Sources of
regulation
Since the transition period started in 1989, the
legal regulation of termination of employment in Bulgaria has undergone numerous
changes. They are mainly geared towards adhering to European Union and ILO
standards.
The main source of the labour legislation in
Bulgaria is the Labour Code, which was originally adopted in 1986 and
subsequently amended several times, and most recently in 2005 (“LC”).
Termination of employment provisions are also
dealt with in collective agreements and individual labour contracts.
Bulgaria has ratified the European Social Charter,
revised in 1996, and is bound by its Article 24 on the right to legal
defense in dismissal.
Scope of
legislation
The LC regulates the labour relationships between
the employee and the employer, as well as other relationships immediately
related to them (art. 1(1), LC). It also aims to ensure the freedom and
protection of labour, equitable and dignified working conditions, as well as the
conducting of social dialogue between the State, the employees, the employers
and their organizations, for the purposes of settlement of labour relations and
other immediately related relations. (art. 1(3), LC).
The LC applies to all employment relationships
with Bulgarian enterprises and joint ventures in Bulgaria. It also covers
employment relationships between Bulgarian citizens and foreign enterprises in
Bulgaria, as well as Bulgarian enterprises abroad, insofar as not provided
otherwise in a law or a treaty to which the Bulgaria is a party (art. 10(1),
LC). Moreover, the employment relationships of Bulgarian citizens sent to work
abroad in foreign enterprises or joint ventures, and of foreign nationals
appointed to work in Bulgarian enterprises or joint ventures are regulated by
the LC, insofar as not provided otherwise for in a law or a treaty to which
Bulgaria is a party (art. 10(2), LC).
Contracts of
employment
The employment contract must contain information
that defines, among other things, the equal term of notice for both parties in
cases of termination of the labour contract (art. 66(1), LC). The
employment contract must be concluded in writing (art. 62(1)), LC).
However, employment relations can also arise where no employment contract
concluded in writing is available, but the employer has admitted the employee to
work, and he/she has commenced the performance of such work. In such cases, the
existence of employment relations may be ascertained by all means of evidence (art.
62(2)), LC).
The employment contracts may be concluded for an
indefinite period or for a fixed term (art. 67(1), LC). The employment
contract is considered concluded for an indefinite period, unless expressly
agreed otherwise (art. 67(2), LC). However, an employment contract
concluded for an indefinite period may not be transformed into a contract for a
fixed term, except where explicitly desired by the employee, and stated so in
writing. (art. 67(3), LC).
A fixed term contract may be concluded for:
a definite period, which
cannot be longer than 3 years, unless legislation provides otherwise;
completion of some
specified work;
substitution for an
employee who is absent from work;
completion of a job which
is to be taken through a competitive examination; and
a certain specified
mandate (art. 68, LC).
Yet, as an exception, a fixed term employment
contract may be concluded for a period of not less than one year and for works
and activities that are not of temporary, seasonal or short-term nature. Such an
employment contract may also be concluded for a shorter period upon request, in
writing, by the employee (art. 68(3), LC).
Moreover, the employment contract concluded for a
fixed term is transformed into a contract for an indefinite period, if the
employee continues working for 5 or more working days after the expiry of the
agreed period, without the written objection of the employer, provided the job
is vacant (art. 69, LC).
Termination of
employment
A contract of employment may be terminated,
without notice due, from either party in the following cases:
By mutual consent of the
parties, expressed in writing within 7 days of receipt of the proposal.
Failure to do so will be deemed refusal to accept the proposal;
When the dismissal of an
employee is found unlawful, or he/she is reinstated to his/her previous job
by ruling of the court, but does not report to work within the legal term;
Upon expiry of the
contractual term;
Until the completion of
some specified work;
When a position is
formerly occupied by a pregnant employee or an employee reassigned for
rehabilitation, and the employee entitled to that position returns;
In case of inability of
the employee to perform the assigned job because of illness resulting in
permanent disability, or because of health considerations established by an
expert medical commission. In such a case, the contract of employment is not
terminated if the employer can provide another job, suitable to the
employee's health status, and he/she consents to perform it;
Upon the death of the
person with whom the employee has concluded a contract of employment with
consideration of his/her personality;
Upon the death of the
employee; and
When a position is listed
to be occupied by a State employee. (art. 325, LC).
