Labour law in Bulgaria

1.1. The Employment Contract

The written form – 
precedent requirement

An employment contract must be in writing to be valid. In addition, if the written form is not observed, an administrative penalty could be imposed.

Registration of the contract

The employer is obliged to notify the relevant territorial directorate of the National Revenue Agency of the conclusion of the employment contract within three days of its conclusion. In the notification form, the employer must provide details of the essential elements of the contract (e.g. parties’ details, term of the contract, amount of remuneration, etc.). A copy of the registered notification must be handed over to the employee prior to the actual commencement of employment. Amendments in the essential elements of the employment contract also require notification of the National Revenue Agency.

Issues to be specified in the contract

The employment contract should contain the identification details of the parties and specify, as a minimum: (i) the place of work; (ii) the job title and nature of the work; (iii) the date of the contract’s conclusion and the starting date for performance of the contract; (iv) the duration of the employment contract; (v) the amount of basic and extended (if due) paid annual leave and the duration of additional paid annual leaves (if agreed); (vi) an equal notice period to be observed by both parties upon termination of the employment contract (for indefinite terms contract the notice period can be between 30 days and three months, and for fixed-term employment contracts three months but not more than the remainder of the contractual term); (vii) the amounts of basic and supplementary labour remunerations, as well as the periodicity of payment; (viii) the duration of the working day or week. For some of these elements (e.g. place of work, termination notice, paid leave), if nothing is agreed, mandatory statutory provisions will apply. Failure to observe the required content of the employment contract may result in financial sanctions

Term of the contract

An employment contract can be concluded for either an indefinite duration or for a fixed term. The employment contract is considered to be for an indefinite duration unless expressly agreed otherwise. 

Fixed-term contracts can be entered into only in the following cases:  

1. for a specific term –  as a general rule this can only be agreed upon for temporary, or seasonal or short-term activities of the employer, or with newly onboarded employees of companies that are under insolvency or liquidation proceedings. The term of this type of contract may not exceed three years;  
2. for completion of specific work – upon completion of the agreed work the employment contract shall be terminated; 
3. for replacement of an absent employee – upon return of the absent employee the employment contract shall be terminated. 

Fixed-term employment contracts for specific term automatically transform to indefinite term employment contracts if the employee continues working for five or more working days after the expiration of the agreed-upon contractual term, provided that the employer does not raise an objection in writing and the position is vacant. The same rule applies to fixed-term employment contracts for replacement of an absent employee if the employment contract with the replaced employee is terminated during the period of replacement. 

Probationary period

A probationary period of up to six months may be agreed upon in favour of the either or both parties to the employment contract. Where a fixed-term employment contract is entered into for a specific term that is less than one year, the probationary period may not exceed one month.

Choice of law

As a rule, the Bulgarian labour legislation applies to all employment contracts where the place of work is in Bulgaria, as well as for employment contracts that are entered into by Bulgarian employers. The parties to the employment contract are permitted to choose another governing law if there is an international element in the employment relationship. However, if the employee habitually performs his/her work from Bulgaria, such choice of law may not deprive the employee of the minimum protection granted by Bulgarian labour legislation

Jurisdiction, Court Instances

Labour disputes are heard by ordinary courts. Labour disputes are subject of three-instance court proceedings. The competent courts of first instance are the Regional Court where the headquarters of the employer are registered and the Regional Court where the employee habitually works. The court of second instance is the District Court and the court of third instance is the Supreme Court of Cassation. 

Remote working and hybrid models of work are permitted and regulated in Bulgaria.  

Under normal conditions, remote work is subject to mutual consent by the employer and the employee. In addition to the mandatory content of employment contracts, remote work also requires agreeing on some additional matters. Furthermore, implementing remote work requires adopting/updating some internal labour documents.  

The rights and obligations of the parties in the context of remote work are generally the same as those under regular employment contracts for work from the company’s premises. One specific feature is that the employer is explicitly obligated to procure at its own expense the consumables necessary for the functioning of the work equipment, as well as internet connectivity. The most common practice to fulfil these obligations is through providing a monthly allowance. 

The employer has generally the same health and safety obligations with respect to remote workplaces as with respect to the company's office premises. The employer is obliged to guarantee remote workplaces, which meet the minimal requirements for health and safety working conditions as envisaged by the Health and Safety at Work Act and the bylaws on its application. The employer is under the obligation to perform risk assessment of remote workplaces, taking into account the relevant regulations and the type of work of each respective employee. For avoidance of doubt, employers also have the same obligations in the event of an occupational accident at the remote workplace as they do for the workplace on the company's premises.  

