Varadinov & Co
Yanislava Chankova–Docheva and Yulia Vesselinova, LL.M
1. SOURCES OF EMPLOYMENT LAW
According to the Bulgarian legal tradition, sources of employment law are only statutory instruments. The main acts are the Constitution of the Republic of Bulgaria, the statutes, the acts on the implementation of the relevant statutes and the international agreements. The latter prevail over the domestic legislation in cases of controversy. The relevant European law is a very important source of employment law and prevails over the national sources especially after the Republic of Bulgaria officially joined the European Union on 1 January 2007. In that respect, it must be stressed that the current national legislation has already been to a large extent synchronised with the EU law. The court of law’s decisions also have considerable importance, but they are deemed not to create precedents.
Some of the most important statutes are:
Code on Social Security
Law on Social Assistance
Law on Children Protection
Law on Employment Stimulation
Law on Professional Qualification and Education
Law on Healthy and Harmless Working Conditions
Non-Discrimination Protection Act
Law on Labour Inspection
Law on Collective Labour Disputes
Law on Information of the Employees Working in Multinational Enterprises, Groups of Enterprises and European companies
Law on Guaranteeing Employees’ Receivables in Case of Employers’ Insolvency
There is a great variety of acts on implementation of the above said statutes. Some of the most important ordinances, having wide practical applicability, are:
Ordinance on Working Time, Rests and Leaves
Ordinance on Labour Rehabilitation
Ordinance on Allocation and Payment of Compensations Due to Unemployment
Ordinance No 7/1999 on Minimum Requirements for Healthy and Safety Working Conditions and with Regard to the Use of Work Equipment
Ordinance on Pensions and Contributory Service
Ordinance on Negotiating the Employment Remuneration
Ordinance on the Additional and Other Employment Remunerations
Ordinance No. 25/2008 on the Labour Medicine Offices’ Regulation
Ordinance on Defining Kinds of Labour Activities for which Additional Paid Annual Leave is set
Ordinance on Defining Kinds of Labour Activities for which Diminished Working Time is set
2. PRINCIPAL INSTITUTIONS
Ministry of Labour and Social Policy (MLSP)
The Ministry of Labour and Social Policy (MLSP) is the state executive institution which administers employment issues. The said institution is a body of the Council of Ministers and is tasked with developing, coordinating and implementing state policy in the field of labour, professional qualification, incomes and living standards, industrial relations, health and safety at work, social security and social assistance. The MLSP implements state policy through its specialised units, including:
• National Employment Agency;
• General Labour Inspectorate Executive Agency;
• Social Assistance Agency;
• State Agency for Child Protection;
• The relevant regional structures of the above stated bodies, etc.
In the field of labour market and professional qualification, the Ministry:
• regulates the activity of the labour market institutions at national and regional level, as well as deals with unemployment protection and employment promotion;
• executes independently and jointly with other institutions the state policy in the field of qualification and prequalification of the workforce;
• proposes drafts and creates conditions for implementation of the inter-government agreements relating to the labour force;
• participates in the supervision over specialised insurance funds for protection against unemployment;
• develops legislative drafts in the field of the state regulation of remuneration in the real and public sectors, etc.
The MLSP also executes the state supervision for compliance with legislation in the field of employment relationships, health and safety at work, employment and professional qualification, employment remuneration, social security and social assistance; the implementation of and compliance with the international agreements in the field of labour market, social policy and social security. The supervision comprises issuing obligatory prescriptions by the respective supervisory bodies of the said Ministry in a number of legally-specified cases, for example in cases of breach of the employment discipline, etc.
General Labour Inspectorate Executive Agency
Overall control for observance of labour legislation in all sectors and activities is exercised by the General Labour Inspectorate Executive Agency with the MLSP. The government ministers, the heads of other central government departments and the local government authorities exercise control over the observance of labour legislation through their own specialised authorities. Within the limits of the competence thereof, the control authorities have the following rights:
• to visit at any time the ministries, the other central government departments, the enterprises and the other places where work is performed, as well as premises used by factory and office workers;
• to require from employers explanations and submission of all necessary documents, papers and information in connection with the exercise of control;
• to obtain information directly from factory and office workers on all matters related to the exercise of control;
• to take specimens, samples and other such materials for laboratory tests;
• to establish the reasons and circumstances under which employment injuries have occurred.
The employers, the officials and the factory and office workers are obliged to co-operate with the control authorities in the performance of their functions. The National Revenue Agency is obliged to present to the control authorities the tax and social insurance information necessary for the purposes of control over observance of labour legislation.
The control authorities are obliged:
• to respect the secrecy of the confidential and restricted information that has come to their knowledge in connection with the exercise of control, as well as not to use any such information in an economic activity of their own;
• not to disclose the source of information which has alerted them of a violation of labour legislation.
Control over observance of labour legislation may not be exercised by any person who has a direct or indirect interest in the activities of the entities controlled.
For prevention and cessation of violations of labour legislation, as well as for prevention and elimination of the harmful consequences of any such violations, the supervising bodies of the Labour Inspectorate may apply different coercive administrative measures, such as:
• to give mandatory prescriptions to employers and officials for elimination of the violations of labour legislation;
• to suspend the endorsement of designs, as well as the commissioning of buildings, machinery and facilities if the rules for health and safety at work and social and welfare services have not been observed;
• to suspend the operation of enterprises, production lines and projects, including the construction and remodelling thereof, as well as machinery, facilities and work stations, where the violations of the rules for health and safety at work pose a hazard to human life and health;
• to suspend from work factory and office workers who are not familiarised with the rules for health and safety at work and do not possess the required licensed competence;
• to give prescriptions for introduction of a special pattern of safe work if workers’ life and health are exposed to a serious and immediate hazard, should it be impossible to apply Item 3 above, etc.
