Introduction
The abolition of a position is a drastic measure by which an employer eliminates a role from its organizational structure for economic, technological, or efficiency-related reasons. It represents a form of strategic restructuring, driven by the need to adapt and optimize costs, and should be accompanied by professional transition policies for affected employees, in line with ethical human resource management.[1]
From a legal perspective, under Romanian law, pursuant to Articles 65-68 of the Labour Code,[2] dismissal for reasons not related to the employee is lawful only if the following conditions are cumulatively fulfilled:
(a) effectiveness (the position is removed from the organisational chart and is not subsequently reoccupied);
(b) real and serious cause (the reasons are objective and verifiable);
(c) compliance with the legal procedure (the measure is preceded by notice and communicated through a document reflecting the precise reasons behind the decision, in accordance with the formal requirements of the labour legislation applicable).[3]
These requirements are also consistent with the principles established by ILO Convention No. 158/1982, which mandates the existence of a “valid reason” for termination of employment.[4] In this context, Civil Decision No. 963/21.11.2023 of the Iași Court of Appeal constitutes a significant jurisprudential landmark, illustrating the necessary balance between the employer’s managerial prerogative to reorganize its activity and the employee’s right to protection against abusive measures.
Although the present analysis is mainly grounded in Romanian labour law, the legal issues it raises are not confined to the national context. Dismissal for reasons not attributable to the employee, particularly in the form of job abolition due to economic or organisational restructuring, is regulated in broadly similar terms across European jurisdictions. While the European Union (EU) has not fully harmonised individual dismissal law, a significant degree of convergence has emerged through a combination of international standards, EU secondary legislation on collective dismissals, and national doctrinal developments. In particular, the requirement that termination be based on a valid, objective reason, reflected in ILO Convention No. 158, is widely embedded in the legal systems of EU Member States. Moreover, comparative labour law reveals that a dismissal in such a situation is lawful only where the position is genuinely abolished and the restructuring is not simulated in order to hide a dismissal on other grounds which would be unfair or even illegal. Consequently, the Romanian case analysed in this article reflects a broader European paradigm, making its implications relevant beyond the domestic legal order chosen as an example.
Presentation of the chosen case
The appellant, employed as an economist at the Road and Bridge Construction Company (SLDP) S.A. Bârlad, was dismissed by Decision No. 174/22.12.2022, based on Article 65(1) and (2) of the Romanian Labour Code. The employer justified the measure by invoking a “reorganisation of activity” aimed at reducing expenses during the period November 2022 – March 2023, given that activity in the road and bridge construction sector decreases during winter.
In reality, however, the measures adopted were permanent, despite being justified by a temporary situation. Moreover, they were implemented without a concrete economic plan and without approval from the competent authority (the Local Council, as the sole shareholder of this company).
Furthermore, shortly after the dismissal (in February 2023, while the alleged restriction period was still ongoing), the company hired an accountant for a position similar to the one abolished. This circumstance reinforced the suspicion of a simulated reorganisation.
The Vaslui Court of First Instance upheld the claim, finding that “the measure adopted by the respondent was abusive, being motivated by reasons unrelated to the abolition of the position and the employer’s economic needs”. The Iași Court of Appeal dismissed the employer’s appeal, pursuant to Article 480(1) of the Romanian Code of Civil Procedure, confirming that the abolition of the position was neither real nor effective.
Legal analysis
The applicable legal framework, as provided by Article 65 of the Romanian Labour Code, requires that the abolition of a position be effective, real, and serious. Judicial review is limited to assessing the legality and merits of the measure.
In the present case, the Court concluded that the employer exceeded these limits, as the reorganisation had been approved by an incompetent body and the abolished position was subsequently re-established under a different name. These elements demonstrated the absence of a genuine economic cause and justified the annulment of the dismissal decision.
A relevant comparative solution is offered by the Bacău Court of Appeal (Decision No. 453/2024), which held that courts cannot require employers to justify their economic strategy in detail, but must verify the existence of an objective need for reorganisation. Thus, while the opportunity of restructuring belongs exclusively to the employer, the reality and seriousness of the measure remain subject to judicial scrutiny.