For further information about regulations governing remote work in Bulgaria, please refer to our chapter in the CMS Expert Guide to remote working.

1.2. Service Agreements

General

Service agreements with natural persons are regulated by the Obligations and Contracts Act. 

The Civil Contract – a contract sui generis

The contract generally known as a “civil contract” is entered into with natural persons for performance of certain services. Civil contracts are not subject to the requirements of Bulgarian labour law.  Pursuant to the Bulgarian Labour Code, the relations on the provision of a labour force by natural persons shall be regulated only as employment relations. Therefore, civil contracts are permitted only where the contract does not regulate the provision of a labour force. The Bulgarian labour law control authorities have the power to reclassify a civil contract as an employment contract based on their sole assessment of the facts in the case. Where this happens the control authorities would declare the existence of an employment relationship, possibly with a back date

Managers and Executives

Under the Bulgarian Commerce Act, executives (i.e. the registered managing directors/executive directors) conclude management agreements, which are not employment contracts. The labour legislation does not apply to these contracts and the parties are more flexible upon negotiation of the terms and conditions regarding working time, annual leave, remunerations, termination, etc. However, the social security contributions under the management agreements are the same as under employment agreements.

1.3. Employment of foreigners

Right of residence

The requirements for issuing residence permits for European Union (EU) member state nationals are governed by the Act on the Entry into, Residence in and Departure from the Republic of Bulgaria of European Union Citizens Who Are Not Bulgarian Citizens, and Members of Their Families. The requirements for issuing residence permits for third-country nationals (individuals who are not citizens of an EU/EEA member state or Switzerland) are subject of the Foreigners in the Republic of Bulgaria Act.  

EU nationals may reside in Bulgaria for up to three months with their national passport. With respect to visa requirements, this will depend upon the country of the third-country national in order to stay in Bulgaria.  

Both EU and third-country nationals have the option of residing in Bulgaria for a longer period based on a prolonged, long-term or permanent residence permit. The statutory requirements and the application procedure for issuing such permits are much stricter and complicated for third-country nationals compared to for EU nationals. 

Work permits

Citizens of the EU may work in Bulgaria without a work permit. As a general rule, third-country nationals need permission for access to the labour market to legally work in Bulgaria. There are different forms of granting access to the labour market, such as: (i) unified residence and work permit; (ii) EU blue card; (iii) seasonal work permit; (iv) permit for intra-corporate transfer; (v) permit for employment of researchers, university students and interns; (vi) work permit. The appropriate type of document depends on the circumstances in the case.  

There are exemptions from the requirement to hold a relevant permission for access to the Bulgarian labour market. For example, there is no such requirements for: (i) third-county nationals with permanent residence in Bulgaria; (ii) family members of Bulgarian citizens; (iii) family members of EU, EEA and Switzerland citizens, etc. No work permit is necessary for business trips lasting up to three months. Instead, a simpler notification procedure shall be handled before the Bulgarian Employment Agency. 

2.1. Minimum Wage

Regulation by Law

The minimum wage is established by Council of Ministers Decrees. As of the beginning of 2023 the minimum wage in Bulgaria is BGN 780 (approximately EUR 400). 

Collective Agreement

Minimum wages can also be agreed upon by collective agreement. Provisions of collective agreements that are less favourable for the employee than those issued by law, or by another collective agreement that is binding on the employer, are null and void. 

2.2. Wage increase

Unilateral increase by the employer

As a rule, unilateral alterations to employment contracts are prohibited. However, the unilateral increase of wages by the employer is permitted by the law.  

Employees are entitled to a statutory additional remuneration for acquired length of service and professional experience. The minimum amount of this additional remuneration is 0.6% of the employee’s gross monthly salary for each year of experience in the company, as well as for each of year of preceding labour and professional experience on a relevant position. 

2.3. Reduction

Only by mutual consent

Reduction of the salary is permitted only on the basis of mutual consent between the employer and the employee.  

3.1. Working Time and Breaks

Standard daily and weekly working hours

The standard working week consists of 40 working hours. The standard daily duration of working time is eight hours. Where shift work applies, the duration of the shift may not exceed 12 hours.

Working time models

In addition to standard working time arrangements, specific working time models can be established, such as flexible working time, open-ended working hours, work in shifts, part-time work, on-duty, and on-call obligations. The working time distribution must be specified in the Internal Labour Regulations. 

The calculation of working time may be performed daily or over a period between one and four months, where a summarised calculation of working time is established.

Breaks are not included in working time. Employees are generally entitled to a break of at least 30 minutes daily to eat. In addition, the employer shall establish physiological regimes of work and rest in the Internal Labour Regulations. 

