In Bulgarian legislation, the terms “workers” and “employees” are used to distinguish types of labour, as opposed to the common “blue-collar” and “white-collar” categories. These terms highlight whether physical or mental labour is primarily used. Legally, both workers and employees are competent individuals who provide their labour in exchange for remuneration from an employer. A worker is generally engaged in physical labour, while an employee performs mainly mental tasks. For the purposes of this Employment Practice Guide, the terms “worker” and “employee” will be used interchangeably to cover both categories.

Types of Employment Contracts

Employment contracts may be established on a fixed-term or indefinite basis. Fixed-term contracts may apply in several specific cases, including for a defined period (up to three years unless otherwise specified by law or a Council of Ministers’ act), for the completion of particular work, as a temporary replacement for an absent employee, for the period before a competitively selected candidate fills a role, or for a specified term of office as required.

Written Form of the Employment Contracts

An employment contract must be signed in writing before work begins. The employer is required to register the employment contract, and any amendments, with the National Revenue Agency within three days of signing or modifying the contract. Employment contract terminations must be registered within seven days. Each employment contract must include essential details, such as the names, ID numbers, and addresses of the parties involved; the employer’s representative (if a legal entity); the workplace location, including any remote work address (if applicable); the job title; and the code under the National Classification of Professions and Positions, as issued by the Minister of Labour and Social Policy. Other key details are the contract’s start date and duration, entitlement to annual and extended paid leave, notice period requirements (equal for both parties), basic and additional regular remuneration, payment frequency, and the duration of the working day or week.

Employment Contracts With a Probation Period

Both indefinite and fixed-term employment contracts may include a probation period, allowing either party to assess the suitability of the role or the employee’s capabilities. For indefinite contracts, the probation period can last up to six months. For fixed-term contracts shorter than one year, the probation period is limited to one month. During this period, the party for whose benefit the probation is agreed can terminate the contract without notice. Any time during which the employee is on statutory leave or has not worked for valid reasons is not counted towards the probation period.

Working Hours

The regular working week in Bulgaria is up to 40 hours, typically spread across 8 hours per day over five days. The duration of the working time cannot be extended beyond this limit, except in specific cases outlined in the Labour Code. For employees working at night during a five-day working week, the maximum allowable working hours per week is 35 hours.

Reduced Working Time

Reduced working hours apply to employees working in conditions where the risks to their health and safety cannot be mitigated, regardless of the measures taken, as well as to employees under the age of 18.

Open-Ended Working Time

Given the nature of certain roles, an employer may, after consulting with employee and trade union representatives, establish open-ended working hours for specific positions. Under this arrangement, employees may be required to perform their duties beyond the regular working time. Excess hours on regular working days are compensated with an additional five days of paid annual leave, while work on weekends and public holidays is remunerated with overtime pay.

Flexible Working Time

Employers may set flexible working hours with variable limits, determining when employees must be at work and how attendance is recorded. Outside of mandatory hours, employees can choose when to start their workday. Any unworked hours may be made up on subsequent days within the same working week. The method for tracking working hours is outlined in the employer’s internal labour regulations.

Shift Work

Where the nature of the production process requires it, work is organised into two or more shifts. The rotation schedule for shifts is determined by the employer’s internal regulations. 

Allocation of Working Time

Working time is typically calculated on a daily basis, but the employer may opt for a summarised calculation of working hours. This requires the employer to specify a reporting period, ranging from one to four months, during which the total working time is calculated. A collective agreement may extend this period to a maximum of 12 months.

Daily and Weekly Rest

Employees are entitled to an uninterrupted daily rest period of at least 12 hours. In a five-day working week, employees must receive two consecutive days off, one of which should, in principle, be Sunday. This ensures a weekly rest period of no less than 48 consecutive hours. In cases of summarised working time, the weekly rest period must be at least 36 consecutive hours.

Part-Time

The parties to an employment contract may agree on part-time work, where the employee works a reduced portion of the statutory working time. The contract should specify the duration and scheduling of these reduced hours.

Overtime

Overtime refers to work performed beyond the agreed-upon working hours, either at the employer’s request or with their knowledge and consent. Overtime is generally prohibited, with exceptions allowed for tasks that cannot be completed within regular working hours. Employees may refuse overtime if the conditions set out in the Labour Code, collective agreements, or other relevant regulations are not adhered to.

The maximum amount of overtime work allowed in a calendar year is 150 hours, or 300 hours in cases covered by a collective agreement. Specific limits on overtime include:

• 30 hours of day work or 20 hours of night work in one calendar month;
• six hours of day work or four hours of night work in one calendar week; and
• three hours of day work or two hours of night work across two successive working days.

Overtime pay is agreed upon by the parties but must meet the following minimum requirements:

• 1.5 times the normal wage for overtime on regular working days or under summarised working time;
• 1.75 times the normal wage for work on weekends; and
• double the normal wage for work on public holidays.

