The General Assembly of the Civil Division of the Bulgarian Supreme Court of Cassation (SCC) has adopted two interpretative rulings of significant importance to employers and employees. Interpretative Ruling No. 3/2024 of 23 February 2026 clarified the starting point of the limitation period for compensation claims following an unlawful dismissal under the Labour Code (LC), and Interpretative Ruling No. 1/2023 of 5 March 2026 addressed whether social insurance benefits or pensions should be deducted from non-pecuniary damages awarded under the LC in connection with occupational accidents or occupational diseases.
These rulings are binding on all courts and public authorities in Bulgaria and resolve longstanding contradictions in SCC case-law.
Interpretative Ruling No. 3/2024 – limitation period for unlawful dismissal compensation claims
The issue and ruling
The SCC addressed the question whether the limitation period for a compensation claim for unlawful dismissal begins on the day of the dismissal or the day the court judgment recognising the dismissal as unlawful enters into force. The SCC held that the limitation period begins to run on the day of the employment-relationship termination.
The court reasoned that the claim for declaring a dismissal unlawful is a constitutive claim with retroactive effect, meaning the dismissal is deemed unlawful from the moment it went into effect, not from the date the judgment enters into force. The compensation claim is a single claim for a period of up to six months (not a periodic payment), and it becomes enforceable from the moment of the employer's breach (i.e. the day of termination).
Interpretative Ruling No. 1/2023 – deduction of social insurance benefits from non-pecuniary damages
The issue and ruling
The question was whether, when awarding compensation for non-pecuniary damages under the LC (i.e. the employer's strict liability for occupational accidents and occupational diseases), the court must deduct social insurance benefits or pensions received by the injured person. The SCC held that such benefits should not be deducted from non-pecuniary damages.
The court reasoned that pecuniary and non-pecuniary damages are distinct categories of harm. Social insurance payments compensate the worker for their inability to earn income (i.e. they overlap with lost profits, a type of pecuniary damage) and not with non-pecuniary harm such as pain and suffering. The relevant provision is aimed at preventing double recovery for the same type of harm, not at establishing a formula for a single composite award.
Practical implications for employers
Regarding Interpretative Ruling No. 3/2024, the three-year limitation period for compensation claims for unlawful dismissal now runs from the date of termination, not from the date the court declares the dismissal unlawful. From an employer's perspective, this ruling may serve as a useful defence. Where former employees delay filing their compensation claims, employers will be able to raise a limitation defence more readily since the clock starts ticking from the date of dismissal.
Regarding Interpretative Ruling No. 1/2023, social insurance payments may only be deducted from the pecuniary-damages component of the employer's liability, not from non-pecuniary damages. This may increase total compensation exposure for employers in occupational accident and occupational disease cases. Employers should review their risk management and insurance arrangements.
For more information on these decisions and employment law in Bulgaria, contact your CMS client partner or the CMS experts who contributed to this article.