Daily and weekly rest periods

Employees are entitled to a daily rest period of at least 12 hours. In the conditions of five-day working week employees are entitled to a weekly rest period of at least two consecutive days. In principle, one of these rest days should be a Sunday. Under such circumstances, the weekly a rest period of at least 48 hours. Where summarised calculation of working time applies, the weekly rest period may not be less than 36 hours.

Night work

The normal duration of the weekly working time at night for a five-day working week is up to 35 hours. The normal duration of the working time at night for a five-day working week is up to seven hours per night.  

Night work is prohibited for: (i) employees who have not attained 18 years of age; (ii) pregnant female employees, as well as female employees in an advanced stage of in vitro treatment; (iii) mothers of children who have not attained the age of six years, as well as mothers who take care of children with disabilities irrespective of the age of the children, except with their written consent; (iv) occupational rehabilitee employees (usually these are employees holding a “handicap” designation), except with their own consent, and only when such work will not affect adversely their health according to a conclusion of the health authorities; (v) employees who pursue their studies without interruption of employment, except with their own consent. 

Premium for night work

For each night hour worked or part of a night hour, employees are paid additional labour remuneration in the amount of not less than 0.15% of the minimum wage, but not less than BGN 1.

Shift work

Shift work is permitted and regulated by law. Working time can be organised in two or more shifts. The rotation of shifts in the enterprise shall be determined by the Internal Labour Regulations and schedules approved by the employer. Employees may not work two consecutive shifts. 

Work on holidays 

Work on public holidays, regardless of whether this represents overtime work or not, shall be paid to not less than the double amount of their agreed labour remuneration. 

Each model of distribution and calculation of working time is subject to a more detailed set of rules.  

3.2. Maximum daily and weekly working time

Maximum daily and weekly working hours

As a rule, the standard daily duration of the working time is eight hours and if exceeded it will count as overtime work, unless open-ended working time applies.  

For production reasons, the employer may extend working time on some working days and compensate for it on other working days with a respective reduction. In such case, the maximum daily working time may not exceed ten hours and the maximum weekly working time may not exceed 48 hours. These limits are more restrictive for employees working under mandatory reduced working time. The extension is permissible for a period of up to 60 days per year, but not for more than 20 days consecutively. 

3.3. Overtime work

General

By definition, overtime work is work performed by an employee outside his/her working time on the order of, or with the knowledge of and without the objection of, the employer or the respective manager. Overtime work is prohibited in principle. In the private sector, overtime work generally is permitted only in the following cases: (i) for performance of emergency repair on working premises, of machinery or of other equipment; (ii) for completion of work that cannot be performed within the normal working time; (iii) for performance of intensive seasonal work.  

Restrictions

The maximum number of overtime hours permitted are: (i) up to 150 hours per calendar year; (ii) 30 hours of day work, or 20 hours of night work during one calendar month; (iii) six hours of day work, or four hours of night work during one calendar week; (iv) three hours of day work, or two hours of night work during two successive working days. 

Prohibitions

Overtime work is prohibited for (i) employees who have not attained the age of 18 years; (ii) pregnant female employees, as well as female employees in an advanced stage of in vitro treatment; (iii) mothers of children who have not attained the age of six years, as well as mothers who take care of children with disabilities irrespective of the age of the said children, except with their written consent; (iv) occupational rehabilitee employees, except with their consent, and only when such work will not affect adversely the health thereof according to a conclusion by the health authorities; (v) employees who pursue their studies without interruption of employment, except with their consent; (vi) employees who work under mandatory reduced working time (employees below the age of 18 years and employees working under specific health risks). 

Consideration of overtime work

Overtime work performed shall be paid with an increase agreed between the employee and the employer, but not less than: (i) 50% for work on working days; (ii) 75% for work on weekends; (iii) 100% for work on public holidays; (iv) 50% for work at working time calculated on a weekly or longer basis. 

4.1. Legal holiday entitlement 

Duration of leave

The amount of basic paid annual leave shall be not less than 20 working days. Longer annual leave can be agreed in the individual employment contract or in a collective agreement. 

Accrual

Employees who start work for the first time may use paid annual leave after acquiring at least four months' employment service. Employees whose working time is less than four hours a day are entitled to paid leave on a pro rata basis.  

Enhanced entitlement of paid leave 

Employees who work under specific conditions and life and health hazards that cannot be eliminated, restricted, or reduced regardless of the measures taken, as well as employees working under open-ended working hours, are entitled to not less than five working days additional paid leave.  

4.2. Entitlement to paid release from work

Personal release grounds

Employees are entitled to days of paid leave in the event of marriage, blood donation, death of a close family member, and for performance of specific public duties. There are specific leaves related to giving birth, adoption of children, childcare, etc., which are paid by the state social insurance. 

