Employment Due Diligence in Romania: A Buyer’s Legal Checklist
Employment law • M&A • Romania
Employment due diligence in Romania helps a buyer understand the people, contracts, payroll obligations and workforce risks it may inherit with a target company. The review should connect employment documents with the transaction structure, valuation, warranties, indemnities and post-closing integration plan.
The scope and consequences of employment due diligence differ significantly between share acquisitions and asset transactions. In a share acquisition, the employing company normally remains the same legal entity, while an asset or business transfer may require a separate analysis of whether employees and employment-related rights transfer with the relevant undertaking.
What is employment due diligence in a Romanian transaction?
Employment due diligence is a transaction-focused review of the target’s workforce and employment liabilities. It is not the same as a general HR audit. The buyer needs to know which risks affect price, continuity, retention, integration and the contractual protection package.
The scope may include employees, directors, consultants, independent contractors, temporary workers, secondees, expatriates and other individuals providing services to the target. The legal analysis typically depends on the actual working relationship and not solely on the contractual label used by the parties.
Romanian employment due diligence is primarily assessed under Law No. 53/2003, the Romanian Labour Code, together with the special legislation applicable to matters such as transfers of undertakings, collective relations, occupational health and safety, employee data and the employment of foreign nationals.
This guide is distinct from general Romanian employment law advice, disciplinary dismissal guidance and the separate review of employees versus independent contractors. Its focus is the buyer’s decision before, during and after an acquisition.
Buyer’s Review Map
Interactive review map
Select an employment area
Click or tap a card to see the first documents and questions to request.
Request a headcount by entity, role, location and employment status. Identify employees, directors, contractors, temporary workers, secondees and key individuals whose departure could affect the business.
Review employment agreements, amendments, salary records, bonuses, benefits, equity, working time and internal policies. Compare the written terms with payroll and actual practice.
Review dismissals, disciplinary files, grievances, litigation, protected categories and settlement arrangements. Check whether the target can evidence a lawful process and accurate final payments.
Plan changes to reporting lines, policies, benefits, payroll, remote work, data access and management roles. The plan should distinguish what can change after closing from rights that require consultation or consent.
Employment Due Diligence Risk Scanner
Interactive risk screen
Select the signals that apply
This is a preliminary review signal, not an automated legal opinion. Select the statements that describe the target. The result helps identify where the data room needs deeper review.
What does Romanian employment due diligence examine?
The central test is whether the target’s written documents, payroll records and actual employment practice tell the same story. A signed contract may not reveal unpaid overtime, informal benefits, misclassification, inconsistent termination practice or undocumented management arrangements.
The buyer should identify the employing entity, workplace, reporting line and practical role for each material category of worker. It should then compare that information with employment contracts, amendments, payroll, internal policies, time records, leave records and communications where relevant. Gaps are not necessarily breaches, but they are signals that require explanation and proportionate follow-up.
The review should also distinguish liabilities that remain with the seller from risks that will affect the buyer after completion. This is especially important where the buyer intends to reorganise the workforce, harmonise benefits, move employees between group entities or change managers shortly after closing.
Share deals, asset deals and transfers of undertakings
In a share acquisition, the target company remains the employer and its employment contracts generally continue within the same legal entity. The buyer nevertheless needs to review change-of-control provisions, transaction bonuses, retention arrangements, employee communications and any post-closing measures that could require consultation, consent or amendments.
In asset transactions or business transfers, buyers should assess whether Articles 173–174 of the Romanian Labour Code and Law No. 67/2006 on safeguarding employees’ rights in transfers of undertakings apply to the transfer of an undertaking, unit or part of one. Where the legal requirements for a transfer of undertaking are met, employment contracts and related rights and obligations may transfer automatically to the transferee together with the relevant business unit. Information and, where measures affecting employees are envisaged, consultation obligations may also arise.
Not every asset purchase constitutes a transfer of undertaking. The analysis is fact-specific and should examine the business activity, assets, workforce, organisation and continuity of the relevant economic unit. The transaction timetable should allow the parties to identify the affected employees, collective rights, accrued liabilities and mandatory information or consultation steps before completion.