Legal doctrine on the matter further clarifies that effective abolition entails the actual elimination of the position from the organisational chart and the absence of its subsequent reoccupation. The rapid re-establishment of a similar position undermines the initial justification. Temporary situations require temporary measures.[5]
From a comparative perspective, both continental and Anglo-Saxon legal systems promote a similar standard of balance. The concept of “genuine redundancy” in British law and the French notion of “cause réelle et sérieuse” express the same idea: dismissal is legitimate only if the position is genuinely abolished and the reasons are objective.[6]
In doctrinal terms, it has been argued that European systems are converging towards the “flexicurity” model, which combines managerial flexibility with employee security.[7] Socio-economic research has also highlighted the significant social costs associated with dismissals, emphasizing the importance of prevention, retraining, and reintegration mechanisms.[8]
Notice Period as a Procedural Guarantee
Another important aspect highlighted by Decision No. 963/2023 concerns the right to notice, an essential element of dismissal procedures for reasons not attributable to the employee.
Article 75 of the Romanian Labour Code establishes the notice period as a procedural guarantee of the employee’s right of defence. In this case, the Court found that the employer fully complied with this obligation, even extending the notice period to account for the suspension of the employment contract due to temporary incapacity for work.
A notice of 20 working days (in the case at hand, 07.10.2022 – 03.11.2022) was granted, suspended during sick leave, and subsequently resumed until 30.12.2022. Notice is, therefore, an imperative right, but one susceptible to suspension when the employment contract itself is suspended.[9]
By contrast, in a recent decision of the Alba Iulia Court of Appeal,[10] the dismissal was annulled due to the employer’s failure to observe the full notice period, despite formally indicating its granting. The Court reiterated that non-compliance with the notice period entails absolute nullity, regardless of the validity of the economic reasons invoked.
These decisions illustrate the dual level of employee protection under labour law: substantive protection (verification of a real and serious cause); and procedural protection (compliance with notice, competence, and formal requirements).[11]
The solution of the Iași Court of Appeal is both fair and well-balanced. It does not unduly restrict the employer’s managerial freedom, but rather safeguards the principles of legality and good faith,[12] ensuring the proper application of legal provisions governing dismissal for reasons not attributable to the employee.
In this case, the reorganisation was clearly simulated, constituting a typical example of abuse of rights by the employer. It is also important to consider the Romanian socio-economic context of 2023, marked by a post-pandemic economic transition, during which labour disputes of this nature became increasingly frequent.
Such decisions are necessary to sanction conduct that exceeds the limits of employer discretion and to reaffirm the social function of labour law. Moreover, the judgment underscores the importance of transparency in decision-making and respect for internal prerogatives, particularly within companies whose majority shareholder is a local public authority.
Comparative Case: Civil Decision No. 25/2025, Bacău Court of Appeal
A complementary perspective is offered by Civil Decision No. 25/2025 of the Bacău Court of Appeal, which upheld the legality of a dismissal under Article 65 of the Romanian Labour Code. In this case, the plaintiff, employed as a driver within a local administrative authority, was dismissed on grounds of cost reduction and organisational restructuring. Unlike the case from Bârlad, the Court found that the abolition of the position was:
- lawful, as it was adopted by the competent authority (the Local Council);
- effective, as the position was removed from the organisational chart and not subsequently reoccupied;
- real and serious, as it pursued a legitimate economic purpose without evidence of abuse.