Work performed on public holidays, whether overtime or not, must be compensated at no less than double the employee’s regular wage.

Minimum Wage

The minimum wage in Bulgaria is determined annually by the Council of Ministers, along with the types and minimum amounts of additional labour remuneration and benefits that are not already specified by the Labour Code. For 2024, the minimum monthly wage is set at BGN933.

The minimum wage for the following calendar year is calculated using a formula defined in the Labour Code and cannot be lower than the minimum wage set for the previous year. The expected minimum monthly wage for 2025 is BGN1,077.

Monthly Gross Labour Remuneration

The monthly gross labour remuneration of the employees shall include:

• monthly base salary, determined in the individual employment contract;
• additional remuneration for length of service (no less than 0.6% of the monthly base salary per each year of service in relevant positions);
• other additional remuneration per the Labour Law (for overtime, night work, etc); and
• other additional remuneration of a permanent or temporary nature, stated in the individual employment contract or in the internal rules of the employer (including additional remuneration determined at the employer’s discretion, bonuses for  achieving performance or revenue targets, profit-sharing, a 13th salary, and any social benefits, etc).

Paid Annual Leave

Every employee is entitled to a minimum of 20 working days of paid annual leave. Employees in certain categories, such as those with open-ended working hours or those working in hazardous conditions that pose risks to their health and safety, are entitled to additional paid leave, usually five working days or more.

Paid annual leave must be taken after obtaining written authorisation from the employer. It is not permissible to compensate paid annual leave with cash, except when the employment relationship is terminated.

Sick Leave

Employees are entitled to sick leave in cases of illness, occupational disease, workplace injury, or other situations specified in the Labour Code. The employee must submit a medical certificate for sick leave within two business days from the date of issuance.

The payment for sick leave is based on the duration of the illness. For the first two days of sick leave, the employer pays 70% of the employee’s average gross daily remuneration. For the remaining sick leave days, the National Social Security Institute (NSSI) pays 80% of the employee’s average gross daily remuneration, or 90% in the case of a workplace accident or occupational illness.

Unpaid Leave

An employee may request unpaid leave from the employer, regardless of whether they have used their paid annual leave or the length of their service. Unpaid leave of up to 30 working days is counted as part of the employee’s length of employment service.

Leave of Absence

The employer is required to grant leave of absence in the following cases:

• marriage: two working days;
• blood donation: the day of the examination and donation, plus one additional day;

• death of close relatives: two working days for the death of a parent, child, spouse, sibling, parent-in-law, or other lineal relatives;

• summoned for legal matters: time off to attend court as a party to a case, witness, or expert;
• state or European representation: leave for participation in representative state bodies, special negotiating bodies, work councils, or European organisations, as well as for jury service;
• termination notice given by the employer: one hour per day during the notice period; and
• training and disaster protection volunteering: time off for training or participation in voluntary disaster protection formations.

Other Types of Leave

• Study leave: Leave can be granted for 25 working days for each school year if the consent of the employer is granted. In addition, the employee is entitled to 20 working days or, if the employer has not granted consent, ten working days, of unpaid leave per school year for preparing for and taking exams.
• Students are entitled to a one-time paid leave of 30 working days for the preparation and taking of a matriculation or state exam, including the preparation and defence of a thesis, diploma project or dissertation. In addition, the employee is entitled to four months of unpaid leave or, if the employer has not granted their consent, two months of unpaid leave.
• Leave for entrance exams: Employees are entitled to six working days for applying to a secondary school or 12 working days for applying to a higher education institution or doctoral studies, provided the employer grants consent. If consent is not granted, the employee is entitled to unpaid leave for these periods, reduced by half.
• Carer’s leave: Employees are entitled to carer’s leave to look after or urgently accompany a child (up to 60 calendar days) or a sick family member over the age of 18 years (up to 10 days) for medical examination, research, or treatment, either in the country or abroad.
• Maternity leave: Female employees are entitled to 410 calendar days of maternity leave per child. During this period, they will receive a cash benefit amounting to 90% of their average gross daily labour remuneration.
• Shared maternity leave: With the consent of the mother, after the child reaches six months of age, the father or one of the child’s grandparents may take shared maternity leave for the remainder of the 410-day period. This leave is compensated at 90% of the employee’s average gross daily labour remuneration.
• Adoption leave: Employees adopting a child up to five years old are entitled to 365 days of adoption leave. This leave is compensated by the National Social Security Institute at 90% of the employee’s average gross daily labour remuneration.
• Shared adoption leave: In cases where a child is adopted by a married couple, with the adoptive mother’s consent, the paid adoption leave may be transferred to the adoptive father or one of the adoptive parents’ parents after six months from the child’s arrival, but no later than the child’s 5th birthday. The compensation during this leave is 90% of the employee’s average gross daily labour remuneration.
• Paternity leave and paternity leave for adoptive fathers: Eligible male employees and adoptive fathers will be entitled to 15 days in line with legislation. Paternity leave will be paid at a rate of 90% of the employee’s average gross daily labour remuneration.
• Parental leave: After completing maternity leave, mothers and adoptive parents are entitled to parental leave until the child reaches the age of two. This leave can be transferred to the father, adoptive father, or one of the child’s grandparents. The amount of allowance payable during this leave is defined by the State Social Security Budget Act for the relevant year. For 2024, the amount of allowance payable for parental leave is BGN780 per month.
• Childcare leave of the father (adoptive father): In case the father (adoptive father) has not used parental leave, he shall have a right to two months of childcare leave until the child reaches 8 years of age. Where the father (adoptive father) has used parental leave for a period shorter than two months, he shall be entitled to leave for the remaining duration, up to two months. The amount of allowance payable during this leave is defined by the State Social Security Budget Act for the relevant year. For 202, the amount of allowance payable for childcare leave of the father (adoptive father) is BGN780 per month.
• Unpaid childcare leave: Parents are entitled to take unpaid childcare leave for up to six months to care for a child from their 2nd to their 8th birthday. This leave can be taken by either parent.