Latter Amendments in Relation to the Control for Compliance with Employment Law (Article 402-408 LC)
With the amendments made in 2008 in the LC, the powers of the control bodies in regard to making inspections for compliance with employment law have been extended. Now when carrying out inspections they can demand:
• presentation of certified copies of documents;
• exhibition of ID documents by the persons present at the territory of the controlled site;
• declaration in writing by the persons of facts and circumstances related to the carrying out of work, including with regard to the payment for work.
The control bodies can use technical devices and equipment to measure the factors of the working environment.
In 2008 amendments and supplements in regard to the establishment and announcement of the existence of an employment relation were provided for in the law. The control bodies of the Labour Inspectorate can determine the starting date of the employment relation where this date is obligatory upon subsequent conclusion of the employment contract.
The introduced amendments in 2008 increased from three to seven times the amounts of the penalties which are imposed on legal persons and the fines for natural persons for violating the provisions for securing health and safety at work, as well as the penalties for other violations of the employment law besides these and for non-performance of instructions of control bodies. The penalty for non-payment of the amounts due within one month represents an accrual of interest on the main liability at the basic interest rate of Bulgarian National Bank for the period plus 20 points. Obligations under penal ordinances that have come into force can be paid by installments on request of the violator, except on occasions when liquidation or insolvency proceedings have commenced.
The amendments also introduce the institution of an agreement in the administrative-penal proceedings in relation to established violation of the employment law. The agreement pre-supposes the reaching of agreement between the administrative-penal body and the violator on the questions of the factual contents of the liability and the type and amount of the penalty.
3. ROLE OF THE NATIONAL COURTS
3.1. Labour disputes
The Labour Code (LC) provides a legal definition of the term ‘labour dispute’. According to the LC, labour disputes are the disputes between an employee and an employer involving the formation, existence, implementation and termination of an employment relationship, as well as the disputes concerning the performance of collective agreements and the ascertainment of the length of employment service. The disputes are deemed as arising by non-subordination relationships, whereby parties possess equal rights and therefore labour disputes are characterised as civil ones, according to the meaning of the Civil Procedure Code. Accordingly, the general civil procedure rules provided for in the Civil Procedure Code are applicable with respect to the problems about which the LC does not envisage explicit regulations.
3.2. Legal prescription
Labour disputes shall be actionable within the following prescription periods:
• one month: for disputes over limited financial liability of a factory or office worker, for revocation of a disciplinary sanction of reprimand;
• two months: for disputes for revocation of a disciplinary sanction of warning of dismissal, change of the place and of the nature of work, and termination of the employment relationship;
• three years: for all other labour disputes.
The periods stated above shall begin to run as follows:
• for legal actions for revocation of a disciplinary sanction and over a change of the place and of the nature of work: as from the day on which the respective order has been served on the factory or office worker, and for legal actions regarding termination of an employment relationship, as from the day of termination;
• for other legal actions: as from the day on which the right in action became exigible or exercisable. For claims in cash, the exigibility shall be presumed as occurring on the day on which payment was due according to the established procedure.
The periods specified above shall not be considered lapsed in cases where the statement of action has been submitted within the term set, but to a non-competent authority. In such case, the statement of action shall be forwarded to the court-of-law ex officio.
Proceedings in labour cases shall be free of charge to the factory and office workers. They shall not pay fees and expenses on proceedings, including for applications for reversal of effective judgments on labour cases.
3.3. Governing law to employment contracts with an international element
In 2008 several amendments in the effective Bulgarian LC were promulgated and came into force. A new wording of Article 10 of the LC on the governing law to employment relations with international element was adopted with the purpose of harmonising the law on employment relations with international element. An explicit new provision in the LC has been introduced, which entitles the parties to the employment relation with an international element to choose foreign law to be applicable to the relation between them. Nevertheless, on all these occasions the parties will not be able to evade the validity of the mandatory legal provisions of the state where the work is being carried out, when two cumulative conditions are met:
• the state where the work is being carried out is the Republic of Bulgaria, a European Union member state, or a member state to the European Economic Area Agreement or Switzerland; and
• the mandatory legal provisions of that state give the employee a more favourable protection regime.
Labour disputes in Bulgaria are examined by the civil courts of law. There are no specialised labour courts of law (tribunals, commissions, etc.) which examine only labour disputes. The courts hear and decide said disputes according to the procedure established by the Civil Procedure Code, save insofar as otherwise provided for by the LC.
Since 1 March 2008 the new Bulgarian Civil Procedure Code (CPC) has come into force introducing several entirely new points regarding and connected with the labour disputes legislation.
The first refers to the instance jurisdiction: civil cases regarding labour disputes shall be examined by the district courts acting as a first instance, even where the claim exceeds BGN 25000. In common law, case claims worth more than BGN 25000 shall be examined by the county courts acting as a first instance. The relevant county courts hear the labour disputes as a second instance. The scope of labour cases which may be appealed before the High Court of Cassation is limited by the law. According to the legislation in force, only the following judgments may be appealed before a cassation court: judgments concerning claims about unlawful dismissals and concerning employment remunerations and indemnities, etc. with a claim worth more than BGN 1000. The new CPC envisages several grounds for admissibility of the cassation complaint:
• the previous court in its decision has considered a question of either a procedural or of non-procedural character and that question has been adjudicated contrary to the practice of the Supreme Court of Cassation;
• the problem raised in the complaint and considered in the previous court’s decision has generally been an object of a contradictory adjudication by the courts;
• the problem raised in the complaint is an important one with respect to strict application and development of the law.