The Court reaffirmed that judges cannot review the economic opportunity of reorganisation from a business perspective, but only its legality and the existence of a real and serious cause, in line with the Romanian Constitutional Court Decision No. 420/2013.[13]
This decision of the Bacău Court of Appeal illustrates the opposite factual situation to that in the case decided by the Iași Court of Appeal: a genuine, lawful reorganisation rather than a simulated one. It also confirms a consistent jurisprudential line of Romanian courts (Galați Court of Appeal,[14] București Court of Appeal[15] etc.) according to which an employee’s mere dissatisfaction with the business restructuring cannot justify the annulment of dismissal on its own. Ergo, this decision of the Bacău Court of Appeal sheds some light also on a careful balance between the fundamental right to work (Article 41 of the Romanian Constitution) and the public authority’s prerogative to ensure the efficient organisation of public services for the benefit of citizens (Articles 120-121 of the Romanian Constitution).[16]
Conclusions
The main conclusions that can be drawn are:
- the abolition of a position must be real, serious, and effective;
- temporary or purely formal reorganisations cannot justify dismissal;
- courts may verify the objective nature of the measure, without substituting the employer’s economic judgment;
- the burden of proof lies with the employer.[17]
The decision selected as a case study is of significant practical relevance in the current European economic context,[18] characterised by rapid restructuring and efficiency pressures across multiple sectors. It consolidates a standard of legal protection aligned with European approaches to dismissal law, where a “valid reason” remains a fundamental requirement for termination based on reasons not attributable to the employee.
[1] I. Borghouts-van de Pas, C. N. J. de Vries and E. Knies, ‘Unemployment Prevention: The Role of Human Resource Management in Job-to-Job Transitions’ (2021) European Journal of Training and Development 576.
[2] Romanian Labour Code, Law no. 53/2003, republished.
[3] Ioana Mardare, „Concedierea ca urmare a desființării postului” (2024), Juridice.ro – in Romanian.
[4] International Labour Organization, Convention No 158 on Termination of Employment at the Initiative of the Employer (adopted 22 June 1982).
[5] Alexandru Țiclea, Tratat de dreptul muncii (Universul Juridic, 2023) – in Romanian.
[6] Kylie Davis, ‘A Critical Analysis of “Genuine Redundancy” Cases’ (2014) Australian National University Law Review.
[7] John Hirsch, ‘A Comparative Perspective on Unjust Dismissal Laws’ (2012) SSRN.
[8] Hugh Collins, Justice in Dismissal: The Law of Termination of Employment (Oxford University Press, 1992).
[9] Luminița Dima, Dreptul muncii (C.H. Beck, 2017) – in Romanian.
[10] Alba Iulia Court of Appeal, Civil Decision No 4226/19.12.2024.
[11] Al. Athanasiu, A.-M. Vlăsceanu, Dreptul muncii (C.H. Beck, 2017) – in Romanian.
[12] Craiova Court of Appeal, Decision No 2885/04.10.2021 (ECLI: RO:CACRV:2021:155).
[13] Romanian Constitutional Court, Decision No 420/2013:“A judicial court does not examine the opportunity of the employer’s internal restructuring decision, nor does it censor the measures adopted for this purpose; rather, within its competence, a court of law conducts a legality review to ensure that the measure corresponds to a genuine, real, serious, and objective need of the undertaking and that it does not conceal an abusive dismissal.” (officially in Romanian only).
[14] Galați Court of Appeal, Labour and Social Security Law Division, Decision No 425/2019 from the case no. 2644/121/2018: “The appellant’s arguments that the first-instance court prioritised the interests of the company cannot be upheld, as they represent mere assertions not supported by concrete evidence.”
[15] Bucharest Court of Appeal, Labour and Social Security Division (7th), Decision No 3723/2011: “The decision to abolish the employee’s position, preceding the dismissal, does not in itself constitute a dismissal decision and is subject to judicial review only incidentally, as a preparatory act to the issuance of the individual dismissal decision.”
[16] Romanian Constitution (adopted 1991, revised 2003), articles 41, 120-121.
[17] Article 272 of the Romanian Labour Code (n 2).
[18] For example: https://www.wall-street.ro/articol/fara-categorie/concedieri-in-it-cati-angajati-si-ce-business-uri-au-gigantii-tech-in-romania.html (‘IT Layoffs in Romania: How Many Employees and What Business Do Tech Giants Have in Romania?’) și https://romania.europalibera.org/a/reforma-administratiei-primarii-consilii-judetene-reduceri-personal-guvernul-romaniei-posturi-ocupate/33521547.html (‘Administrative Reform in Romania: Staff Reductions in Local Authorities’).