Employment contracts and actual working practice
Romanian employment contracts should be reviewed for role, place of work, working time, salary, benefits, probation, confidentiality, intellectual property, mobility and termination-related terms. The review should not stop at the template. Amendments, side letters, emails, payroll records and established practice may create additional obligations or evidence.
For contractors and consultants, the buyer should test the factual relationship. Control, integration, exclusivity, personal performance, economic dependence and the way work is organised may matter more than the title of the agreement. Romanian tax authorities, labour inspectors and courts may examine the factual circumstances of the relationship irrespective of contractual labels. A contractor issue may create employment, tax and social-security exposure and should be assessed with the relevant accounting and tax workstreams.
Payroll, benefits and hidden employment liabilities
Payroll due diligence should reconcile employment terms with salary payments, bonuses, commissions, overtime, holiday pay, sick leave, meal or mobility benefits, expense policies and any retention or equity arrangements. The question is not only whether a payment was made, but whether the target has recorded and treated the payment consistently.
Potential liabilities may arise from unpaid entitlements, informal benefits, inaccurate working-time records, delayed payments, incorrect deductions or practices applied differently to comparable employees. The buyer should request explanations for material inconsistencies and determine whether they require quantification, remediation or a specific transaction protection.
Key employees deserve separate attention. A transaction may affect retention, reporting lines, incentives, confidentiality, non-compete obligations, intellectual-property arrangements and the continuity of client or technical relationships. The SPA and integration plan should identify which people are material to the investment case and what can realistically be done to retain them.
Where restrictive covenants are material to the investment, the buyer should verify their scope, enforceability, duration and, where applicable, compliance with the requirements governing post-termination non-compete obligations under Romanian law.
In technology-focused transactions, the buyer should verify the allocation of intellectual-property rights created by employees, contractors and management personnel. Employment contracts, contractor agreements, confidentiality undertakings and IP assignment documents should be reviewed together with the factual development process and the rights required to operate or commercialise the target’s products.
Dismissals, claims and protected employees
Termination risk should be reviewed through the underlying facts and procedure, not only through the existence of a signed dismissal decision. Request information on disciplinary investigations, performance procedures, redundancies, settlement arrangements, grievances, threatened claims, court files, labour-inspection requests and communications with employees or representatives.
The buyer should identify whether a claim may affect more than the individual claimant. A repeated payroll practice, a group-wide working-time issue or a pattern of termination decisions may create a wider exposure than the disclosed dispute suggests. Protected categories, leave-related rights and employee representation may also affect the timing and defensibility of a proposed post-closing change.
The review should cover collective labour agreements, collective-bargaining procedures, trade unions and employee representatives, including compliance with applicable information and consultation obligations. The target’s arrangements should be checked against Law No. 367/2022 on social dialogue, as subsequently amended, and against any sectoral or company-level collective terms that may apply.
Occupational health and safety and ITM history
Employment due diligence should also review occupational health and safety compliance under Law No. 319/2006. The data room should address work accidents, occupational diseases, mandatory training records, risk assessments, prevention measures and the organisation of occupational-health and safety responsibilities.
The buyer should request details of Labour Inspectorate (ITM) inspections, findings, sanctions and pending compliance measures. A recurring failure, incomplete risk assessment or serious accident may require specialist investigation, quantified remediation and specific transaction protection rather than reliance on a general employment warranty.
Data protection, monitoring and employee information
Employment due diligence often involves personal data about employees, candidates, managers and claimants. The buyer should establish what information is requested, who can access it, how it is shared in the data room and whether the target has a lawful and documented process for the disclosure.
The substantive review may include employee monitoring, access logs, CCTV, productivity tools, recruitment platforms, health information, international transfers, retention and security. Sensitive information should be minimised and appropriately protected. During preliminary stages, the parties should minimise employee-identifying information and consider anonymisation, aggregation, redaction or controlled clean-room procedures where appropriate. The transaction team should coordinate the employment review with the GDPR workstream rather than copy entire personnel files into a data room by default.