The new CPC (in the Provisional articles) regulates the procedure regarding complaints filed until the entering into force of the new procedural rules (i.e. before 1 March 2008). These complaints shall be heard by the relevant Court of Appeal which shall be obliged to observe the Supreme Court of Cassation’s procedure under the abolished CPC. The cases which were constituted in the Supreme Court of Cassation but hearings were not set until 30 June 2008, shall be heard by the relevant Court of Appeal which shall be obliged to observe the Supreme Court of Cassation’s procedure under the abolished CPC.
The LC does not envisage any specific rules with regard to the venue competence: the court, where the defendant is domiciled or has its registered seat, shall have jurisdiction. There are some exceptions to the above stated general rule, concerning the venue competence regarding labour disputes. Claims against state entities and juridical persons shall be filed with the court in the district where they have their headquarters or address of management registered. The new legislative decisions envisage that the claims regarding labour disputes arising from direct relationships with units or branches of state entities or juridical persons, may be filed with the court within the seat of business of the former (Article 108 (1), CPC).
A new point is also the ability for the employee to file the claim against the employer with the court within the area where the work is usually carried out (Article 114 CPC). The new legislation provides for a validity condition about agreements for change of venue competence: a contract between the parties for selection of a court with regard to a labour dispute to be heard, shall be valid only if such an agreement is concluded after the arising of the dispute (Article 117 (3) CPC).
The new CPC also envisages a new arrangement with respect to the filing of the claim and filing of the answer to the claim by the defendant. In order to be constituted a civil case, it is necessary that the claimant files a claim. The legislative changes envisage that the defendant files an answer to the claim within a definite term. After receiving the claim, the court is obliged to send a copy of it together with all the appendices to the defendant. The judge shall give the defendant a definite term, specified in the CPC (one month) for a written answer to the claim. The defendant shall also be notified about the consequences of not observing the term for filing the answer and for the option to use an attorney’s services if they wish to (Article 131(1), CPC). The defendant is obliged to point out in the answer all their evidence (to present the written evidence) and the specific circumstances which they will prove in the course of the civil procedure. The CPC provides for the specific requisites of the answer. The legislative decisions promulgated by the new CPC (including the new regime for serving court notifications and summons) intend to speed up the civil court procedure.
The next new point in the labour disputes’ legislation deals with the prompt procedure regulation. In the new CPC the prompt procedure is limited and strictly defined by the law. The courts shall be obliged to apply the said procedure in the following cases:
• claims for employment remuneration;
• claims against unlawful termination of the employment relationship, demanding revocation of the termination;
• claims demanding reinstatement in the former job position of the employee;
• claims for compensation and indemnification for the period of time the employee has been unemployed as a result of unlawful dismissal;
• claims demanding correction of the grounds for dismissal entered in the labour record of the employee or in another significant document.
The procedure regarding employees’ claims demanding monetary receivables (compensation and indemnification) other than those envisaged above shall follow the common rules. According to the abolished CPC (Article 126а CPC) the choice of whether the labour dispute would follow the prompt procedure or not had been left entirely to the discretion of the employee-claimant. The new regime envisages that in the above stated cases the prompt procedure shall be obligatory. There already exist certain doubts among practising attorneys about whether the pointed labour disputes shall succeed in following the very short terms of the prompt procedure. For example, the claims against unlawful dismissal and demanding compensation require a relatively long period of time to be examined by the courts, court experts to be heard, other evidence to be collected, etc.
The next legislative amendment is the abandonment of the possibility for the employee to obtain a writ of execution for their receivables based on the employment relationship, but without having tried the case under the common court procedure. This opportunity was provided for in Article 237, letter ‘G’ of the abolished CPC.
4. EMPLOYMENT STATUS AND CATEGORIES OF WORKERS
4.1. Grounds for formation of employment relationships
The grounds with respect to the formation of an employment relationship represent juridical facts, due to which existence the law envisages the establishment of individual employment relationships. They belong to the category of the lawful, law originated, juridical actions. The LC sets three basic grounds for the formation of employment relationships:
• an employment contract;
• an election;
• a competitive examination.
There are also some specific grounds for formation of employment relationships, not provided for by the LC, for example a guilty verdict, which imposes as punishment reformatory work without imprisonment.
The Law on Administration and the Law on Government Service, both adopted in the period 1998-99, introduced essential modifications on the scope of the LC. The Law on Government Service put government employees out of the scope of the LC and subordinated them to the regime of an official relationship, which differs from the employment one according to the LC. At the same time the Law on Administration kept within the scope of the LC, respectively, employment relationships, some categories of employees in the administration, for example the members of the political cabinet of the Prime Minister, as well as the experts in the specialised and municipality administration.
4.2. Types of employment contracts
Fixed-term and indefinite contracts
Employment contracts without a fixed term are called contracts with indefinite duration. The LC sets a presumption that an employment contract is concluded for an indefinite period of time, unless it specifies a fixed term.
The law limits the possibilities for concluding fixed-term employment contracts. Such contracts can be concluded in the following cases only:
• for a definite period, which may not exceed three years, insofar as a law or an act of the Council of Ministers does not provide otherwise. This kind of contract should be concluded for execution of casual, seasonal or short-term work and activities, as well as with newly-hired factory and office workers in enterprises that have been adjudicated bankrupt or are under liquidation procedure;
• until completion of a specific work;
• for temporary replacement of an employee who is absent from work;
• for work in a position that is intended to be occupied through a competitive examination: for the time being until the position is occupied on the basis of a competitive examination;
• for a certain term of office, where a duration of the mandate has been specified for the respective body.
The employment contract, concluded for a fixed term shall transform into an employment contract with indefinite duration in case, after the expiry of the term of the contract, the employee continues to work for five or more working days without written objection of the employer and the respective position is not occupied.
B. Individual and collective employment contract
According to the LC, the employment contract should be concluded between an employee and an employer according to their mutual will. The Code requires the individual employment contract to be concluded in written form before the commencement of the employee’s work.