An employee may terminate his/her employment
contract in writing (without notice), in the following circumstances:
When he/she is unable to
perform the assigned job because of illness, and the employer fails to
provide him/her with suitable work as per the prescription of the medical
authorities;
When the employer delays
the payment of remuneration or compensation pursuant to the LC or for social
security;
When the employer changes
the place or character of work or the agreed remuneration, except in cases
where the employer is entitled to make such changes, and also when he/she
fails to meet other obligations, stipulated in the employment contract;
When he/she assumes a paid
elected office or begins researching work on the basis of a competitive
examination;
When he/she is enlisted
for regular military service. Should an employee, called up for military
service, be postponed or released from regular military service, such
employee can at request that his/her contract of employment be considered
not terminated if within 1 month of the release, but not later than 3 months
after leaving work, and he/she can report back to work;
When he/she continues
his/her education as a regular student at an educational establishment, or
as a Ph.D. student;
When he/she is employed as
a substitute for an absent employee and take up employment elsewhere under a
contract of employment for an indefinite term;
When he/she is reinstated
in the established manner to work as a result of finding his/her dismissal
unlawful, in order to perform the work to which he/she is reinstated; and
When he/she becomes a
State employee. (art. 327), LC)
The employment relationship with the employee will
not be considered terminated in case of:
Merger of enterprises;
Joining of one enterprise
with another;
Distribution of the
operations of one enterprise between several enterprises;
Transfer of an autonomous
part of one enterprise to another;
Change of the owner of the
enterprise or of an autonomous part thereof; and
Delivery of the enterprise
or an autonomous part thereof for rent, or lease or under concession (art.
123(1), LC).
An employment relationship resulting from an
election will be terminated upon expiry of the term for which the person has
been elected. Should no new election be provided upon expiry of the term, the
employment relationship will be extended until such election is held (art.
337, LC).
Dismissal
An employer may dismiss an employee for
disciplinary reasons, such as :
Reporting to work late or
early departure on three occasions, each no less than one hour, within one
calendar month;
Absence from work for two
consecutive working days;
Systematic violations of
the work discipline;
Abuse of employer's
confidence or divulging proprietary information of the employer;
Causing losses to other
persons by employees in the trade and services industries by fraud in the
price, the weight, the quality of the item or service;
Participation in gambling
through telecommunication means of the enterprise and the costs incurred
will be reimbursed in their full amount; and
Other grave violations of
the work discipline (art. 190, LC).
An employer may terminate a contract of employment
by giving a notice in writing to the employee in the following cases:
Closing down of the
enterprise;
Partial closing down of
the enterprise or staff cuts;
Reduction of the volume of
work;
Work stoppage for more
than 15 work days;
When an employee lacks the
qualities for efficient work performance;
When an employee does not
have the necessary education or vocational training for the assigned work;
When an employee refuses
to follow an enterprise or a division thereof, in which he/she is employed,
when it is relocated to another community or locality;
When the position occupied
by the employee must be vacated for reinstatement of an unlawfully dismissed
employee, who had previously occupied the same position;
When a former employee,
who has been released ahead of schedule or postponed from regular military
service, returns to his/her former position;
When an employee has
become eligible for retirement for length of service covered by social
security and age;
When the requirements for
the job have been changed and the employee does not qualify for such
position; and
When it is objectively
impossible to implement the contract of employment (art. 328(1),
LC).
In addition, enterprise management employees may
be dismissed by advance notice and by reason of conclusion of an enterprise
management contract. The dismissal may be effected after the start of the
management contract, but not later than 9 months (art. 328(2), LC).