Where employee monitoring through electronic communications, access logs, productivity tools or video surveillance is involved, the review should assess compliance with the GDPR and Article 5 of Law No. 190/2018. Relevant issues may include necessity and proportionality, transparency, prior consultation with employee representatives, retention periods and whether a data-protection impact assessment is required.
Non-EU personnel, work authorisations and residence rights
For non-EU personnel, the review should assess compliance with Emergency Ordinance No. 32/2026 on access of foreign nationals to the Romanian labour market and Emergency Ordinance No. 194/2002 on the status of foreign nationals. Depending on the workforce and the applicable regime, the review may cover the employer’s registration or authorisation position, employment authorisations, residence rights, changes of employer or role, secondments and applicable reporting obligations.
What should the buyer request?
Interactive document checklist
Select a review area
Click or tap a numbered card to see the documents and checks relevant to that workstream.
Obtain headcount, roles, locations, employment status, start dates, salary bands and key-person information.
Review contracts, amendments, job descriptions, internal regulations and applicable collective arrangements.
Request employer and employee extracts from the General Register of Employees, formerly managed through Revisal, together with supporting employment documentation. Verify consistency between registered employment data, individual employment agreements, amendments and payroll records.
Compare payroll, bonuses, benefits, expenses, equity or retention arrangements with the contractual documents.
Test time records, overtime, rest periods, annual leave, sick leave and any recurring payment practice.
Request dismissal files, settlement agreements, grievances, court matters, ITM inspections and threatened claims.
Review collective labour agreements, bargaining procedures, trade-union matters, employee representatives and information or consultation records.
Review risk assessments, mandatory training, work accidents, occupational diseases and ITM findings or remediation measures.
Identify individuals who may create reclassification, tax, social-security or employment-law exposure.
Review employee-data processing, monitoring, access controls, retention and the documentation required by the GDPR and Law No. 190/2018.
Check the employer’s status, employment authorisations, residence rights, secondments and reporting obligations affecting non-EU personnel under the legislation applicable at the review date.
Employment risks and SPA protection
Select a row to highlight the transaction takeaway.
| Review area | What the buyer checks | Possible transaction response |
|---|---|---|
| Who works for the target and whether the contractual labels match the factual relationship. | Workforce warranty, remediation plan or specific protection for classification exposure. | |
| Whether an asset or business transfer meets Articles 173–174 of the Labour Code and Law No. 67/2006, and which employees, rights and consultation steps are affected. | Transfer plan, employee information or consultation process, liability allocation and closing timetable. | |
| Salary, bonus, benefits, equity, expenses, payroll practice and unpaid entitlements. | Disclosure, price adjustment, warranty or indemnity for quantified liabilities. | |
| Terminations, disciplinary processes, protected employees, claims and authority investigations. | Specific indemnity, closing condition, litigation reserve or post-closing conduct protocol. | |
| Collective bargaining, employee representatives, trade unions, risk assessments, work accidents and ITM history. | Specialist review, remediation covenant, specific warranty or indemnity for identified exposure. | |
| Retention, management continuity, confidentiality, non-compete and ownership of employee or contractor-created IP. | Retention arrangements, IP confirmations, transition covenant or targeted warranty. | |
| Employee-data processing, monitoring, access, transfers, retention, security and compliance with the GDPR and Law No. 190/2018. | Privacy remediation, updated notices, DPIA assessment or integration workstream. | |
| Employer status, employment authorisations, residence rights, secondments and cross-border assignments under the current immigration framework. | Condition precedent, authorisation or renewal plan, warranty or continuity arrangement. |
Due Diligence Timeline
Transaction sequence
What should happen at each stage?
Agree the scope, confidentiality controls, data-room categories and responsible contacts. Prioritise risks that could affect valuation, continuity or the timetable.
Compare contracts, payroll, policies, records and claims. Ask where documents conflict with operational practice and identify missing evidence.
