The employment in Bulgaria is governed mainly by the Labour Code. The latter is applicable to employment relations of Bulgarian citizens, of citizens of Member States of the EU, of the Contracting Parties to the Agreement on the European Economic Area or of the Swiss Confederation with employers in Bulgaria and with Bulgarian employers abroad, as well as to employment relations of Bulgarian citizens, of citizens of Member States of the EU, of Contracting Parties to the Agreement on the European Economic Area or of the Swiss Confederation, sent by a Bulgarian employer to work abroad in a foreign enterprise or joint venture, as well as of foreign citizens working in Bulgaria.
It should be noted that the Bulgarian Labour Code is highly restrictive.
EMPLOYMENT CONTRACT
Form
In compliance with the Labour Code the employment contract shall be concluded in writing. The written form of the contract is form ad probationem. In relation to the employment contract several legal requirements have to be observed. One of these requirements is related to compulsory notification to the National Revenue Agency by the employer, namely within three days of concluding or amending the employment contract and within seven days of its termination, the employer shall be obliged to notify thereof the respective Local Department of the NRA. Also, Bulgarian legislation stipulates specific requirements for conclusion of employment contracts with foreign citizens. Depending on their citizenship – if it is a citizen of a Member State or not, the procedure differs.
Duration
The employment contract may be concluded:
- as employment contract for an indefinite period;
- as a fixed-term employment contract.
An employment contract concluded for an indefinite period may not be transformed into a fixed-term employment contract, except where explicitly expressed in writing by the employee. On the contrary, a fixed-term employment contract may be transformed into a contract for an indefinite period if the employee continues to work for five or more working days after expiry of the agreed period without a written objection of the employer and in case the position is vacant.
DISMISSING EMPLOYEES
The employer is not entitled to dismiss an employee without a legally valid cause. The grounds for dismissal are set forth explicitly in the Labour Code and they can be divided into two groups: personal reasons (e.g. lack of qualification) and economic reasons (e.g. closing down of the enterprise, redundancy etc.).
Among the grounds for dismissal the following have to be mentioned:
- dismissal in case of change of the management – agreements concluded with management personnel can be terminated;
- termination in consideration of agreed compensation, where the amount of the compensation should not be less than four gross monthly salaries;
It has to be noticed that certain groups of employees are under special protection and for their dismissal an advance permission of the Labour Inspectorate is required. These groups are: pregnant, mothers having children at the age up to 3, trade-union leaders, disabled persons, employees in approved leave or who suffer from certain diseases.
The period of notice of termination of an employment contract is 30 days, unless the parties have agreed on a longer term, but not longer than 3 months.
In case of collective dismissals there is a specific procedure stipulated in the Employment Promotion Act. Under the latter each employer shall notify in writing the Employment Agency of any contemplated collective dismissals not later than 30 days prior to the dismissal date. In case of non-observance of the statutory procedure for collective dismissals the employers may suffer certain sanctions.
According to the legal definition of collective dismissals set forth in the Labour Code these are dismissals effected on the employer’s initiative for one or more reasons not related to the individual employee concerned, where the number of dismissals depends on the total number of employees in the enterprise. In case of merger or acquisition or in the event of transfer of the business employment contracts shall not be terminated.
Compensation in case of dismissal
In compliance with Bulgarian legislation the following compensation is due:
- compensation for terminating the employment contract without notice. In case the employer fails to keep the term of the notice – it owes compensation in the amount of the gross labour remuneration for the notice period in case of an employment contract for an indefinite period; and to the amount of the suffered damages in case of an employment contract for a fixed term;
- Compensation for remaining unemployed. Upon dismissal by reason of closure of the enterprise or part thereof, downsizing of personnel, reduction in the volume of work and idling for more than 15 working days – a compensation is paid by the employer for the period of unemployment, but not more than one month;
- Compensation for unused annual paid leave. Upon termination of the employment contract the employer owes compensation for unused annual leave. The amount of the compensation shall be determined on the basis of the daily average gross labour remuneration calculated for the previous month during which the employee had worked out effectively at least 10 working days.
Labour Disputes
Labour disputes shall be reviewed by the courts.
Labour disputes shall be actionable within the following prescription periods:
- one month: for disputes over limited financial liability of an employee, for revocation of a disciplinary sanction of reprimand;
- two months: for disputes for revocation of a disciplinary sanction of warning of dismissal, change in the place and nature of work, and termination of the employment relationship;
- three years: for all other labour disputes.
With the claim the dismissed employee is entitled to claim announcement of the dismissal as unlawful, reinstatement to his previous work and payment of compensation for the period of unemployment due to the dismissal.
In case the court rules that the dismissal is unlawful it shall adjudge compensation which is as follows:
- Upon unlawful dismissal the employee shall be entitled to claim compensation from the employer amounting to the employee’s gross labour remuneration for the period of unemployment, but not more than six months. When during the period pursuant to the preceding sentence the employee has worked on a lower paid job he shall be entitled to the difference between the remunerations;
- When an unlawfully dismissed employee is reinstated and upon his appearing to the enterprise to take his previous position he has not been admitted to take that position, the employer shall be liable to the employee for payment a compensation in the amount of his gross labour remuneration from the day of the appearing to the day of his actual admission to work.
The employer and the reliable person shall be jointly liable for any detriment caused to an employee because of:
- a failure to issue or late issuing of documents needed by the employee certifying facts related to the employment relationship;
- entry of false data in the said documents;
- a wrongful detention of the work book after termination of the employment relationship.
The compensation under items (i) and (ii) includes not only the material, but also the non-material damages.