An employer may terminate an employment contract,
without notice, when:
an employee has been
detained for execution of a sentence (art. 330(1), LC);
an employee has been
divested by sentence of the court or by an administrative order of the right
to practice a profession or to occupy the position to which he/she has been
appointed;
an employee is divested of
his/her academic title or academic degree, if the contract of employment has
been concluded in view of his/her holding the respective title or degree;
an employee refuses to
take a suitable job offered to him/her in case of medically prescribed
reassignment; and
an employee has been
subject to disciplinary dismissal (art. 330(2), LC).
An employer may also propose to terminate an
employment contract, but only in return for an agreed compensation with the
employee. However, where the employee fails to state his/her position on the
proposal in writing within 7 days, the proposal will be deemed not accepted (art.
331(1), LC). If the employee accepts the proposal, the employer must owe
such employee compensation to the amount of not less than four times the last
gross labour remuneration of the employee, unless the parties have agreed a
higher amount of compensation (art. 331(2), LC). Yet, where the
compensation has not been paid within one month following the date of
termination of the employment contract, the grounds for payment will be deemed
invalid (art. 331(3), LC).
The LC does contain a general anti-discrimination
provision, which prevents an employer from practicing direct and indirect
discrimination, based on nationality, origin, gender, sexual orientation, race,
colour of skin, age, political and religious believes, membership in syndicate
and other social organizations and movements, family and material situation,
existence of psychic or physical disorders, as well as differences in the
contract term and duration of working time (art. 8(3), LC).
Notice and prior
procedural safeguards
The employment contract must contain information
on the notice period for its termination which must be equal for both parties (art.
66(1), LC).
An employee may terminate a contract of employment
by giving the employer a notice in writing (art. 326(1), LC). The
notice period for termination of an employment contract of indefinite duration
is 30 days, unless a longer period has been agreed by the parties, however, this
notice period cannot be for longer than 3 months. The notice period for
termination of a fixed-term employment contract is 3 months, but not more than
the remaining period of the contract (art. 326(2), LC). This notice
period begins on the day following receipt of the notice. A notice is considered
withdrawn upon the employee's request to do so before or at the time of its
receipt. With the consent of the employer, a notice may be withdrawn before the
period has expired (art. 326(4), LC).
In case of partial closing down of an enterprise,
as well as in case of staff cuts or reduction of the volume of work, the
employer is allowed, in the interest of production or business, to selectively
dismiss employees whose positions have not been made redundant, in order to
retain employees of higher qualifications and better performance (art. 329,
LC). While planning to make such structural changes to the enterprise, the
employer must, at least two months prior to putting into effect these changes,
notify the employees about the:
Anticipated changes and
the date of their effect;
Reasons for the changes;
Eventual legal, economic
and social consequences of the changes for the employees; and
Measures planned in
respect of the employees (art. 123(4), LC).
The employer must also lay efforts to reach an
agreement with the representatives of the trade unions and with representatives
of the workers and employees regarding the consequences of possible changes (art.
123(6), LC).
Where the employer intends to undertake collective
redundancy, he/she is obliged to undertake consultations with the worker and
employee representatives not later than 45 days before the redundancy act, and
to lay efforts for achieving an agreement in order to avoid or limit the
collective redundancy and to relieve its consequences (art. 130(a)(1),
LC). The employer must also provide information in writing to the workers and
employees' representatives about the:
Reasons for the
forthcoming redundancy;
Number of the workers and
employees, who will be dismissed and the basic economic activities,
qualification groups and professions to which they refer;
Number of positions
occupied by the basic economic activities, qualification groups, and
professions in the enterprise;
Envisaged criteria for
selection of the workers and employees, who will be dismissed; and
Time, during which the
redundancy will be done (art. 130(a)(2), LC).