Confidentiality

Pursuant to the provisions of the Labour Code, employees shall not disclose any confidential information of the employer, they shall be loyal to the employer and not abuse the employer’s trust, and shall protect the reputation of the employer. Any violation of these obligations shall constitute a breach of labour discipline, and the employer has the right to impose disciplinary actions, including dismissal.

Employee Financial Liability

Employees are financially liable for any harm caused to the employer due to negligence in or related to the performance of their job duties. Liability for harm caused intentionally, through a criminal offence, or unrelated to the performance of job duties shall be governed by civil law.

For any harm inflicted on the employer due to negligence in or related to the execution of job duties, the employee is liable to the extent of the damage, but not exceeding the agreed monthly salary. In cases where the harm is caused by a manager, the liability is limited to the extent of the harm, but cannot exceed three times the agreed monthly salary.

An employee assigned the responsibility of handling, storing, disbursing, or accounting for financial or physical assets shall be liable to the employer as follows:

• to the extent of the harm, but not exceeding three times the agreed monthly salary; and
• for any shortage, the employee is liable for the full amount, along with legal interest from the day the harm occurred, or if the date cannot be determined, from the day the shortage was discovered.

Employee Disciplinary Liability

A culpable failure to fulfil labour duties constitutes a breach of labour discipline. The respective employee may be subject to disciplinary actions (reprimand, warning of dismissal or dismissal) without prejudice to any financial, administrative, or criminal penalties that may apply.

Any clauses in the employment contract that prevent employees from engaging in competitive activities for a specified period after the termination of their employment are considered null and void. Additionally, any clause that imposes civil liability on an employee for failing to comply with a requirement not to enter into employment or civil legal relations with a competitor of the company after the termination of the employment agreement is also null and void, as it contradicts the law.

The Commission for the Protection of Competition has clarified that “no-poach agreements” between employers or competitors in the labour market, made with the intent of preventing the recruitment or hiring of employees, can restrict competition by limiting companies’ ability to effectively recruit staff. As such, these agreements are considered anti-competitive and are prohibited.

Even in the absence of a no-poach agreement or non-solicitation clause, the act of soliciting employees from a competitor may, in some cases, be deemed “unfair competition”. In such instances, an employer can bring a case before the Commission for the Protection of Competition against the former employee if they violate competition laws or assist others in doing so, as well as against the relevant company. Possible actions include: 

• Any action or inaction in the course of economic activity that contradicts good commercial practices and causes harm, or may harm, the interests of competitors. For instance, the use of resources and clients in a manner contrary to good commercial practice may be considered a violation, though there must be substantiated evidence to support such claims.
• The use of a company name, brand, or geographical indication that is identical or similar to that of another, in a way that could harm the interests of competitors. If the similarity between company names or brands is high enough to cause confusion among the public, leading them to believe they are dealing with a particular company, this may constitute unfair competition.
• Unfair competition aimed at attracting customers in a way that results in the termination or violation of existing contracts, or the cancellation of potential contracts with a specific competitor. This can involve unscrupulous actions designed to encourage customers to break their contractual relationships or cancel agreements, leading to the company benefiting from these customers by securing contracts of its own.
• The knowledge, use, or disclosure of production or trade secrets in a manner that contravenes good commercial practice, including instances where such secrets are disclosed with the understanding that they will not be used or shared.

The Personal Data Protection Act governs social relations in connection with the protection of natural persons with regard to the processing of their personal data, to the extent that the relations are not regulated under Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119/1 of 4 May 2016).