Trade Union Officers

For performance of trade union activities, the unsalaried members of national, industry, and territorial leaderships of trade union organisations, as well as the unsalaried chairpersons of the trade union leaderships in the enterprises, shall be entitled to paid leave of an amount established by the collective agreements, but not less than 25 hours per calendar year.  

Education leave

Employees are entitled to different types of paid education related leaves, such as: (i) employees, who attend secondary or a higher school without interruption of employment with the consent of the employer, shall be entitled to a paid leave of 25 working days for each year of study; (ii) employees, who attend secondary or a higher school without interruption of employment with the consent of the employer, are also be entitled to a one-time additional paid leave of 30 working days for preparation and sitting for a matriculation examination or a State final certification examination, including for preparation and defence of a thesis, graduation project or dissertation; (iii) where with the consent of the employer the employee applies for admission to a school requiring entrance examinations, he/she is entitled to paid leave, as follows: (i) where applying for admission to a secondary school: six working days; (ii) where applying for admission to a higher school or for enrolment in a doctoral degree course: 12 working days. There are other types of unpaid educational leaves.   

4.3. Forfeiture

Transfer into the next year

Unused paid leave to which the employee is entitled is transferred to subsequent years. Use of the paid annual leave may be explicitly postponed for the following calendar year by: (i) the employer – for important production reasons; (ii) the employee – by using an alternative type of leave or upon request with the consent of the employer.  

The right to use the paid annual leave shall be extinguished if it is not used within the expiration of two years after the end of the year when it was is due. If the paid annual leave was postponed, the right to use it shall expire upon the expiry of two years at the end of the year when the reason not to use it ceased to exist.  

Replacement of the leave

It is prohibited to compensate paid annual leave in cash, except upon termination of the employment relationship. 

General

In certain cases, employees are entitled to leave for temporary incapacity to work, such as sickness, occupational disease, occupational accident, quarantine, childcare, etc

Continued remuneration

The employer owes payment of compensation for the first three working days of temporary incapacity to work at the amount of 70% of employee’s salary. If the temporary incapacity to work continues for more than three working days, compensation shall be due by the state social insurance in compliance with the specific requirements of the Social Insurance Code and the bylaws on its application.  

Sick pay

Sick pay for temporary disability to work due to common disease shall be calculated at the rate of 80% (70% for the first three days), and sick pay for temporary disability caused by employment injury and occupational disease shall be calculated at the rate of 90%. The calculations are made on the average daily gross labour remuneration or the average daily contributory income on which social insurance contributions have been remitted or are due. The pay for the first three days of the temporary disability to work is due by the employer, and afterwards from the state social insurance.

Medical examination

Compensation for temporary incapacity to work requires presenting a medical certificate issued by the competent medical authorities.

General

The employment contract may be terminated by the employer only upon occurrence of specific exhaustive circumstances. Depending on the type of the circumstances, the termination might be subject to prior notice. The employee may terminate the employment contract without prior notice upon occurrence of specific circumstances, and with prior notice without any specific reason. 

The employment contract is terminated without either party being obligated to give notice to the other party in some specific cases, such as: (i) by mutual written consent of the parties; (ii) where a dismissal of the employee has been declared unlawful, or where the employee is reinstated to the previous work, but he/she fails to report to work with the deadlines specified by the law; (iii) upon expiry of the agreed upon term; (iv) by the completion of the agreed upon work; (v) upon return to work of the replaced employee, etc. 

6.1. Termination by the employer without notice:

Reasons

The employer may terminate the employment contract without prior notice upon occurrence of specific circumstances, such as: (i) the employee has been detained for execution of a sentence; (ii) the employee has been disqualified, by a sentence or according to an administrative procedure, from practicing a profession or from occupying the position to which he/she has been appointed; (iii) the employee is divested of the academic degree if the contract of employment has been concluded considering the degree awarded; (iv) the employee is dismissed by reason of breach of discipline.

6.2. Disciplinary dismissal by the employer

Work discipline and breach

Violation of labour discipline could result in imposing disciplinary sanctions by the employer. The disciplinary sanctions available to the employer include: (i) reprimand, (ii) warning for dismissal, and (iii) disciplinary dismissal. 

