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; international public law agreements; and EU employment law. Due to the official joining of the Republic of Bulgaria to the European Union on 1 January 2007, the latter prevails over the domestic legislation in cases of controversy. In that respect, it must be stressed that the present national legislation has already been to a large extent synchronised with EU law. The court of law’s decisions also have considerable importance, however, they are deemed not to have the consequence of precedents.
Some of the most important statutes are as follows:
2. PRINCIPAL INSTITUTIONS
The Ministry of Labour and Social Policy (MLSP) is the state executive institution which administers employment issues. The institution is a body of the Council of Ministers with the task of 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.
MLSP implements state policy through its specialised units: Employment Agency; General Labour Inspectorate; Social Assistance Agency; The relevant regional structures of the above stated bodies; and Agency for Foreign Aid.
In the field of labour market and professional qualification, the Ministry:
In the field of industrial relations the Ministry participates in the formulation and implementation of state policy for complete Bulgarian membership into the European Union; proposes and executes measures for introducing the standards of the Council of Europe and the International Labour Organisation in the national labour and social legislation, etc.
MLSP also executes state supervision for compliance of the 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 the compliance with international agreements in the labour market, social policy and social security. The supervision comprises issuing obligatory prescriptions by the respective supervisory bodies of the Ministry in a number of specified cases, eg, for breaches of employment discipline, etc.
3. ROLE OF THE NATIONAL COURTS
The Labour Code (LC) defines the term ‘labour dispute’. According to the LC, labour disputes are disputes between an employee and an employer involving the formation, existence, implementation and termination of employment relationships, as well as disputes concerning the performance of collective agreements and the ascertainment of the length of employment service.
These disputes are civil, according to the meaning of the Civil Procedure Code (CPC). Accordingly, the general civil procedure rules under the CPC are applicable with respect to the problems for which the LC does not contain explicit regulations.
Labour disputes in Bulgaria are examined by the civil law courts. There are no specialised labour courts of law/tribunals, commissions, etc which focus only on labour disputes. The courts hear and decide the disputes according to the procedure established by the CPC, save insofar as otherwise provided for by the LC. The LC does not envisage any specific rules with regard to the venue competence: the court where the defendant has his address registration or registered seat has jurisdiction. All disputes which are within the courts of law’s jurisdiction shall be examined by the district courts acting as first instance.
Some labour dispute claims may be examined pursuant to the rules regarding prompt procedure, ie with shortened terms with respect to the procedural actions of the parties and to the issuing of the judgment. Within this scope might be the claims which are of great importance to the relevant employee, ie claims demanding the termination of an employment relationship, if compensations and indemnifications are also demanded.
The relevant county courts act as the second instance.
The scope of the labour cases which may be appealed before the High Court of Cassation is limited by law. According to the legislation in force, only judgments concerning claims about unlawful dismissals and judgments concerning employment remunerations and indemnities over BGN5,000 may be claimed before a cassation court.
4. EMPLOYMENT STATUS AND CATEGORIES OF WORKERS
The Labour Code sets three basic grounds for the formation of employment relationships: an employment contract; an election; or a competitive examination.
There are also some specific grounds for formation of employment relationships not covered by the LC, eg, a guilty verdict which imposes as punishment reformatory work without imprisonment.
The Law on Administration and the Law on Government Service, both adopted in 1998 – 1999, imposed 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 official relationships, which differs from employment relationships according to the LC. At the same time the Law on Administration kept within the scope of the LC, employment relationships – including some categories of employees in administration, eg, members of the political cabinet of the Prime Minister – as well as the experts in the specialised and municipality administration.
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 duration, unless it specifies a fixed term.
The law limits the possibilities for concluding fixed term employment contracts:
The employment contract, concluded for definite duration, transforms into an indefinite duration employment contract, where the employee keep working for five or more days (without written objection from the employer and the position is not occupied) after the expiry of the agree term.
Individual and collective employment contracts
According to the LC, an employment contract should be concluded between an employee and an employer according to their mutual wish. The Code requires the individual employment contract to be concluded in writing before the commencement of the employee’s work.
The law also sets out the grounds for a team signed agreement. This kind of agreement is used in the sphere of construction, agriculture, etc. and is concluded for fixed work. Its peculiarity is that the contract is concluded by one authorised member of the team. A list of the whole team should be presented by the contract conclusion. On the basis of this sole collective agreement arise individual employment relationships between the employer and every one of the team members.