The employer collects and processes employees’ personal data in relation to the conclusion, performance, modification, and termination of employment contracts. This includes preparing additional agreements, termination orders, documents evidencing length of service, employment certificates, maintaining employment records, accounting for labour remuneration, calculating relevant tax and social security deductions, managing distraints on employment remuneration, and processing leave entitlements in accordance with the Labour Code. It also includes activities related to recruitment and selection in the case of termination of employment relations, among others.

The employer shall collect and process employees’ personal data on a lawful basis, to the extent necessary to fulfil its obligations. Processing is considered lawful when it is necessary for the performance of employment relations under the employment contract, or when it is required to comply with the employer’s legal obligations under applicable legislation. It can also occur with the employee’s consent or when processing is necessary to pursue the legitimate interests of the employer.

The employer is required to implement appropriate technical and organisational measures to ensure, and to be able to demonstrate, that personal data processing is carried out in accordance with data protection legislation.

Employees’ personal data shall be retained by employers for the duration required by applicable law. Additionally, any employer acting as a data controller must determine a storage period for personal data of applicants involved in recruitment procedures, which may not exceed six months unless the applicant has consented to a longer storage period. After this period, the employer must erase or destroy the documents containing personal data, unless otherwise required by specific law.

Citizens of the EU, the countries that are parties to the European Economic Area (EEA) agreement, and the Swiss Confederation, as well as their family members, can enter and leave the Republic of Bulgaria using their identity cards or passports. They are permitted to stay freely for up to three months. After this period, they must register in order to obtain a certificate of temporary residence. EU, EEA, and Swiss Confederation citizens do not require a work permit to work in Bulgaria.

Workers who are citizens of a third country (“Foreign Worker(s)”) may be granted access to the labour market when applying for positions that do not require Bulgarian nationality, under the following conditions:

• The total number of Foreign Workers with long-term residence permits, who have worked for a local employer in the preceding 12 months, does not exceed 20% of the average workforce employed on contracts during that time, or 35% for small or medium-sized businesses.
• The working conditions and compensation for Foreign Workers must be no less favourable than those for Bulgarian nationals in the same category of work.
• The Foreign Worker must possess the specialised knowledge, skills, and professional experience required for the relevant position.

A Foreign Worker shall be allowed access to the labour market provided that they:

• have an employment contract with a local employer;
• are seconded to Bulgaria within the framework of providing services;
• are reassigned for intra-corporate transfer purposes; or
• work as a freelance professional.

In some cases, the Ministry of Internal Affairs issues the work permit after receiving a positive opinion from the Executive Director of the Employment Agency regarding access to the labour market. This applies to permits such as the Single Residence and Work Permit, the EU Blue Card (for highly skilled employment), the Seasonal Worker Permit, and the Intra-corporate Transfer Permit. In other cases, the work permit is issued by the Executive Director of the Employment Agency, and a residence permit is then granted by the Ministry of Internal Affairs based on the work permit (for example, for seconded Foreign Workers, freelance activities, or for the family members of Foreign Workers who already hold a residence permit).

Foreign Workers who have legal access to the labour market may be employed under an employment contract or may work as seconded or posted workers within the framework of providing services in Bulgaria. However, they can only work for the local employer or entity providing work to seconded or posted workers, and only in the positions, places of work, and terms of employment specified in the permit granted by the competent authorities.

The Employment Agency registers Foreign Workers for:

• employment of persons of Bulgarian origin;
• secondment within the scope of providing services on the territory of the Republic of Bulgaria for a period of up to three months/or six months/within 12 months;
• seasonal employment up to 90 days;
• employment of scientific workers for the purposes of conducting a scientific research project;
• employment of full-time students in higher education institutions in the Republic of Bulgaria; and
• employment of interns under an employment contract with an internship condition.

Employers shall declare the employment of Foreign Workers who reside on the territory of the Republic of Bulgaria as family members of:

• foreigners with permitted long-term or permanent residence in the Republic of Bulgaria;
• Bulgarian citizens, citizens of a member state of the European Union, of a state party to the Agreement on the European Economic Area, or of the Swiss Confederation, who by virtue of international treaties with the European Union have the right to free movement;
• foreigners enjoying rights under the Asylum and Refugees Act;
• third-country nationals to whom expulsion orders have been issued and the expulsion has not taken place after one year from the issuance of the order; and
• third-country nationals who are victims of human trafficking and have special protection status under the Anti-Trafficking in Human Beings Act.

The employer is required to notify the relevant territorial directorate of the Labour Inspectorate within seven days of the actual commencement of work of the respective Foreign Worker.

Bulgarian legislation does not include specific regulations regarding mobile work. The ability to perform work from various locations without prior approval from the employer is only available to contractors under service agreements.

However, recent amendments to the legislation, effective from 1 April 2024, have addressed remote work. These amendments allow employees to work from more than one location outside the employer’s premises, as long as the locations are specified in the employment contract. The employer may change the employee’s place of work for up to 30 working days per year, based on a written request from the employee, and subject to the conditions and procedures outlined in the employment contract and/or internal employer policies.