Dismissal reasons

Disciplinary dismissal is the most severe disciplinary sanction, which can be imposed by the employer under the circumstances of grave violation of work discipline. It is a form of immediate termination of employment without notice. The Bulgarian Labour Code provides an exemplary list of disciplinary violations, which could result in a disciplinary dismissal: (i) reporting for work late or leaving early on three occasions, each of not less than one hour, within one calendar month; (ii) being absent from work in the course of two consecutive working days; (iii) systematic breaches of work discipline; (iv) abusing the employer's confidence or disclosing data, which the employer considers confidential; (v) inflicting detriment on members of the public in distributive trade and services through overcharging, short weighting, or supplying goods or services of quality inferior to the stated quality; (vi) participation in betting games through telecommunication facilities of the company. Other grave breaches of work discipline could also justify disciplinary dismissals. 

Proceeding 

Imposing any disciplinary sanction is subject to compliance with the specific proceedings of the Bulgarian Labour Code. In brief, these are: (i) disciplinary sanctions shall be imposed by the employer or by a specifically empowered official with managerial functions; (ii) prior to imposing a disciplinary sanction, the employer shall give the employee a hearing or shall accept his/her written explanations and shall gather and assess the specified evidence; (iii) disciplinary sanctions shall be imposed within two months after detection of the breach and not later than one year after the commission thereof (whichever comes first); (iv) upon 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 worker or employee; (v) the disciplinary sanction shall be imposed by a reasoned order in writing, which shall specify the identity of the employee, the breach and the date of commission thereof, the sanction and the provision of the law pursuant to which the sanction is imposed; (vi) 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 employee by registered mail with notice of delivery. 

6.3. Termination by the employer with notice

The employer may terminate the employment contract with prior notice upon occurrence of specific circumstances, such as: (i) upon closure of the company; (ii) upon closure of a separate unit of the company; (iii) upon downsizing of personnel; (iv) upon reduction in the volume of work; (v) upon stoppage of operations for more than 15 working days; (vi) where the employee lacks the capacity for efficient execution of the work; (vii) where the employee does not possess the educational level or professional qualification required for the work executed; (viii) upon refusal of the employee to follow the company or a division thereof, in which the employee works, when they relocate to another settlement or locality; (ix) where the position occupied by the employee must be vacated for reinstatement of an unlawfully dismissed employee, who previously occupied the same position; (x) upon acquiring right to retirement pension by the employee; (xi) upon change of the requirements for execution of the position, if the employee does not satisfy the said requirements; (xii) when performance of the employment contract is objectively impossible. 

Proceeding

Written notice of the termination of an employment contract must be served to the employee. There are specific requirements to the content of the termination notice depending on the specific legal ground for the termination. The employer shall observe the notice period of termination, which has been agreed upon in the employment contract. If the notice period is not observed by either party, compensation of the amount of the employee’s gross salary for the unobserved (part of the) notice period shall be due. Upon expiration of the notice period (or upon earlier termination, if the notice period is not observed), the employer shall issue a termination order declaring the termination. For some termination grounds (e.g. downsizing of personnel), the employer may need to perform selection prior to dismissals (if some employees with the same or similar positions are being terminated and others are not).    

Temporary contracts

Fixed-term contracts may be terminated on the legal grounds applicable for termination of indefinite term contracts. The notice period for termination shall be three months, but no more than the remainder of the contractual period.  

6.4. Termination by the employee with notice 

General

The employee may terminate the employment contract with prior notice without need to specify reasons.  

Proceeding

The termination notice must be in writing. If the notice period is not observed, the employee will owe compensation at the amount of the employee gross salary for the unobserved (part of the) notice period. The employer may also decide to terminate the contract prior to expiration of the notice period. Where this is the case, the employer will owe the same compensation. Upon expiration of the notice period (or upon earlier termination, if the notice period is not observed), the employer shall issue a termination order declaring the termination. 

Temporary contracts

Fixed-term contracts may be terminated on the legal grounds applicable for termination of indefinite term contracts. The notice period for termination shall be three months, but no more than the remainder of the contractual period. 

6.5. Termination by the employee without notice

General

The employee may terminate the employment contract with prior notice under specific circumstances.  

Reasons

Specific circumstances could entitle the employee to terminate the employment contract without prior notice, including but not limited to: (i) the employee is unable to execute the work assigned thereto by reason of illness and the employer fails to provide the worker with another suitable work conforming to the prescription of the health authorities; (ii) the employer delays the payment of the labour remuneration or a benefit or social insurance; (iii) the employer changes the place or nature of work or the agreed upon labour remuneration, except in cases where the employer has the right to make such changes, as well as where the employer fails to fulfil other obligations to the employee; (iv) the employee pursues his/her studies as a full-time student at an educational establishment, or enrols in a full-time doctoral degree course; (v) the employee works under a fixed-term employment contract for a specific period or for replacement of an absent employee and the employee starts to another work for an indefinite duration; (vi) the employer has granted unpaid leave to the employee without prior consent; (vii) the employee has acquired right to pension for social insurance length of service and age, etc. 