In accordance with provisions of the LC, an
employer may dismiss only with prior consent of the labour inspectorate for each
specific case:
Employees who are mothers
of children younger than 3 years of age, or spouses of persons who have
entered their regular military service;
Employees who have been
reassigned due to reasons of health (opinion of an expert medical commission
must be considered);
Employees suffering from
certain diseases, listed in a Regulation of the Minister of Health (opinion
of an expert medical commission must be considered); and
Employees who have
commenced a period of permitted leave (art. 333(1), LC).
In cases of partial closing down of the enterprise
or staff cuts; reduction of the volume of work; where an employee lacks the
qualities for efficient work performance; where the requirements for the job
have been changed and the employee no longer qualifies; or where the employee
has been subject to disciplinary dismissal, an employer may dismiss an employee
who is a member of the enterprise trade union leadership belonging to a
territorial, industrial or national elected trade union body, throughout the
period of occupation of the trade union position and not earlier than 6 months.
After that period the employee can only be dismissed with prior consent of the
trade union body, specified by decision of the central leadership of the
respective trade union organization (art. 333(3), LC). Moreover, if
provided for in the collective agreement, an employer may dismiss an employee
due to staff cuts or reduction of the volume of work after obtaining a prior
consent from the respective trade union body of the enterprise (art. 333(4),
LC).
A pregnant employee may be dismissed with a given
notice, only when:
the enterprise is closing
down;
the employee refuses to
follow the re-location of an enterprise or division;
under certain
circumstances, a former employee returns to the currently occupied position;
and
it is objectively
impossible to implement the contract of employment.
The employer may dismiss the pregnant employee
without given notice, where the employee has been detained for execution of
sentence and in cases of disciplinary dismissal. However, the discharge may come
into effect only after preliminary permission, given by the inspection on
labour. Moreover, a female employee who uses leave for pregnancy and childbirth
may be dismissed only pursuant to the closing down of the enterprise (art.
333(5), LC).
Parties are entitled to compensation if there is a
failure to provide notice by the other party entitled to such notice. The party
entitled to terminate the labour relationship with notice, as well as the party
which has received notice of termination of the employment, may terminate it
before the expiration of the notice period. The terminating party then owes the
other party compensation equal to the amount of the employee's gross labour
remuneration for the remainder of the notice period (art. 220, LC). In
cases where the employment relationship is terminated by an employee without
notice, the employer will owe compensation to the extent of the gross labour
remuneration for the notice period in case of an employment contract for an
indefinite period; and to the amount of the real damages in case of an
employment contract for a fixed term (art. 221(1), LC). In the case of
disciplinary dismissal, the employee will owe the employer compensation to the
extent of his/her gross labour remuneration for the notice period in case of an
employment contract for an indefinite period; and to the amount of the real
damages in case of an employment contract for a fixed term (art. 221(2),
LC).
As a procedural safeguard, prior to imposing a
disciplinary sanction, the employer must hear the employee or accept a written
statement, and gather and assess the indicated evidence (art. 193(1),
LC). If the employer fails to hear the employee or to accept his/her written
report prior to the imposition of the sanction, the court may revoke the
disciplinary sanction without reviewing the case on its merits (art. 193(2),
LC). However, these safeguards will not apply if the employee was not heard or
his/her report not received through his/her own fault (art. 193(3),
LC). The disciplinary sanctions must be imposed within two months of the
discovery of the violation and no later than 1 year of its perpetration (art.
194(1), LC). Detailed procedures such as the need for the disciplinary
order to be signed by the employee and a requirement for registered mail are
imposed under Article 195 of the LC.
Severance pay
The LC provides detailed provisions covering
compensation for dismissal.
Upon dismissal due to closing down of the
enterprise or part of it, staff reduction, reduction of the volume of work and
work stoppage for more than 30 days, the employee is entitled to compensation
from the employer. The compensation will be in the amount of his/her gross
labour remuneration for the period of unemployment but not for more than one
month. A compensation for longer periods may be stipulated by an act of the
Council of Ministers, by a collective agreement or by the labour contract. If
within this period the employee starts work with a lower remuneration he/she
must be entitled to the difference for the said period (art. 222(1),
LC).