Employees are required to comply with the minimum daily and weekly rest periods and are not obligated to respond to communications initiated by the employer during these rest periods, unless such conditions are expressly agreed in the individual employment contract and/or collective agreement.

The procedure for assigning and reporting remote work should be outlined in the individual employment contract, the collective labour agreement, and the employer’s internal policies.

The employer is responsible for providing, at its own expense, the necessary equipment and software to facilitate remote work, including devices for communication with remote employees (such as internet connectivity), data protection measures, and information about minimum safety and health requirements for the workplace where remote work is performed. The employer must also provide guidance on working with the equipment, maintaining it, and complying with legal requirements and rules. Additionally, the employer should establish a monitoring system and other technical or documentary aids as specified in the individual contract and/or collective labour agreement.

Employees who perform remote work must provide written information to the employer about the characteristics of their remote workplace and adhere to the employer’s health and safety regulations, as well as company policies.

The employer is required to inform the employee in writing, in advance, about the responsibilities and potential sanctions for non-compliance with the established rules and requirements, including those related to the protection of company data.

An employee may be granted paid or unpaid sabbatical leave in accordance with the terms and procedures established in a collective agreement or through an agreement between the parties to the employment relationship. The period of unpaid sabbatical leave will count towards the employee’s length of service.

In recent years, particularly following the COVID-19 crisis, many employers have opted not to invest in office premises, instead offering more flexibility to employees through hybrid work models. This has led to the rise of desk sharing, where employees do not have fixed workspaces but instead use any available space when in the office.

Another emerging trend, though not legally regulated, is the use of co-working spaces or office-sharing arrangements, particularly by employers with fewer than ten employees. These arrangements may raise concerns related to health and safety regulations. To address this, employers should ensure that relevant clauses regarding health and safety are included in their agreements with landlords or other employers.

Employees have the right, without prior permission, to freely form trade union organisations of their own choosing, as well as to join and leave them on a voluntary basis.

Trade union organisations represent and protect employees’ interests before state bodies and employers, particularly in matters related to industrial relations, social security, and living standards. They achieve this through collective bargaining, participation in tripartite co-operation, the organisation of strikes, and other legal actions.

The bodies of trade union organisations within the employer’s organisation have the right to participate in the drafting of all internal rules and regulations related to industrial relations. The employer is required to invite them to participate in this process.

Trade union organisations and their branches are entitled, at the request of employees, to represent them as authorised representatives before the court.

The general meeting of employees shall consist of all employees of the employer. It can be convened by the employer, by the leadership of the trade union organisation, or on the initiative of one-tenth of the employees. The general meeting will make decisions by a simple majority of the employees present, unless otherwise stipulated by the Labour Code, another law, or the organisation’s statute.

At a general meeting, employees may elect representatives to represent their collective interests on issues related to industrial relations and social security, both before the employer and state bodies. These representatives shall be elected by a majority of more than two-thirds of the members present at the general meeting.

In companies with at least 50 employees, or in organisationally and economically self-contained divisions of the employer with at least 20 employees, the general meeting shall elect employees’ representatives from among its members. These representatives are responsible for exercising the right to information and consultation. They will also take part in concluding an agreement that defines the content of the information to be provided, the timing for its delivery to the representatives, the time frame for receiving their opinion, and the subject of consultation. Additionally, the agreement will outline the employer’s designated representatives responsible for informing and consulting the employee representatives.

The number of the employees’ representatives shall be determined in advance by the general meeting, as follows:

• applicable to companies with 50 to 250 employees: not fewer than three and not more than five;
• applicable to companies with more than 250 employees: not fewer than five and not more than nine;
• applicable to organisationally and economically self-contained divisions: not fewer than one and not more than three.

The employees’ representatives shall be elected for a term of one to three years.

The employees’ representatives shall have the right to:

• be informed by the employer in a manner enabling them to assess the possible impact of the measures envisaged by the competent authorities;
• require that the employer provide them with the necessary information, if this has not been done within the established time limits;
• participate in consultation procedures with the employer and to express their opinion on the measures envisaged by the competent authorities, which shall be taken into account during the decision-making process;
• meet with the employer in cases where they have to inform the employer of the questions raised by the employees;
• have access to all workplaces in the enterprise or division; and
• be enrolled in training necessary for the performance of the functions thereof.

The collective agreement governs issues related to the industrial and social-security relations of employees that are not addressed by mandatory legal provisions. It cannot include clauses that are less favourable to employees than those provided by the law or a collective agreement that is binding on the employer.

A collective agreement can be concluded at the employer, branch, industry, or municipal level. Within a company, it is typically concluded between the employer and a trade union organisation. At the industry or branch level, the agreement is concluded between the relevant representative organisations of employees and employers. In municipalities, collective agreements for activities funded by the municipal budget are concluded between the representative organisations of employees and employers.