The law also sets out the grounds for a team signed agreement too. This kind of agreement is used in the sphere of construction, agriculture, etc. and is concluded for fixed work. Its peculiarity is the contract conclusion by one authorised member of the team. A list of the whole team should be presented at the contract conclusion. On the basis of this sole collective agreement arise individual employment relationships between the employer and each one of the team members.
C. Employment contract for trial period
This sort of contract shall be concluded between the parties, where the work requires testing the employee’s ability to perform it or, respectively, where the employee wishes to verify whether the work is suitable for them. The trial period shall be up to six months and the parties shall also negotiate in which party’s benefit the trial period is agreed – i.e. which party would be entitled to unilaterally terminate the agreement without notification within the trial period. Where this is not specified in the contract, the trial period shall be presumed to be agreed to the benefit of both parties. During the trial period the parties shall have all rights and duties as under a final employment contract. An employment contract for a trial period may be concluded with the same employee for the same type of work at the same enterprise only once. The employment contract for a trial period shall be considered transformed into an employment contract with indefinite duration, if it has not been terminated within the trial period by the party, for whose benefit the trial period clause has been agreed.
D. Contracts regarding the professional qualification of the employees
Contract for attainment of qualification
The employer may conclude a contract for attainment of qualification with a person who is entering or has been enrolled into an educational establishment. Under the contract, the employer shall undertake:
• to provide the trainee with allowance and other facilities in connection with the training;
• upon completion of the training, to employ the trainee providing them a job position suitable for the qualification attained for the period agreed between the parties, which may not be longer than six years.
The obligations of the trainee under the specified contract shall include:
• to compete the training within the curriculum of the agreed qualification without undue delay;
• to work for the employer for the agreed period of time.
By an apprenticeship contract, the employer shall undertake to train the apprentice in the process of work in a specified job position or specialty and the apprentice shall undertake to master the said occupation or specialty. The contract shall specify the forms, the place and the duration of training, which cannot be longer than six months, the compensation, which the parties owe each other upon non-performance, as well as other matters related to the delivery of the training. Under the agreement, the parties shall specify the period during which the apprentice undertakes to work for the employer after the successful completion of the training and the employer undertakes to provide to the apprentice a type of work conforming to the qualifications attained. That period may not exceed three years.
Contract for qualification upgrading and for retraining
The parties to an employment relationship may conclude a contract for upgrading of the employee’s qualification or for attainment of qualifications in another occupation or specialty (retraining). The contract shall specify:
• the occupation and specialty in which the factory or office worker is to be trained;
• the place, form and duration of the training;
• the financial, welfare and other conditions for the duration of the training.
F. Collective employment contract
The collective employment contract regulates those issues of the labour and social security relationships of employees, which are not regulated by mandatory provisions of law. The collective employment contract may not contain clauses, which are less favourable to the employees, than the provisions of the law or of a collective agreement, which is binding on the employer.
The LC envisages four levels of collective negotiations:
• by enterprises;
• by branches;
• by industries;
• by municipalities.
Only one collective employment contract may be concluded at the level of an enterprise, a branch and an industry. Within an enterprise, the collective employment contract shall be concluded between the employer and a trade union organisation. The trade union organisation shall prepare and submit the draft of a collective employment contract. Where more than one trade union organisation exists within one enterprise, they shall submit a common draft.
The collective contract shall be concluded in writing in triplicate – one copy for each of the parties and one for the respective labour inspectorate, and shall be signed by the representatives of the parties. To be valid, the collective contract must be in writing and recorded in a special register at the labour inspectorate in the area, where the employer’s registered office is located. In case a dispute arises regarding the text of the contract, the recorded text shall prevail.
The employment contract is a bilateral agreement. Its peculiarity, compared with all other agreements, is the object: through the employment contract one of the parties (the employee) places at the disposal of the other party (the employer) their labour power – their physical and mental abilities. This kind of contract is concluded for the exercise of labour with durable characteristics, which do not change and do not get exhausted by a single, one-time execution and always contain multiple repetitions.
The employment contract is always made in return for a remuneration, which is never less than the legal minimum wage.
Any form of employment contract must be in writing. Apart from simply proving the existence of the contract, the written form represents a condition for validity thereof (a form ‘ad solemnitatem’).
Within three days of the conclusion or modification of an employment contract and within seven days of its termination, the employer or a person authorised by it is obliged to send a notification to the relevant territorial directorate of the National Revenue Agency. Before the employee commences to work, the employer is obliged to provide them with a copy of the employment contract as concluded, signed by both parties, as well as with a copy of the above notification, certified by the territorial directorate of the National Revenue Agency.
6. TERMS AND CONDITIONS
6.1. Mandatory and supplementary content
The employment contract shall have the mandatory content, defined by the law as follows:
• personal data of the parties;
• place of work;
• designation of the position and the character of the work;
• date of its conclusion and the starting date of its performance;
• duration of the employment contract;
• amount of basic and extended paid annual leave and of additional paid annual leaves;
• equal length of the period of notice to be observed by both parties upon termination of the employment contract;
• basic and supplementary labour remunerations of a permanent nature, as well as the frequency of their payment;
• duration of the working day or week.
The employment contract may contain other conditions related to the exercise of labour – called also supplementary or facultative content of the contract. Such conditions shall:
• be out of scope of the mandatory provisions of the law;
• be more favourable with respect to the employee than those established by the collective agreement.