Upon termination of the employment relationship
due to an illness, the employee is entitled to a compensation from the employer
in the amount of his/her gross labour remuneration for a period of two months,
provided his/her length of service is at least 5 years and during the last 5
years of service he/she has not received any compensation on the same grounds (art.
222(2), LC).
Upon termination of the employment relationship
after the employee has acquired the right to a pension (evaluated by length of
service covered by social security and age), then irrespective of the grounds
for the termination, he/she is entitled to compensation by the employer in the
amount of his/her gross labour remuneration for a period of two months. Where
the employee has worked with the same employer for the last ten years of the
length of service then the compensation is equal his/her gross labour
remuneration for a period of six months. Yet, the compensation for the above
circumstances is paid only once (art. 222(3), LC).
Avenues for
redress
The LC provides provisions that seek to protect
the employee against unlawful dismissal. An employee is entitled to contest the
lawfulness of dismissal before the employer or in a court and demand:
Recognition of dismissal
as unlawful and its repeal;
Reinstatement to his/her
previous position;
Compensation for the
period of unemployment due to dismissal; and
Revision of the grounds
for dismissal, entered in his/her service record or other documents (art.
344(1), LC).
The above considerations are considered by the
district court within three months following the receipt of the claim and by the
regional court - within one month following the receipt of the appeal (art.
344(4), LC).
An employer may, however, cancel an order of
dismissal prior to the bringing of the action before the court by the employee (art.
344(2), LC). In cases where the consent of the labour inspectorate or a
trade union body is required prior to dismissal, and no such consent has been
requested, then the court may cancel the order of dismissal as unlawful, without
considering the merits of the labour dispute (art. 344(3), LC).
Trade union organizations and their divisions are
entitled, upon the request of employees, to represent them as attorney before
the Court. However, they are not entitled to conclude agreements, to recognize
claims, to renounce, withdraw, or reduce the claims of employees, and to collect
amounts on behalf of the represented persons, unless they have been expressly
authorized to do so (art. 45, LC).
The proceedings in labour dispute cases are free
of charge for employees. They do not pay fees and expenses for proceedings,
including for applications for repeal of effective rulings on labour cases (art.
359, LC). However, there are strict time limitations for bringing labour
disputes before the court. Labour dispute actions must be brought within:
one month for disputes on
limited financial liability of an employee and for repeal of the
administrative sanction "reprimand";
two months for disputes on
the repeal of the disciplinary sanction "dismissal notice", changes in the
location and nature of work, and termination of employment relationship; and
three years for all other
labour disputes (art. 358, LC).
If the court finds the employee unlawfully
dismissed and requires the employer to reinstate the employee to his/her
previous position, the employee may assume the position provided he/she reports
to work within 2 weeks of receipt of the reinstatement notice, unless this term
is exceeded for valid reasons only (art. 345, LC).
In case of unlawful dismissal, the employee is
entitled to a compensation by the employer in the amount of his/her gross labour
remuneration for the period of unemployment caused by that dismissal, but not
for more than six months (art. art. 225(1), LC). If during this period
the employee has worked on a lower paid job, he/she is entitled to the
difference in the remuneration. The same right will also apply to unlawful
reassignment of the employee to another lower paid job (art. 225(2),
LC). If an unlawfully dismissed employee is reinstated to his/her former
position and he/she is prevented from taking that position, the employer and the
guilty officials are liable jointly and severally to the employee in the amount
of his/her gross labour remuneration from the day of reporting to the day of
his/her actual admission to work (art. 225(3), LC).
Source: International Labour
Organisation and Bulgarian Labour Code
http://www.ilo.org/public/english/dialogue/ifpdial/info/termination/countries/bulgaria.htm#6
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