The collective agreement must be made in writing and registered with the relevant Labour Inspectorate. It will apply to employees who are members of the trade union organisation party to the agreement.

The employer is required to inform all employees of the collective agreements concluded at the enterprise, industry, branch, or municipal level that bind the employer, and to ensure that the texts of these agreements are available for employees to review.

Any party to the collective agreement, or any employee to whom the agreement applies, has the right to take legal action before the court to request the declaration of nullity of the collective agreement or any of its individual clauses, if such clauses are in conflict with or circumvent the law. Legal action may also be taken in the event of non-performance of obligations under the collective agreement.

Termination During the Probation Period

During the probation period, the party for whose benefit it has been agreed may terminate the employment contract without notice and without providing any reasons.

Termination by Both Parties Without Notice

An employment contract shall be terminated without either party being obligated to give notice to the other party:

• by mutual consent in writing between the parties; the party receiving the offer must respond within seven days of receiving it;
• upon expiry of the agreed term;
• upon completion of the specified work.;
• upon the return of the employee who was replaced;
• if the employee is unable to perform the assigned work due to illness, resulting in permanently reduced working capacity, or due to health contraindications as confirmed by a medical expert board’s conclusion; in such cases, termination is not permissible if the employer can offer alternative work suitable for the employee’s health condition and the employee agrees to take it;
• if the dismissal of an employee is declared wrongful, or if the employee is reinstated to their previous position by the court but fails to report to work within the specified timeframe; and
• in other specific cases provided for in the Labour Code.

Termination by the Employee Without Notice

An employee may terminate the employment contract in writing without notice, where:

• if the employer discontinues its operations, or places the employee on unpaid leave without their consent;
• if the employer delays payment of wages or benefits under the Labour Code or social insurance, or unlawfully changes the nature or place of work, the agreed remuneration, or fails to fulfil other obligations set out in the employment contract, collective agreement, or by law; if the employer’s actions result in a substantial deterioration of working conditions due to a change of employer, the employee is entitled to compensation equivalent to the gross salary for the notice period in the case of an indefinite contract, or to the actual detriment incurred in the case of a fixed-term contract;
• if the employee is unable to perform the work due to illness and the employer fails to provide suitable alternative work in line with the health authorities’ prescriptions; and
• in other specific cases provided for in the Labour Code.

Termination by the Employee With Notice

The employee may terminate the employment contract by giving the employer written notice without a reason.

See 7.3 Dismissal for (Serious) Cause regarding terminations by the employer with notice in specific cases, and termination by the employer without notice.

Termination at Employer’s Initiative in Exchange for Compensation

The employer, at its own initiative, may offer the employee termination of the employment contract in exchange for compensation.

If the employee accepts the offer, the employer is obliged to provide compensation amounting to at least four times the gross monthly labour remuneration last received, unless the parties have agreed to a higher compensation amount.

Collective Dismissals

Under the Labour Code, collective dismissals are those carried out by the employer for one or more reasons not related to the individual employee, where the number of dismissals within a 30-day period meets the following criteria:

• at least ten dismissals in companies employing more than 20 but fewer than 100 employees;
• at least 10% of the total workforce in companies employing at least 100 but fewer than 300 employees; and
• at least 30 dismissals in companies employing 300 employees or more.

When the employer plans to carry out collective redundancies, it must begin consultations with the employees’ representatives and trade union organisations in a timely manner, but no later than 45 days before the redundancies are to be carried out. The employer must provide full information about the upcoming redundancies in accordance with the Labour Code, and the aim is to reach an agreement with the employees’ representatives to avoid or limit the collective redundancies and mitigate their impact.

After providing the necessary information to the representatives, the employer is required to send a copy of it to the relevant division of the employment agency within three working days. The collective dismissals may only take place no earlier than 30 days after the notification to the employment agency, irrespective of the notice periods.

The notice period for the termination of an indefinite employment contract is 30 days, unless the parties have agreed on a longer period, not exceeding three months. For a fixed-term employment contract, the notice period is three months, but it shall not exceed the remaining term of the contract.

The termination notice may be withdrawn if the employee communicates this intention before or at the same time as the notice is received. Additionally, with the employer’s consent, the notice may be withdrawn before the notice period expires.

Either party – whether the one giving the notice or the one receiving it – may terminate the employment before the end of the notice period. In such cases, the terminating party must compensate the other party with the compensation amounting to the employee’s gross remuneration for the unfulfilled notice period.