6.2. Employers’ obligations – significant legislative amendments
A significant part of the 2008 amendments in the LC has been introduced with the purpose of improving the effectiveness of the control on the establishment, performance and termination of employment relations, by imposing new obligations on employers or expanding the contents of esixting obligations. The amendments concern the following:
• the order for serving job descriptions has been elaborated;
• the employer shall issue documents certifying facts related to the employment relation within 14 days of receipt of a request in this regard;
• the employer is not allowed to introduce open-ended working hours for employees working under the conditions of reduced working hours as per Article 137 of the LC (Article 139a, paragraph 2 LC);
• the former right of the employer to adopt Internal Works Rules is now formulated as an obligation to adopt and issue such rules;
• it is already a statutory obligation of the employer to maintain and enhance the employees’ professional qualification. An obligation of the employee to participate in the training forms organised or financed by the employer under this item corresponds to the obligation of the employer;
• the obligation of the employer to register and keep an inspection book in which the findings of the control bodies from the inspections performed and the instructions of the control bodies are recorded has been detailed and expanded. Acts establishing administrative violations, drawn up by the control bodies during inspections shall also be recorded in the inspection book on the occasions when there is some impediment for serving these acts immediately;
• revocation of the provision of Article 114 LC, under which the working time was not acknowledged as length of service in cases where the employee worked for one employer up to five working days, respectively – up to forty hours per month, in total.
6.3. Working time
The working time is a period during which the employee is obliged to execute their duties rising from the employment relationship. The observance of the working time is one of the essential obligations of the employee. The working time duration is connected with and is specified by the working week. The working week, on its side is a norm regarding the duration of the working time within a calendar week. The term ‘working week’ means, first the number of the days, defined as working days, during a calendar week, and second the total sum of the working hours during the working week.
The working week in Bulgaria is five days’ long, i.e. the employee is obliged to work under their employment relationship during five successive working days in the course of the calendar week, after which the employee has the right to take a mandatory break.
The normal duration of the working week is up to 40 hours and the duration of a normal working day during a 24-hour period is not more than eight hours.
The employer may, by ordinance issued in writing, prolong the set working time during the work days for production reasons and to compensate by reducing hours worked on other days. This may be done only after a preliminary consultation with employees’ representatives, unless it is agreed otherwise in a collective employment contract. The employer has to inform the Labour Inspectorate with regard to any planned prolonging. The duration of the prolonged working day shall not exceed 10 hours. Some exceptions are settled, for specific issues, for instance by a diminished working day, etc.
The LC sets out diminished working time for specific categories of employees, as well as other unsual conditions of work, as follows:
• employees who are working in conditions injurious to their health or perform work in conditions specified by a Council of Ministers’ Resolution;
• mployees who are under 18 years.
The parties to the employment contract may agree on work for a part of the statutory working full time (part-time work). The parties shall specify the duration and allocation of the working time. The duration of the discribed working time may not be less than half of the statutory duration for the period of calculation of the working time.
The rest is a time period during which the employee is not obliged to perform work under their employment relationship and is the subjective right of the employee under the individual employment relationship.
The working time of the employee must contain one or several rest breaks. The Interior Regulations usually set the specific duration and allocation of the rests during the working day. The rests during the working day may be defined in the employment contract too. The employer has to provide the employee a rest break for a meal, which may not be shorter than 30 minutes. The rest breaks shall not be included in the working time. The employee shall be entitled to an uninterrupted daily rest period which may not be shorter than 12 hours. Weekly rest is the rest between two consecutive working weeks. The employee shall be entitled to a weekly rest of two consecutive days, one of which shall in principle be Sunday. In such cases, the employee shall be provided with a weekly rest period of at least 48 consecutive hours.
According to Bulgarian legislation an employee is entitled to paid annual leave. When beginning work for the first time, the employee may use their paid annual leave after at least eight months of employment service. The LC sets the minimum duration of the paid annual leave at not less than 20 working days. Certain categories of employees, depending on the special nature of work, shall be entitled to use an extended paid annual leave. Such categories of employees and the minimum duration of such leave shall be determined by the Council of Ministers.
The right to paid annual leave is a subjective right of every employee and is legally guaranteed. The reason of this normative resolution is to enable the employee to have at their disposal the chance for optimal long rest and recovery. A refusal of the said right is inadmissible. Main specifics of this kind of leave are that they are paid and afforded on an annual base. The LC further develops the constitutional norm, which guarantees the employees’ right of rest. The LC prohibits that the paid annual leave be compensated in cash, except upon termination of the employment relationship.
According to Bulgarian legislation, there is an option for an employee to use an additional paid annual leave after at least eight months of employment and observing other certain circumstances:
• for work under specific conditions, or conditions harmful to life and health, which cannot be eliminated, restricted or reduced, regardless of the measures taken – not less than five working days;
• for open-ended working hours – not less than five working days.
The parties may negotiate in the individual and/or collective employment contracts a longer duration of leave than that set by law.
Upon the employee’s request, the employer may grant an unpaid leave. Unpaid leave up to 30 working days shall be considered when establishing the total length of employment service, and unpaid leave in excess of 30 working days shall be included in the length of employment service only by exception (for example by an act of the Council of Ministers). The employee may use this kind of leave regardless of whether or not they have used their paid annual leave and irrespective of the duration of their length of employment service.
Other types of leave
The LC sets some other kinds of leave, as follows:
• leave for performance of civic, public and other duties/two working days for marriage, blood donation, in the event of death of a family member etc;
• trade union activists’ leave;
• temporary disability leave;
• pregnancy, child birth and adoption leave;
• childcare leave until child’s attainment of certain years of age;
• nursing and baby feeding breaks leave upon parents death or severe illness;
• paid leave for two or more living children;
• paid or unpaid study leave;
• leave for entrance examination at educational establishment.