Proceeding 

The termination shall be done in writing. The employer shall issue a termination order declaring the fact of the termination. 

6.6. Protection of the employee of termination

Protected groups of employees

The following categories of employees enjoy protection against dismissal on some legal grounds: (i) mothers of children under the age of three years; (ii) occupational rehabilitees; (iii) employees suffering from a specific disease determined by ordinance of the Minister of Health; (iv) employees who have commenced the use of any permitted leave; (v) employees who have been elected as employee representatives, for the time they are in such capacity; (vi) employees who have been elected as employee representatives on health and safety at work; (vii) employees who are members of a special negotiating body, a European Works Council or a representative body in a European Company or a European Cooperative Society, for the duration of the performance of the functions thereof. 

Trade union officers

Employees enjoy protection against dismissal if they are members of the trade union leadership at the enterprise, a territorial, industrial, or national elective trade union governing body during the time of occupation of the relevant trade union position and within six months after the said worker vacates this office. 

Collective agreement

Additional protection could be agreed upon by a collective agreement. 

Childbirth and Pregnancy

The following categories of employees enjoy protection against dismissal in relation to childbirth and childcare: (i) pregnant female employees; (ii) female employees in an advanced stage of in vitro treatment; (iii) employees who use some specific parental leaves related to childbirth and during the first year of childcare. 

6.7. Protection against illegal termination of employment

Extrajudicial Proceeding 

Employees are entitled to contest the legality of the dismissal before the employer and to claim: (i) that the dismissal be pronounced unlawful and be revoked; (ii) to be reinstated to work; (iii) to be paid compensation for the period of unemployment due to the dismissal; (iv) correction of the grounds for the dismissal, as entered in the employees record book or in other documents. The employer, acting on its own initiative, may revoke the order of dismissal before the employee brings legal action before the court. After legal action has been brought before the court but before the judgment of court has entered into effect, the employer may revoke the order of dismissal with the written consent of the employee. 

Judicial assertion

An employee is entitled to contest the legality of the dismissal before the court and to claim: (i) that the dismissal be pronounced unlawful and be revoked; (ii) that the employee be reinstated to work; (iii) that the employee be paid compensation for the period of unemployment due to the dismissal; (iv) that the employee’s grounds for dismissal be corrected in the employee record book or in other documents. 

6.8. Mass redundancy

Definition

Mass redundancies are terminations by the employer for reasons not related to the employees when the number of employment contracts terminated within 30 days are: (i) at least ten in an enterprise where usually more than 20 and less than 100 employees are engaged; (ii) at least 10% of the employees in an enterprise where usually more than 100 and less than 300 employees are engaged; (iii) at least 30 in an enterprise where usually more than 300 employees are engaged.

Reporting requirement

The employer must provide certain information and documents and perform prior consultations with (i) the employees’ representatives and/or trade unions, and (ii) the State Employment Agency Employers. There are specific timelines for these consultations. 

Measures in case of mass termination

The purpose of the consultations with employee representatives (i.e. trade unions) is to reach an agreement with the employees to avoid or limit mass redundancies and to mitigate their consequences. The results of the consultations are formed in an agreement/protocol.  

The aim of the procedure before the State Employment Agency is to prepare projects for the necessary measures aimed at: employment mediation; adult education; starting an independent business activity; employment programmes. 

6.9. Termination of the contract by the employer on payment of compensation

General

Termination of the contract by the employer on payment of compensation is available based on mutual consent.  

Proceeding

The employer could propose termination of the employment contract based on mutual agreement with payment of compensation. The amount of the compensation proposed should be not less than four gross labour remunerations of the employee. For termination based on mutual agreement, the consent of the employee is necessary. Where the consent is not given within seven days of the proposal, the latter shall be deemed rejected. The proposal and its acceptance shall be made in writing.  

6.10. Compensation

In case of illegal termination by the employer

An employee may claim compensation for the time during which he/she remained unemployed due to unlawful dismissal, but for no more than six months. If the employee begins work for lower pay during this period, the employee shall be entitled to claim the difference between the salaries. 

Automatic transfer of the employment

The employment relationship with the employee shall not be terminated in the event of a change of employer as a result of: (i) merger of companies by the formation of a new enterprise; (ii) merger by acquisition of one company by another; (iii) distribution of the operations of one company among two or more enterprises; (iv) transfer of a specific part of one company to another; (v) change of the legal form of business organisation; (vi) change of the ownership of the enterprise or of a separate part thereof; (vii) cession or transfer of activity from one enterprise to another, including transfer of tangible assets; (viii) upon change of the employer in the case of rental or lease of the enterprise or a self-contained part thereof.

