In Romania "3.4 millions people work in informal sector"

Approximately one million persons out of the 3.4 millions who work in the informal sector or who operate partly in the informal sector in Romania do not know that they have an employment contract, for which the social contributions are not being paid.

A study carried out by the National Union Bloc reveals the fact that contract holders think that they have indefinite term employment contracts, but they cannot prove it.

Furthermore, three out of four such employees expect to have health and pension insurances. In reality, however, they cannot benefit from the social security services as long as they do not work in the formal sector.

The conclusion drawn by the specialists who have carried out the study is that a firm intervention from the part of the control institutions would lead to a 75 percent rate of employment, the value established by the Europe 2020 strategy and assumed by Romania.

The same study reveals that the probability of youngsters aged 15 to 24 and of adults aged over 55 to work in the informal sector is almost double than in the case of middle-aged persons.

Romania is heading "in the wrong direction"

"Romania is heading in the wrong direction, with 3.4 millions of people working in the informal sector, fact which leads to a loss of 6 percent of the GDP annually", President of the National Union Bloc, Dumitru Costin, stated on Tuesday.

The solutions brought forth by the trade unions in order to fight against the labour in the informal sector are aimed at increasing the minimum wage and at reducing the contribution to social insurances.

Trade unions claim that it is also necessary to introduce a modern system of labour market administration and to finalize a software programme meant to view the investments carried out in Romania.

The variants of the trade unions are comprised in a document which will be presented to the decisive factors.

"The document will be on the table of the Prime Minister, on the table of the Minister of Labour, on the one of the Minister of Public Finances and on the one of the President, and we believe that it is normal and natural to carry out an urgent discussion with those who have the power of decision in this country, so that we can establish together – the Government, the employer organizations and the trade unions – a list of priorities for Romania"s labour market."

"We must evaluate together the need for financing that the labour market in Romania has, with concrete measures meant to lead to a significant decrease of the percentage of those who operate in the informal sector, in order to diminish the degree of vulnerability and poverty of the individuals and of the citizens, and, last but not least, in order to rebalance the budget", Dumitru Costin stated.

"Artificial" growth "in the number of collective contracts"

As far as the statement of Prime Minister Emil Boc regarding the growth in the number of collective employment contracts is concerned, Dumitru Costin has stated that they were not new contracts, but re-registered ones.

"The Prime Minister is talking about the registration of a number of 600 000 contracts after 1 May. I have tried to explain that we are dealing with an accumulation of factors. It is for the first time when, aside from labour inspectors, the National Agency for Fiscal Administration, the Financial Guard and the Police have also participated in integrated control activities. Therefore, it was a multi-disciplinary control and no ways out for the employers were left."

"This gesture, this control activity and the moment when the new Labour Code has entered into effect have coincided with the summer tourism season and we must not forget that some of the existing provisions of the present Labour Code have obliged employers to modify the employment contracts in effect and to re-register them. Therefore, the majority of these contracts are the result of re-registration", Dumitru Costin stated.

The conclusions of the inquiry carried out by the National Union Bloc reveal the fact that the labour market will be flooded by a new wave of extremely vulnerable youngsters, who lack solid education and who will need urgent counselling and qualification.


Translated by: Mădălina Borcău
MA Student, MTTLC, Bucharest University