In order to equalise parental rights when using leave for childbirth and for raising a small child, several important amendments of the LC, effective as of 22 December 2008 and as of 2 January 2009, have been introduced. They refer to cases when the mother and father are married or share a household. The father (also the adoptive father) is entitled to use a leave of 15 days upon childbirth as of the discharging of the child from hospital. He is also entitled to use the leave for raising a small child up to 410 days instead of the mother. For the period during which the father is using both mentioned leaves, the father is under protection from dismissal. The only grounds on which his employment relation can be terminated by the employer is the closing down of the enterprise.
An important new provision has been introduced that during the annual paid leave the employer is obliged to pay a remuneration calculated on the average daily gross remuneration accrued by the same employer for the last calendar month preceding the using of the leave, in which the employee has worked at least 10 days.
7. EMPLOYEE REPRESENTATION
The Bulgarian Constitution sets the employees’ right to associate themselves in trade union organisations in order to protect their legal rights and interests. Furthermore, the Constitution sets out also the employers’ right to associate themselves in organizations in order to protect their economic interests (Article 49, paragraph 2 of the Bulgarian Constitution).
7.1. Trade union organisations and employers’ organisations
The LC develops further the Constitutional rights of the employment relationship parties and grants to the trade union and employers’ organisations internal structural autonomy. The said principle corresponds to Article 3 of Convention 87 and to Article 2 of Convention 98 of the International Labour Organisation.
The main features of the structural autonomy are as follows:
• the organisations draft and accept their by-laws and internal rules on their own within the framework of the law;
• the organisations elect their managing bodies and representatives at regional and national level;
• the collective bodies organise their management independently, adopt action plans etc.
8. INFORMATION AND CONSULTATION
Trade union organisations as well as employers’ organisations have some specific features and functions connected with consultation and participation in the formation and development of the employment relationships:
• tri-party co-operation participation;
• participation in collective negotiating;
• participation in drafting of internal regulations of the enterprise; the employer is obliged to invite the employees’ representatives to do so;
• participation in discussions of industrial and social security issues for the national leaderships of the organisations;
• representation before court. Trade union organisations are entitled upon employees’ request to represent them as authorised representatives before the court. They may not conclude settlements, acknowledge legal actions, waive, withdraw or reduce the demands of employees, or collect any amounts on behalf of the persons represented, unless they have been expressly authorised to do so;
• concluding collective employment agreements.
9. EQUAL OPPORTUNITIES
9.1. Prohibition on discrimination
The LC sets the equality principle with regard to the performance of employee’s rights and duties under the employment relationship. The law forbids any discrimination, privileges or restrictions of the rights and duties, based on criteria unconnected to the employment relationship. The LC develops further the common Constitutional principle for prohibition of discrimination [Article 6(2) ] and is related to Article 4(1) of the Discrimination Protection Act, as well as with the texts of the Convention 111/1958 of the International Labour Organisation, etc.
Bulgarian employment legislation forbids discrimination on the grounds of ethnicity, origin, gender, sexual orientation, race, skin colour, age, political and religious convictions, affiliation to trade union and other public organisations and movements, family and property status, existence of mental or physical disabilities, as well as differences in the contract term and the duration of working time.
9.2. Direct and indirect discrimination
The LC forbids direct as well as indirect discrimination. The said diversification in the internal legislation is transposed from the European Union law – Article 119 of the EU Contract, Article 2(1) of Directive 76/207/EEC; Article 5(1) and Article 6 of Directive 86/378/EEC; Directive 2000/43/ЕU; etc. Direct discrimination as proclaimed in legal or another official act is usually manifested as a distinction based on origin, gender, sexual and or political orientation. Indirect discrimination is legally defined in Article 4, paragraph 3 of the Discrimination Protection Act and covers an employee being placed in a less favourable position due to the above stated circumstances in consequence of ostensibly neutral norm, criteria or practice. The indirect discrimination leads to formation of factual inequality between employees.
10. DISCIPLINE AND TERMINATION
10.1. Labour discipline and discipline sanctions
The guilty non-performance of the employment duties, set out in law or in the Internal Rules of an enterprise, constitutes a breach of the employment discipline. The employer is entitled to levy specific, legally fixed sanctions on the employee in breach, notwithstanding the economic, administrative and criminal amenability of the same.
The LC describes the most widespread breaches of work discipline. The enumeration is not exhaustive. The following shall constitute breaches of work discipline:
• reporting for work late, leaving early, being absent from work or failing to utilise working time efficiently;
• the factory or office worker reporting for work in a state which prevents them from fulfilling the tasks assigned to them;
• non-execution of the work assigned, non-observance of the technical and technological rules;
• production of inferior-quality output;
• non-observance of the rules for health and safety at work;
• non-execution of the lawful orders of the employer;
• abusing the confidence and damaging the reputation of the enterprise, as well as disclosure of data which is confidential in respect of the enterprise;
• damaging the employer’s property and the squandering of prime and raw materials, energy and other resources;
• non-fulfillment of other labour duties provided for by laws and other statutory instruments, by the internal works rules, the collective agreement or established upon the formation of the employment relationship.
The employer is entitled to levy a discipline sanction, as mandatorily specified by the law, when the employee commits a breach of work discipline. The discipline sanctions are numerus clausus listed in the LC, as follows:
• warning of dismissal;
When determining the disciplinary sanction, consideration shall be given to the gravity of the breach, the circumstances of the commission, as well as the conduct of the employee. Only one disciplinary sanction may be imposed for one breach of work discipline, i.e. Bulgarian employment legislation acknowledges the one breach-one sanction principle (‘non bis in idem’).