Notice

Before carrying out a change resulting in automatic transfer of employment, the old and the new employer shall be obligated to inform the trade union representatives and the employee representatives at the enterprise thereof of: (i) the projected change and the date of carrying out the said change; (ii) the reasons for the change; (iii) the possible legal, economic and social implications of the change for the employees; (iv) the measures envisaged in relation to the employees.

Liability

Liability for the obligations to employees arising before the change of employer shall be borne by: (i) the transferee, upon merger of companies and upon change of the form of legal organisation; (ii) jointly and severally by the transferor and the transferee employer in the remainder of the cases. 

8.1. Trade unions and corporate management

Corporations

Employees shall participate, through representatives elected by the General Meeting of employees, in the discussion of and the addressing of enterprise management issues only in the cases provided for by law.  

There are two types of employee representatives: (i) in all companies the employees may elect representatives at the General Assembly who shall represent their common interests on issues of industrial and social-security relations before the employers or before State bodies; (ii) in companies employing at least 50 employees, as well as in organisationally and economically separate divisions of companies employing at least 20 workers and employees, the General Assembly shall elect from among its composition employee representatives for exercising the right to information and consultation on certain specific topics. Different matters are consulted with each of these two categories of representatives.  

Employees are entitled, with no prior permission, to freely form, by their own choice, trade union organisations and to join and leave them on a voluntary basis, showing consideration for their statutes only. 

Informational and consultancy rights

Employees have various rights to be informed and consulted in relation to different operational and managerial issues, such as: (i) planned mass redundancies; (ii) company transfers; (iii) change of the scope of activity; (iv) changes in the financial status of the company; and (v) changes in the employment organisation; (vi) preparation of the Internal Labour Regulations of the employer.

8.2. Strike and lock out

General

Employees have a constitutional right to strike for the protection of the collective economic and social interests thereof. This right shall be exercised under terms and according to a procedure established by a separate law. 

Effective strike

When an agreement is not reached on a collective labour dispute, if mediation and/or voluntary arbitration have been sought, or the employer does not fulfil the obligations undertaken, the employees can strike by temporarily interrupting the fulfilment of their duties. The decision for declaring a strike shall be taken by simple majority of the employees in the respective company or division. The employees or their representative shall be obliged to inform the employer in writing at least seven days before the beginning of the strike, state its duration and identify the body who will lead the strike. The employees can, without prior notice, declare a warning strike, which cannot exceed one hour. 

Legal protection

The employer, as well as employees who do not participate in the strike, can bring a claim before the court for establishing the unlawfulness of a declared, commenced or concluded strike. The claim shall be lodged before the District Court at the headquarters of the employer.

Lockout

Upon declaring a strike and for the duration of a legal strike the employer cannot suspend the activity of the enterprise or a part of it and dismiss employees for the purpose of: (i) preventing or stopping the strike; (ii) frustrating the granting of the claims laid. 

Prohibition to strike for certain groups of employees

Strikes are prohibited in the system of the Ministry of Defence; the Ministry of Interior; judicial, prosecution and investigation bodies; the State Intelligence Agency; and the National Protection Service.

Since participation in a strike is voluntary, the participating employees are not entitled to labour remuneration for the time during which, due to participation in a strike, they have suspended the performance of labour duties. Furthermore, throughout the strike, employees cannot prevent others to perform their work duties.  

In case the statutory requirements with respect to organising a strike have been complied with, the time during which work has been suspended would count as working time. For avoidance of doubt, those participating in a lawful (effective) strike would not be subject to any disciplinary or financial sanctions.  

8.3. Staff representatives and release from work

General

Employment and social security matters can be regulated by collective agreement so far as these are matters not regulated by mandatory provisions of the law. The collective agreement may not contain clauses, which are less favourable to the employees than the provisions of the law or of a collective agreement that is binding on the employer. Collective agreements may be concluded at the company, municipal and industry level. A collective agreement must be made in writing and entered in the register of the regional directorate of the labour inspection. 

Continued remuneration

The National Council for Tripartite Cooperation is the acting body for implementation of social dialogue at a national level. Representative organisations of employers, employees and the government participate in the work of the Council. Councils for tripartite cooperation are implemented by industry, branch, regional and municipal councils for tripartite cooperation.  

8.4. Material costs

Assistance to trade unions through the state authority and the employers

The Labour Code provides assistance to trade unions through state authorities and employers. Assistance is given in the form of the provision of real property and other assets.