Termination by the Employer With Notice

The employer may terminate the employment contract by giving the employee written notice, observing the notice period in the following cases:

• the closure of the enterprise;
• the closure of part of the enterprise or downsizing of personnel;
• a reduction in the volume of work;
• employee idling for more than 15 working days;
• the employee’s inability to perform the work efficiently;
• the employee does not possess the necessary educational qualifications or professional skills for the work;
• the employee refuses to follow the enterprise or division of it in the event of relocation outside of the current work location;
• the position held by the employee must be vacated for the reinstatement of a wrongfully dismissed employee;
• the employee becomes entitled to a pension or if the employment began after the employee has acquired and exercised the right to a pension;
• there is a change in the requirements for performing the position, and the employee does not meet these new requirements; or
• the performance of the employment contract becomes objectively impossible.

Compensation Due by the Employer

In cases of dismissal due to the closure of the enterprise or part of it, downsizing of personnel, reduction in the volume of work, idling for more than 15 working days, refusal by the employee to follow the enterprise or a division thereof in case of relocation, or when the position occupied by the employee must be vacated for the reinstatement of a wrongfully dismissed employee, the employee is entitled to compensation. This compensation is equivalent to the employee’s gross remuneration for the period of unemployment, but it shall not exceed one month’s salary. If the employee begins new work at a lower remuneration during this period, they shall be entitled to the difference in pay for up to one month as of termination.

Selection Process

In the event of the closure of part of an enterprise, as well as during downsizing of personnel or a reduction in the volume of work, the employer has the right to select which employees to retain. Acting in the best interests of the production or service, the employer may dismiss employees whose positions are not being downsized in order to retain those with higher qualifications or superior performance.

Termination by the Employer Without Notice

An employer may terminate an employment contract without notice if the employee has been detained for the execution of a sentence. The employer must also terminate the contract without notice in the following situations:

• The employee has been disqualified, either by a sentence or through an administrative procedure, from practising the profession or occupying the position.
• The employee refuses to accept suitable work offered as part of occupational rehabilitation.
• The employee is dismissed due to a breach of discipline.
• The employee fails to notify the employer of any incompatibility with the position they hold.
• Incompatibility exists with the position as defined by the Labour Code.
• Other specific conditions as outlined in the Labour Code.

Procedure in Case of a Disciplinary Dismissal

A disciplinary dismissal may be imposed if any of the following occur:

• The employee reports for work late or leaves early on three occasions, each lasting at least one hour, within a single calendar month.
• The employee is absent from work for two consecutive working days.
• There are repeated breaches of work discipline.
• The employee abuses the employer’s trust or discloses confidential information.
• The employee causes harm to citizens in the trade or services sector.
• The employee participates in gambling activities using the company’s telecommunication facilities.
• Other serious breaches of work discipline.

A disciplinary dismissal shall be imposed in compliance with the criteria for determining the disciplinary sanction, namely the gravity of the breach, the respective circumstances, as well as the conduct of the employee.

Before any disciplinary sanction, including dismissal, is imposed, the employer must request an explanation from the employee and gather evidence. Disciplinary sanctions, including dismissal, must be implemented through a reasoned written order. These sanctions must be imposed within two months after detecting the breach and no later than one year after it was committed.

Upon disciplinary dismissal, the employee shall owe the employer compensation amounting to the employee’s gross labour remuneration for the notice period in case of an indefinite employment contract; and amounting to the actual detriment in case of a fixed-term employment contract.

The termination of the employment contract must be made in writing. A termination agreement may be signed in the case of termination by mutual consent or when the employer initiates termination, accompanied by agreed compensation.

In all other cases, the employer shall issue a termination order or order of dismissal, specifying the grounds for termination and any compensation owed to the employee, such as compensation for unused paid leave or a non-observed notice period.

In the event of the closure of part of an enterprise, downsizing of personnel, reduction in the volume of work, where the employee lacks the capacity to perform the work efficiently, or when there is a change in the requirements for the position that the employee fails to meet, or in cases of disciplinary dismissal, the employer must obtain advance permission from the Labour Inspectorate for each specific case in order to dismiss the following categories of employees:

• female employees who are the mother of a child under three years old;
• employees undergoing occupational rehabilitation or those suffering from specific diseases, after obtaining an opinion from the territorial Medical Expert Board;
• employees who have commenced the use of permitted leave;
• employees elected as representatives of the workforce or health and safety representatives at work, for as long as they hold such positions;
• employees who are members of a special negotiating body or certain European organisations, for the duration of their performance of relevant functions; and
• employees who are members of trade union leadership, during their tenure in such a position and for six months thereafter, but only with the prior consent of the trade union body designated by the decision of the central leadership of the trade union organisation.

A pregnant female employee or a female employee undergoing advanced stages of in vitro treatment may only be dismissed with notice in very limited circumstances, as specified in the Labour Code.

An employee on maternity leave may only be dismissed if the enterprise is being closed.

These protections apply at the time the dismissal order is served.

The employee has the right to challenge the legality of their dismissal either before the employer or in court, and to seek the following remedies:

• the dismissal to be declared wrongful and revoked;
• reinstatement to their previous position;
• compensation for the period of unemployment resulting from the dismissal; and
• modification of the grounds for dismissal.

