days before the start of each leave fraction, unless leave periods have been previously arranged with the employer.

Paternity Leave for Adoptive Fathers: In the case of fathers who adopt children, paternity leave is granted within the first 12 months from the date of adoption approval. To request the leave, the application should be accompanied by a copy of the court decision regarding the adoption and a copy of the child's birth certificate.

Partial Leave for Adoption: Employees who adopt a child are entitled to paid leave ranging from 60 to 90 days. Both spouses may use this leave, but it should not overlap.

Various Leave Types for Adoption or Placement: Employees who have adopted a child or taken a child in foster care or guardianship have the right to three types of leave:

1. paid leave for up to 90 days;

2. partially paid leave for caring for the child until the age of three, with a minimum duration of six months, in cases where the child was under three years old at the time of adoption or placement;

3. partially paid leave for caring for the child, for up to six months, in cases where the child was over three years old at the time of adoption or placement.

Requesting Leave: Employees who adopt a child or take a child in foster care can request one of these types of leave within 30 days.

[Source: Law No 241 of 31 July 2023 on the amendment of some normative acts, published in the Official Gazette No 318 - 321 of 18 August 2023; in force from 1 January 2024].