8.5. Collective agreement

General

Employment and social security matters can be regulated by collective agreement so far as these are matters not regulated by the law.  However, collective agreement provisions may not be less favourable than legal provisions. Collective agreements may be concluded at company, municipal and industry level. A collective agreement must be made in writing and entered in the register of the Regional Employment Inspection. 

Tripartite Cooperation

The National Council for Tripartite Cooperation is the acting body for implementation of social dialogue at a national level. Representative organisations of employers, employees and the government participate in the work of the Council. Councils for tripartite cooperation are composed at a municipal and industry level. The National Council is responsible for facilitating discussion and consulting on draft ordinances and laws relating to Bulgarian employment and social security.

9.1. Individual disputes

General

Labour disputes are disputes between an employee and an employer regarding the formation, existence, performance and termination of employment relationships, as well as the disputes over the performance of collective agreements and the ascertainment of length of employment service. 

9.2. Collective disputes

General

The procedure for the settlement of collective disputes is regulated by the Settlement of Collective Employment Disputes Act. 

Negotiations 

The guiding principle is to conduct negotiations to settle disputes by mutual agreement. 

Mediation

If negotiations fail, parties may ask the National Institute for Settlement and Arbitration for assistance in the form of mediation. The National Institute for Settlement and Arbitration is a legal entity organised by the Ministry of Employment and Social policy. Other institutions are also authorised to undertake this service but they are not expressly mentioned in the law as providers of mediation in collective disputes.

Arbitral court

If mediation fails, the parties may agree on a hearing before: (1) an arbitral court; or (2) a single arbitrator. Arbitrators and members of the arbitral court are persons registered by the National Institute for Settlement and Arbitration. 

General

The Bulgarian state social and health security system consists of: (i) health insurance (which is comprised of compulsory state organised and voluntary private funds); (ii) state social insurance (which grants compensation, assistance and pensions in case of temporary inability to work, temporary reduced ability to work, invalidity, maternity, unemployment, old age, and death); (iii) additional compulsory pension insurance; and (iv) additional voluntary pension insurance. The National Insurance Institute and the National Health Insurance Fund are the social insurance providers. Social security contributions are levied by the National Revenue Agency.

Contributions, Percentage rates

The minimum and the maximum basis for contributions, rates, the level of compensation and assistance for insured events are determined annually. The maximal social insurance basis for 2023 is BGN 3,400 (approximately EUR 1,738). The contribution for state health insurance is 8 % of the gross salary. The other social contributions vary between ca. 23% and ca. 27%, depending on the category of employment. The categories of employment are regulated in the Social Insurance Code and depend on the challenge and level of danger inherent in the employment, the insured risks and the age of the insured person. The health and social security contributions are split between the employer and the employee. The employee’s part is withheld from his/her salary and is paid directly by the employer. 

Pension

Entitlement to a pension is acquired upon fulfilling age and length of contributory service thresholds, which are currently undergoing an increase. As of 31 December 2016, the retirement age shall be increased, from the first day of each subsequent calendar year until 2037. For the period 2023 -2027, the required age and length of contributory service are as follows:

Unemployment

Entitlement to unemployment compensation apply to persons for whom social insurance contributions have been paid or are due for at least 12 twelve months during the last 18 months preceding the termination, and who: (i) are registered as unemployed with the National Employment Agency; (ii) are not granted contributory-service and retirement-age pension; (iii) do not perform work for which they are subject to compulsory social insurance.  

The unemployment compensation is 60% of the average daily wage or the average daily contributory income of the employee. Maximum and minimum daily amounts of compensation are set – for 2023, the minimum amount is BGN 18 (approximately EUR 9) and the maximum amount is BGN 85.71 (approximately EUR 44). The period of entitlement to unemployment compensation generally depends on the acquired contributory service: 

Some grounds for termination of unemployment compensation, such as disciplinary dismissal and mutual agreement, result in payment of the minimum compensation for the minimum period regardless of other factors.

Maternity

Female employees are entitled to 410 days paid maternity leave, which commences 45 days prior to the child’s due date. During this period, the employee will receive monthly compensation from the state social insurance amounting to 90% of social security income, calculated on the basis of the instalments paid for the last 24 months. In addition, for the period between the expiration of the 410 days and the child reaching the age of two years, the employee is entitled to monthly compensation, paid by social security in the amount of the minimal monthly salary. This leave can be transferred after the child attains six months to the father or grandparents. 

After the maternity leave of 410 days, employees may use additional childcare leave for the period until the child becomes two years of age. For the period of this leave, the employee will receive compensation from the state social insurance, currently amounting to BGN 710 (approximately EUR 363) per month.