An Introduction to Bulgarian Employment Law

The employment in Bulgaria is governed mainly by the Labour Code. The latter is applicable to all employment contracts with Bulgarian employers and joint ventures registered in Bulgaria, as well as to employment contracts between Bulgarian citizens and foreign enterprises in Bulgaria.
It should be noticed 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:
Within three days of concluding or amending the employment contract and within seven days of termination thereof, the employer shall be obliged to notify thereof to the respective Local Department of the National Revenue Agency.
In the Bulgarian legislation there are specific requirements for conclusion of an employment agreement with foreign citizens. Depending on their citizenship – if it is of a Member state or not, the procedure differs.

Duration
The employment contract may be concluded:

for an indefinite period;
as an employment contract for a fixed term.

An employment contract concluded for an indefinite period may not be transformed into a contract for a fixed term, except where explicitly desired by the employee. On the contrary, it is possible to transform an employment contract for a fixed term into one for an indefinite period if the employee continues working at least 5 days after the expiration of the agreed period without the written objection of the employer and in case the position is available.

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 for agreed compensation, where the compensation should amount not less than four gross monthly salaries;

It has to be noticed that certain groups of employees are under special protection and for their dismissal a prior consent of the Labour inspectorate or a trade union body 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 to be given by an employer to terminate the employment contract is 30 days unless otherwise agreed but not longer than 3 months.

In the case of collective dismissals there is 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. As collective dismissals are considered dismissals effected on the employer's initiative for one or more reasons not related to the individual worker or employer concerned. In the legal definition the number of dismissals considered as collective is given depending on the total number of employees in the enterprise. In case non-observance of the procedure under the Employment Promotion Act the employers may suffer certain sanction provided in law.

In case of merger or acquisition or in the event of the 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 remaining unemployed, as the amount of the compensation is up to 1 month salary;
Compensation for unused annual paid leave. The employer owes compensation only for the days of the unused annual leave proportionally to the work period. The amount of the compensation shall be determine on the basis of the gross salary calculated for the previous month in case the employee had worked out at least 10 working days from it effectively.

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.
Under the claim the dismissed employee is entitled to claim announcement of the dismissal as unlawful, re-installment and compensation.

In case the court rules that the dismissal is unlawful it shall adjudge compensation which is as follows:

Upon wrongful 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 caused by reason of the said dismissal, 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 in the remuneration.
When an unlawfully dismissed employee is reinstated and upon reporting to work to his former position he is prevented from taking that position, the employer shall be liable to the employee in the amount of his gross labour remuneration from the day of reporting 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 said employee certifying facts related to the employment relationship;
entry of false particulars in the said documents.
a wrongful detention of the work book after termination of the employment relationship.

This compensation includes not only the material, but also the non-material damages.

Law Firm Dyulgerova and Penkova

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