Employment contract for trial period
This sort of contract should be concluded 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 him or her. The trial period should be up to six months. The specific duration of the contract must be negotiated as well in whose party’s benefit the trial period is agreed – ie which party may solely 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 an employee only once. An employment contract for a trial period shall be presumed finally concluded if it is not terminated within the trial period by the party for whose benefit the trial period clause has been agreed.
Contracts regarding the professional qualification of the employees
Contract for attainment of qualification
An employer may conclude a contract for attainment of qualification with a person who is entering or has entered an educational establishment. Under the contract, the employer shall undertake:
Apprenticeship contract
Under an apprenticeship contract, the employer shall undertake to train the apprentice in the process of work in a specified occupation or speciality and the apprentice shall undertake to master the said occupation or speciality. 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 work for the apprentice conforming to the qualifications attained. That period may not be longer than three years.
Contract for qualification upgrading and for retraining
The parties to an employment relationship may conclude a contract for upgrading the employee’s qualification or for attainment of qualifications in another occupation or speciality (retraining). The contract shall specify:
Collective employment contract
A collective employment contract regulates those issues of employee industrial and social security relations 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 a collective agreement which is binding on the employer.
The LC envisages four levels of collective bargaining:
Only one collective contract may be concluded at the level of enterprise, branch and industry. Within an enterprise, the collective contract must be concluded between the employer and a trade union organisation. The trade union organisation shall prepare and submit the draft of a collective 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 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 regarding the text of the contract arises the recorded text shall prevail.
5. CONTRACT
The employment contract is a bilateral agreement. Its peculiarity, compared to all other agreements, is the object – through the employment contract one of the parties (the employee) gives to the other party (the employer) the use of his or her physical and mental abilities.
The employment contract is always made in return for remuneration which is never less than the legal minimum wage.
Any form of employment contract must be in writing. Within three days after the conclusion or modification of an employment contract and within seven days after its termination, the employer or a person authorised by it is obliged to send notification to the relevant territorial directorate of the National Social Security Institute. Before beginning work, the employer is obliged to provide the employee with a copy of the employment contract as concluded, signed by both parties, along with a copy of the above notification certified by the territorial directorate of the National Social Security Institute.
6. TERMS AND CONDITIONS
The employment contract shall contain mandatory provisions in compliance with the requirements of Directive 91/533/EEC.
The employment contract shall specify:
Other terms may also be agreed under the employment contract pertaining to the provision of labour which are not regulated by mandatory provisions of law, as well as terms which are more favourable with respect to the employee than those established by the collective agreement (supplementary or facultative content).
Working time is the period during which the employee is obliged to execute his or her work. The observation of working time is one of the essential obligations of the employee. The duration of working time is specified in relation to the working week. The term ‘working week’ means first, the number of days – defined as working days – during a calendar week, and second, the total sum of working hours during the working week.
The working week in Bulgaria is five days long, ie the employee is obliged to work during five contiguous working days in the course of the calendar week, after which the employee has the right to take a mandatory break.
The duration of the normal working week is 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 work days for production reasons, etc 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 should inform the Labour Inspectorate with regard to any planned prolonging. The duration of the prolonged working day should not exceed 10 hours.
The LC sets out diminished working time for specific categories of employees, as well as other unusual conditions of work, as follows:
The parties to the employment contract may agree on work for a part of the statutory working full-time/part-time work. The parties must specify the duration and allocation of the working time. The duration of the described 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 his or her employment relationship and is the subjective right of the employee under the individual employment relationship.
According to Bulgarian legislation an employee is entitled to paid annual leave. When beginning work for the first time, the employee may use his or her paid annual leave after at least eight months of employment service. The LC sets the minimum duration of paid annual leave at not less than 20 working days. Certain categories of employees, depending on the special nature of their work, may be entitled to use 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 the subjective right of every employee and is legally guaranteed. A refusal of the right is inadmissible. The LC further develops the Constitutional norm, which guarantees the employees’ right of rest.
According to Bulgarian legislation, it is possible for an employee to use additional paid annual leave, having in mind the requirement specified above/after at least eight months of service/and observing other certain circumstances:
Upon the employee’s request, the employer may grant him/her unpaid leave. Any unpaid leave up to 30 working days shall be assimilated to the length of employment service, and any unpaid leave in excess of 30 working days shall be assimilated to the length of employment service only by exception (for example by an act of the Council of Ministers). This kind of leave the employee may use regardless of whether he has used his paid annual leave or not and irrespective of the duration of his length of employment service.
The Labour Code sets out other kinds of leave as follows:
The LC prohibits paid annual leave to be compensated in cash, except upon termination of the employment relationship.
