The most common reasons for termination of employment contract in Bulgaria are the resignation, staff reduction, mutual agreement, lacks of capacity for efficient working performance, etc.

The Bulgarian Labour Code entitles both the employer and employee to terminate the employment relationship. However, an employer can terminate the contract only on the exhaustive grounds. It is important to note that the Bulgarian labour legislation provides for special rules with regard to termination of the employment contract by the employer which should be strictly observed. 

The termination of job contract must be in writing. Within seven days after the termination, the employer sends a notification of this to the National Revenue Agency

Common grounds for termination of employment contract

The labour contract may be terminated by mutual agreement. The party who has been approached with the offer is obligated to take a stand on the said offer and to inform the other party within 7 days upon receipt. If fails to do so, it is considered that the proposal is rejected.

The employment relationship terminates without either party being obligated to give notice to the other party:
  • upon expiry of the agreed term;
  • by the completion of the work as specified;
  • if the employee is unable to execute the work assigned thereto by reason of illness which has led to permanently reduced working capacity or because of health contraindications. 

As well, during the trial period, each of the parties can terminate the job contract without any further notice or consequences.

Termination of employment contract by notice

The employee is entitled to terminate the contract at any time with prior written notice. The notice period is 30 days, unless the parties have agreed on a longer period, but not longer than three months. A fixed-term employment contract may be terminated with 3 months written notice, but not more than the remainder of the term of the contract. The notice period begins to run on the day succeeding the receipt of the said notice. With the consent of the employer, a notice may furthermore be withdrawn before expiry of the notice period.

The same duration of the notice period is applicable for employers.

An employer may terminate the employment contract by giving the employee a written notice in the following cases:
  • upon closure of the enterprise or part of the enterprise;
  • upon staff reduction;
  • upon reduction in the volume of work resulting in a decrease in the number of employees;
  • upon idling for more than 15 working days;
  • where the employee lacks the capacity for efficient execution of the work;
  • where the employee does not possess the educational level or professional qualification required for the work executed;
  • upon change of the job description and the employee no longer satisfies the said requirements;
  • where the position occupied by the employee must be vacated for reinstatement of a wrongfully dismissed employee, who previously occupied the same position.

Upon closure of part of an enterprise, as well as upon downsizing of personnel or reduction in the volume of work, the employer has the right to selection. Acting for the good of production or for the good of the service, the employer may dismiss workers whose positions are not reduced in order to retain in employment employees who possess higher qualifications and are more efficient and productive at work.

As well, both parties may terminate the labour agreement prior to the expiration of the notice period against compensation for the notice period which has not been observed.  

Termination of employment contract without notice

Both parties may terminate the employment contract in writing without prior notice.

The employee has the right to terminate the contract, where:
  • is unable to perform his/her duties by reason of illness;
  • the employer delays the payment of the labour remuneration or of a benefit under the Labour Code or under social insurance;
  • the employer changes the place or nature of work or the agreed labour remuneration, except in the cases where the employer has the right to make such changes, as well as where the employer fails to fulfil other obligations agreed by the employment contract;
  • the employer gives unpaid leave to the employee without the consent thereof.

An employer may terminate an employment contract without notice where the employee is dismissed by reason of breach of discipline. Furthermore, the employer may dismiss an employee without notice when an employee has been arrested for an offense and is sentenced.

Termination of employment contract on employer’s initiative in consideration of agreed compensation

The employer may offer the employee termination of the employment contract in consideration of compensation. The employee must decide whether to accept or reject the proposal within 7 days.

If the employee accepts the offer, the employer owes compensation to the amount of not less than the quadruple amount of the gross monthly labour remuneration as last received, unless the parties have agreed on a larger amount of the compensation.

If this compensation is not paid within one month after the date of termination of the employment contract, then it is considered that the contract is not terminated.

For more information or preparation of all types of employment contracts and job descriptions please do not hesitate to contact us by e-mail: office@kgmp-legal.com or call us on: +359 2 851 72 59.


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