For the most serious work discipline breaches, the LC envisages the employer dismissing the employee as a discipline sanction. A dismissal for breach of discipline may be imposed after:
• reporting for work late or leaving early on three occasions, each of not less than one hour, within one calendar month;
• being absent from work over the course of two consecutive working days;
• systematic breaches of work discipline;
• abusing the employer’s confidence or disclosing data which is confidential in respect of the employer;
• inflicting detriment on members of the public by factory or office workers in distributive trade and services through overcharging, shortweighting, or supplying goods or services of quality inferior to the stated quality;
• participation in games of chance through telecommunication facilities of the enterprise, and the costs incurred shall be restored in full;
• other grave breaches of the work discipline.
10.2. Procedure for imposing a discipline sanction
According to Bulgarian legislation, disciplinary sanctions shall be imposed by the employer, a person designated by him, or by another authority empowered by law. Before imposing a disciplinary sanction, the employer is obliged to give the employee a hearing or to accept their written explanations and gather and assess any specified evidence. Where the employer has failed to give the employee a hearing or to accept their written explanations before imposing the sanction, the court shall revoke the disciplinary sanction without examining the case on the merits.
Disciplinary sanctions shall be imposed within two months of detection of the breach and not later than one year after its commission. Once the described terms have expired, the possibility of a discipline sanction being imposed, is deemed precluded.
For a breach of discipline which also constitutes a criminal offence or an administrative violation related to the work assigned and established by an effective sentence or a penalty decree, the time limits under the foregoing paragraph shall begin to run as from the effective date of the sentence or penalty decree.
A disciplinary sanction shall be imposed by a reasoned order in writing, which shall specify some requisites:
• the identity of the offender;
• the breach;
• the date of commission thereof;
• the sanction;
• the provision of the law pursuant to which the sanction is imposed.
The disciplinary sanction order shall be served on the employee upon signed acknowledgement of service, noting the date of service. Should it be impossible to serve the order on the employee, the employer shall send the order to the worker by registered mail with advice of delivery. The disciplinary sanction shall be considered imposed as from the day of service of the order on the employee or as from the day of receipt of the order, where sent by registered mail with advice of delivery.
In some cases, mandatorily specified by the law, the employer owes compensation to the employees, for example:
• compensation for non admission to work;
• compensation for suspension from work;
• compensation for business trip;
• compensation by work relocation to another settlement;
• compensation upon occupational rehabilitation;
• compensation in an emergency;
• compensation upon employees lawful refusal to execute work;
• compensation for unobserved notice period;
• compensation for termination of employment relationship without notice, etc.
10.4. Termination of the employment contract
According to Bulgarian employment legislation, there are three groups of hypothesis when an employment agreement shall be terminated:
• without notice by either party to an employment relationship;
• only by the employee upon a preliminary written notice;
• only by the employer upon a preliminary written notice.
А. An employment contract shall be terminated without either party being obliged to give notice to the other party:
• by mutual consent of the parties, expressed in writing. The party who has been approached with the offer shall be obliged to take a stand on the offer and to inform the other party within seven days after receipt of the offer. Upon failure to do so, rejection of the offer shall be presumed;
• where the dismissal of an employee is pronounced unlawful (by the court), or where the employee is reinstated to their previous work by the court, but that employee fails to report to work within the time limit under the law;
• upon expiry of the agreed term;
• by the completion of the work as specified;
• upon return to work of the replaced employee;
• where the position has been designated for occupation by a pregnant woman or by an occupational rehabilitee, and an applicant who is entitled to occupy the said position appears;
• upon commencement of work by an employee who has been elected or who has won a competitive examination;
• if the employee is unable to execute the work assigned by reason of illness which has led to permanent loss of working capacity (disablement), or because of health contraindications on the basis of a conclusion of the medical expert board for working capacity certification. In such case, termination shall be inadmissible if the employer can provide another work suitable to the state of health of the employee and the said employee agrees to take it;
• upon the death of the person (the employer) wherewith the employee has concluded the employment contract ‘intuitu personae’;
• upon the death of the employee;
• owing to the designation of the position for occupation by a civil servant.
B. An employee may terminate the employment contract by giving the employer a written notice.
The period of notice of termination of an employment contract of an indefinite duration shall be 30 days, unless the parties have agreed on a longer period, but not longer than three months. The period of notice of termination of a fixed-term employment contract shall be three months, but not more than the remainder of the term of the contract.
The notice period shall begin to run on the day following the receipt of the notice. A notice may be withdrawn if the employee communicates this fact before or simultaneously with the receipt of the notice. With the consent of the employer, a notice may furthermore be withdrawn before expiry of the notice period.
C. An employee may terminate the employment contract in writing without notice, where:
• the worker is unable to execute the work assigned by reason of illness and the employer fails to provide the worker with another suitable work conforming to the prescription of the health authorities;
• the employer delays the payment of the labour remuneration or of a benefit under the LC or under social insurance;
• the employer changes the place or nature of work or the agreed labour remuneration, except in the cases where the employer has the right to make such changes, as well as where the employer fails to fulfil other obligations agreed by the employment contract or by the collective agreement, or established by a statutory instrument;
• as a result of a change of the employer (effected under Article 123(1) and Article 123a(1) of LC) the working conditions under the new employer deteriorate substantially;
• transfers to a salaried elective office or begins research work on the basis of a competitive examination;
• pursues studies as a full-time student at an educational establishment, or enrolls in a full-time doctoral degree course;
• works under a fixed-term contract and transfers to another work for an indefinite duration;
• is reinstated to work according to the established procedure by reason of pronouncement of the dismissal as unlawful, in order to take the work where the said worker has been reinstated;
• enters the civil service.