7. EMPLOYEE REPRESENTATION
The Bulgarian Constitution sets out the employees’ right to associate themselves with trade union or other organisations in order to protect their legal rights and interests. Furthermore, the Constitution sets out the employers’ right to associate themselves with respect to keeping their business interests.
The LC develops further the Constitutional rights of the parties to an employment relationship and grants to the trade union and employers’ organisations internal structural autonomy. This corresponds to art 3 of Convention 87 and to art 2 of Convention 98 of the International Labour Organisation. The main features of the autonomy are as follows:
8. INFORMATION AND CONSULTATION
Trade union organisations as well as employers’ organisations have some specific features and functions connected with consultations and participation in the formation and development of employment relationships:
request to represent them as authorised representatives before a 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; and
• Concluding collective employment agreements.
9. EQUAL OPPORTUNITIES
Equality in employment is governed by the LC. The law forbids any discrimination, privileges or restrictions on the rights and duties, based on criteria unconnected to the employment relationship. The LC develops further the common Constitutional principle for prohibition of discrimination (art 6 para 2) and is related to art 4 para 1 of the Discrimination Protection Act, as well as with the texts of the Convention 111/1958 of the International Labour Organisation.
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. EU law plays an important role in this area, starting with the Treaties of Rome 1957, continuing with art 2(1) of Directive 76/207/EEC; arts 5(1) and 6 of Directive 87/378/EEC; Directive 2000/43/EC.
Indirect discrimination is legally defined in art 4(3) of the Discrimination Protection Act and covers an employee being placed in a less favourable position due to the abovementioned circumstances resulting in factual inequality between employees.
10. DISCIPLINE AND TERMINATION
10.1 Labour discipline and discipline sanctions
The guilty non-performance of employment duties, set out in law or in the Internal Rules of an enterprise, constitute a breach of employment discipline. The employer is entitled to levy specific, legally fixed sanctions on the employee in breach, notwithstanding the economic, or administrative penalty.
The LC describes the most widespread breaches of work discipline as follows:
The employer is entitled to levy a sanction, as specified by law, when the employee commits a breach of work discipline. The sanctions, listed in the LC, are: reprimand; warning of dismissal; or dismissal.
When determining the 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.
For the most serious breaches of discipline the LC envisages the employer dismissing the employee. A dismissal for breach of discipline may be imposed after:
enterprise, and the costs incurred shall be restored in full amount; or • other grave breaches of work discipline.
10.2 Procedure for imposing a sanction
Disciplinary sanctions should be imposed by the employer, a person designated by him or by an 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 relevant 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 after detection of the breach and not later than one year after its commission. Once those terms have expired, the possibility of a sanction is precluded.
For a breach of discipline which also constitutes a criminal offence or an administrative violation of 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 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.
10.3 Compensation
In some mandatory cases, the employer may owe compensation to the employee, for example:
10.4 Termination of the employment contract
According to Bulgarian employment legislation, there are cirsumstances when an
employment agreement should be terminated:
A without notice by either party to an employment relationship;
B only by the employee upon a preliminary written notice;
only by the employer upon a preliminary written notice.
A. An employment contract shall be terminated without either party being obliged to give notice to the other party:
B. An employee may terminate the employment contract by giving the employer 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 after 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, notice may be withdrawn before expiry of the notice period.
C. An employee may terminate the employment contract in writing without notice, where:
D. An employer may terminate the employment contract by giving the employee written notice observing the notice in the following cases:
The LC sets out some mandatory norms with respect to 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, described in the LC, an employer shall obtain advance permission from the Labour Inspectorate for each particular case in order to dismiss:
11. FORTHCOMING LEGISLATION
Having in mind the official joining of Bulgaria to the European Union, our internal employment legislation will further be developed and harmonised with EU law.
Some legislative amendments are forthcoming, more specific in the regime of the second instance and the cassation appeal against judgments on employment disputes. The expected amendments refer to the forthcoming adoption of entirely new Civil Procedure Code.
12. USEFUL REFERENCES
The Ministry of Labour and Social Policy
www.mlsp.government.bg
Employment Agency
www.az.government.bg
Social Help Agency
www.asp.government.bg
Executive Agency ‘Chief Labour Inspectorate’
http://git.mlsp.government.bg
State Agency for Child Protection
www.sacp.government.bg
Fund ‘Employment Conditions’
http://fund.mlsp.government.bg
Disabilities Persons Agency
http://ahu.mlsp.government.bg
National Social Security Institute
www.noi.bg
National Statistics Institute
www.nsi.bg
Information Employment Bulletin
www.trudipravo.bg