The employer, acting unilaterally, may revoke the dismissal order before the employee files a legal action in court. Labour disputes concerning wrongful dismissal will be reviewed by the regional court within three months of receiving the statement of action, and by the district court within one month of receiving the appeal.

If the employer or court orders the reinstatement of the employee, the employee may return to their previous position by reporting to work within two weeks of receiving the reinstatement communication, unless the time limit is exceeded for valid reasons.

If the dismissal is found to be wrongful by the employer or court, or if the grounds for termination are corrected, the change must be recorded in the employee’s labour book or, after 1 June 2025, in their electronic labour record.

In the case of wrongful dismissal, the employee is entitled to compensation from the employer. This compensation will be equal to the employee’s gross labour remuneration for the period of unemployment caused by the dismissal, but not exceeding six months. If, during this period, the employee has worked in a lower-paid job, they are entitled to the difference in wages.

The employer shall ensure:

• equal remuneration for equal or equivalent work; 
• equal opportunities for training and professional growth and promotion;
• equal criteria in imposing disciplinary sanctions and termination of employment contracts;
• effective measures to prevent any form of discrimination in the workplace in co-operation with the trade unions; and
• that the workplace is adapted to the needs of persons with disabilities.

In the event of failure to fulfil its obligations, the employer shall bear liability for acts of discrimination committed at the workplace, including by its employees.

Anti-discrimination claims may be brought before the Commission for Protection of Discrimination or before the regional court.

The Commission for Protection of Discrimination may impose sanctions amounting from BGN250 to BGN2,000 (in case of a legal entity, the pecuniary sanction may be from BGN250 to BGN2,500), and administrative coercive measures.

The regional court may order the employer to cease the discriminatory act, restore the situation to its state prior to the violation, refrain from further violations, and pay liquidated damages to the claimant.

In a discrimination proceeding, if the claimant presents facts suggesting discrimination, the burden of proof falls on the employer to demonstrate that the right to equal treatment has not been violated.

Courts shall accept procedural actions in electronic form and are required to accept electronic statements through which procedural actions are carried out, provided that the requirements of Regulation (EU) No 910/2014 and the Law on Electronic Documents and Electronic Authentication Services are met. The statements must be signed with a qualified electronic signature when the law requires a handwritten signature for the validity of certain statements.

Participation of the Parties by Video Conference

Any party may request to participate in a court hearing via video conference if they are unable to appear in person.

The court will determine the date and time for the hearing where video conferencing will be used, after confirming the possibility of holding the hearing with the nearest regional court, located at the party’s place of residence, the witness’s or expert’s location, or the place of detention or deprivation of freedom where the person is being held.

During the video conference, the party must be present in a room specifically equipped for videoconferencing at the designated, approved location.

Labour disputes are disputes between an employee and an employer regarding the formation, existence, implementation, and termination of employment relationships, as well as disputes between the employees’ representative and the employer. These also include disputes over the performance of collective agreements, the determination of length of employment service, and disputes between employees and enterprises providing temporary work.

Labour disputes are to be settled by the courts (see 9.3 Costs) through an accelerated court procedure, and must be initiated within the prescription periods outlined in the Labour Code.

A class action may be brought on behalf of individuals harmed by the same infringement where, due to the nature of the infringement, the exact circle of affected persons cannot be precisely defined, but is identifiable.

In cases of non-performance of obligations under a collective agreement, legal actions may be brought before the court by the parties to the agreement, as well as by any employee to whom the agreement applies.

Collective labour disputes should be resolved through direct negotiations between employees and employers or their representatives, according to a procedure they freely determine. Regarding situations where no agreement is reached, please see 9.2 Alternative Dispute Resolution.

Except for collective labour disputes, all labour disputes shall be settled by the courts in accordance with the procedure established by the Civil Procedure Code, unless otherwise specified by the Labour Code.

Collective labour disputes may be resolved through the National Institute for Reconciliation and Arbitration, which assists in the voluntary settlement of disputes between employees and employers. The National Institute for Reconciliation and Arbitration is not an arbitration court, but rather a corporate body under the Minister of Labour and Social Policy, headquartered in Sofia, and operating as an executive agency. A collective labour dispute may be referred for settlement to a sole arbitrator or an arbitration commission, provided there is a written agreement between the parties.

When a court case is initiated, state fees shall be collected based on the cost of the claim and the costs of the proceedings, including remuneration for experts, witnesses, and attorney’s fees.

The claimant’s fees, costs, and attorney’s fees, if applicable, shall be paid by the defendant in proportion to the portion of the claim that is awarded. The defendant is also entitled to request payment of the costs incurred by them in proportion to the portion of the claim that is rejected.

However, fees and expenses for the proceedings are not to be paid by claimants who are workers or employees in cases arising from employment relationships.