D. An employer may terminate the employment contract by giving the employee a written notice observing the notice in the following cases:
• upon closure of the enterprise;
• upon closure of part of the enterprise or downsizing of personnel;
• upon reduction in the volume of work;
• upon idling for more than 15 working days;
• where the factory or office worker lacks the capacity for efficient execution of the work;
• where the factory or office worker does not possess the educational level or professional qualification required for the work executed;
• upon refusal of the factory or office worker to follow the enterprise or a division thereof, in which the worker works, when the said enterprise or division relocates to another nucleated settlement or locality;
• where the position occupied by the factory or office worker must be vacated for reinstatement of an unlawfully dismissed factory or office worker, who previously occupied the same position;
• upon acquisition of entitlement to contributory-service and retirement-age pension, and applicable to professors, associate professors and senior research associates 1st and 2nd class and doctors of sciences, upon attainment of the age of 65 years;
• upon change of the requirements for execution of the position, if the factory or office worker does not satisfy the said requirements;
• when performance of the employment contract is objectively impossible.
10.5. Protection against dismissal
The LC sets out some mandatory norms with respect to the preliminary protection in cases of dismissal. The law protects some categories of employees, who belong to socially vulnerable groups or are in certain peculiar situations.
In specific cases, exhaustively described in the LC, an employer shall mandatorily obtain in advance a permission from the Labour Inspectorate for each particular case in order to dismiss:
• a female employee, who is mother of a child who has not attained the age of three years;
• an occupational-rehabilitee employee;
• an employee suffering from a disease designated in an ordinance of the Minister of Health (Ordinance No. 5, issued 20.02.1987);
• an employee who has commenced the use of a leave permitted to them;
• an employee who has been elected a factory and office workers’ representative according to the procedures established by the law, for the time until the worker acts in such capacity;
• an employee who is a member of a special body for conducting negotiations or a member of a European employees’ council, or a member of a representative body in a European commercial or cooperative company, for the time until the employee fulfils their duties in such capacity.
11. COLLECTIVE DISMISSALS
The LC defines the term ‘collective dismissals’ as dismissals effected upon the employer’s initiative for reasons not related to the individual factory or office worker concerned, where the number of dismissals is:
(i) at least 10 in enterprises normally employing more than 20 and less than 100 factory and office workers during the month preceding the collective dismissals and the dismissals are carried out over a period of 30 days;
(ii) at least 10 per cent of the number of factory and office workers in enterprises normally employing at least 100 but less than 300 factory and office workers during the month preceding the collective dismissals and the dismissals are carried out over a period of 30 days;
(iii) at least 30 in enterprises normally employing 300 factory and office workers or more during the month preceding the collective dismissals and the dismissals are carried out over a period of 30 days;
(iv) at least 20 in enterprises, regardless of the number of factory and office workers employed, and the dismissals are carried out over a period of 90 days.
If the employer has dismissed at least five factory and office workers within the periods under point (i) to (iii) stated above, each successive termination of an employment relationship which is effected on the employer’s initiative for reasons not related to the individual factory or office worker, shall be taken into consideration in order to establish whether there is a collective dismissal under points (i) to (iii) above.
11.2. Right to information upon collective dismissal and peculiarities of the procedure
Where an employer is planning collective dismissals, said employer shall be obliged to begin consultations with the trade union organisations’ representatives and with the factory and office workers’ representatives in good time, but not later than 45 days before the dismissals are to take effect, and to make efforts to reach an agreement with said representatives so as to avoid collective dismissals or reduce the number of workers affected and to mitigate the consequences of the dismissals. The procedure and the manner for conduct of such consultations shall be determined by the employer, the trade union organisations’ representatives and the factory and office workers’ representatives.
Irrespective of whether the decision leading to collective dismissals has been taken by the employer or by another legal entity, before the beginning of the consultations stated above, the employer shall be obliged to provide the trade union organisations’ representatives and the factory and office workers’ representatives under LC with information in writing on:
• the reasons for the planned dismissals;
• the number of factory and office workers to be dismissed, and the principal economic activities, groups of occupations and positions to which they belong;
• the number of factory and office workers employed in the principal economic activities, groups of occupations and positions within the enterprise;
• the specific indexes for application of the criteria for the selection of the factory and office workers to be dismissed;
• the period over which the dismissals are to be effected;
• the compensations due in connection with the dismissals.
The employer shall be obliged to forward a copy of said information to the competent division of the National Employment Agency within three working days after providing the information. The trade union organisations’ representatives and the factory and office workers’ representatives may send the competent division of the National Employment Agency comments on the information provided to them in connection with the planned dismissals.
The Law on Stimulation of the Employment also provides for an information obligation for the employer: not later than 30 days prior to the dismissals the employer shall inform in writing the relevant territorial department of the Employment Stimulation Agency regarding the planned collective dismissals. The Agency shall take some legally defined steps in order to diminish the effect of the planned dismissals.
Upon failure on the part of the employer to fulfil the above obligation ( i.e. to send the specified information envisaged in the LC), the trade union organisations’ representatives and the factory and office workers’ representatives shall have the right to alert the General Labour Inspectorate Executive Agency of a non-observance of labour legislation. In considering a failure to fulfil the obligation for information, account shall not be taken of any defence on the part of the employer on the ground that another entity has taken the decision regarding collective dismissals. Projected collective dismissals shall take effect not earlier than 30 days after notification of the National Employment Agency, without prejudice to the notice periods.
12. FORTHCOMING LEGISLATION
Further to the Republic of Bulgaria’s official joining of the European Union, considered as of 1 January 2007, national employment legislation will continue to transpose the relevant EU legal framework in order to complete the harmonisation and unification process.
13. USEFUL REFERENCES
National Assembly of the Republic of Bulgaria
Council of Ministers
The Ministry of Labour and Social Policy
National Employment Agency
Social Help Agency
General Labour Inspectorate Executive Agency
State Agency for Child Protection
Social and Investment Fund
Centre for Human Resource Development and Regional Initiatives
Social Services Against New Employment
Equal Opportunities for Women and Men
National Revenue Agency
National Social Security Institute
Information Employment Bulletin