Translate material findings into warranties, disclosure, indemnities, conditions precedent, price mechanisms or post-closing covenants.
Assign owners for payroll, policies, data protection, key-person retention, permits, employee communications and any agreed remediation.
Bottom line for the buyer
Employment due diligence should end with a decision, not a document pile. For each material issue, the buyer should know the factual position, likely exposure, responsible owner, timing and contractual or operational response.
A practical report may classify findings as matters to accept, investigate, remediate before closing, disclose, protect through the SPA or manage through post-closing integration. That structure allows the buyer to negotiate from evidence and prevents employment risks from disappearing inside a generic compliance warranty.
Employment Due Diligence in Practice
Anonymised client matter. The following summary describes the type of employment due-diligence issues addressed in a transaction handled by Atrium Romanian Lawyers. Certain details have been anonymised and simplified to protect client confidentiality.
Employment review for the acquisition of a Romanian technology and business-services company
A foreign investor considered the acquisition of a Romanian technology and business-services company with a workforce operating across multiple locations. As part of the transaction, the buyer requested a workforce inventory, employment agreements, payroll records, contractor documentation, internal policies and information relating to ongoing employment disputes.
The review identified several matters requiring further analysis. Workforce records were not fully consolidated, certain contractors performed functions comparable to those carried out by employees, and some compensation practices appeared in payroll data without being consistently reflected in the underlying contractual documentation. The review also identified retention considerations affecting key personnel involved in the operational continuity of the business.
Issues identified
Workforce records, contractor classification, compensation documentation and key-person retention.
Atrium’s role
Document review, employment-risk assessment and coordination with the wider transaction team.
Transaction response
Targeted disclosures, contractual protection, document remediation and post-closing integration measures.
Atrium Romanian Lawyers coordinated the employment due-diligence workstream, reviewed the available documentation and prepared a risk-based assessment of the identified matters. Our team worked with the wider transaction team to prioritise the findings according to their potential legal, financial and operational impact.
The findings were translated into practical transaction recommendations, including targeted disclosures, specific contractual protections, pre-closing document remediation and post-closing integration measures.
The transaction documentation was updated to address the employment matters identified during the review. A structured plan was also prepared for addressing priority employment issues following completion.
This matter has been anonymised and simplified for publication. The appropriate legal analysis and transaction protections depend on the specific facts, documents, transaction structure and commercial objectives of each matter.
How Atrium Romanian Lawyers can assist
Atrium Romanian Lawyers can coordinate an employment due-diligence workstream for a Romanian acquisition, investment or corporate reorganisation. The review can cover workforce structure, contracts, payroll, working time, terminations, disputes, contractors, GDPR, permits, key employees and the translation of findings into transaction documents.
Frequently asked questions
Is employment due diligence necessary for every acquisition?
The scope should be proportionate to the target’s workforce, sector, transaction structure and known risk. A business with a large workforce, regulated operations, key employees or employment claims usually requires a deeper review.
What is the most common employment due-diligence gap?
A common gap is the absence of a reliable workforce inventory connecting contracts, payroll, working practice, disputes and employee data. Without that map, the buyer may not understand the liability it is assuming.
Can employment risks be addressed after closing?
Sometimes. The parties may agree a post-closing remediation plan, but urgent claims, missing permits, unlawful practices or risks affecting continuity may require action before closing or a specific contractual protection.
Should contractors be included in the review?
Yes. The factual relationship should be assessed where contractors perform work that resembles employment. The consequences may include reclassification, tax, social-security, employment and benefit exposure.
Does GDPR form part of employment due diligence?
Yes. The review should address employee and candidate data, particularly where monitoring, CCTV, HR software, health information or international transfers are involved. It should assess the GDPR and, where electronic or video monitoring is used, Article 5 of Law No. 190/2018, including necessity, proportionality, transparency, consultation, retention and any requirement for a DPIA.
What does the buyer receive at the end of the review?
The output may include a risk matrix, missing-document list, priority actions and drafting recommendations for warranties, indemnities, disclosure, conditions or post-closing measures.
