The Republic of Bulgaria is situated on the west coast of the Black Sea, with Romania to the north, Greece and Turkey to the south, and the former Yugoslavia to the west. It has a population of approximately eight million, placing it in the same category as Austria, Belgium, Hungary, and Sweden in terms of population size. After World War II, state industrialization policy promoted the growth of urban centers; however, more than one-third of the population continues to live in rural areas.

Bulgaria had a communist form of government with only one legal political party, the Communist Party, from 1946-1990. As discussed below, a new Bulgarian Constitution was adopted early in 1990 to allow a multi-party political system.

Bulgaria has concentrated its resources on the development of certain industries, such as the production of mechanical handling equipment, pharmaceuticals, electrical engineering products, and electronics. Bulgaria's initial efforts to make the transition to a market economy were slow to take effect, so state-dominated industry continued to be the driving force of the national economy, accounting for about two-thirds of its economic output and employing nearly 40 percent of the working population in the late 1990s. By 2001, Bulgaria's continuing efforts to make the transition to a market economy were more successful. As a result of the ongoing privatization process, state-dominated industrial enterprises are no longer the driving force of the national economy, although they continue to employ a significant number of individuals.

In 2004, Bulgaria successfully completed accession negotiations with the European Union (EU), and on April 25, 2005, signed the Accession Treaty. During 2006, a number of constitutional and legislative amendments were enacted (some becoming effective as of the accession date), aimed at approximating Bulgarian law to the laws of the EU.

Bulgaria became an EU Member State on January 1, 2007. Consequently, the EU regulations (including those in the field of employment and social security), became directly applicable in Bulgaria.

A. Constitution

The new Constitution of the Republic of Bulgaria, adopted on July 13, 1991,1 reflects the aspiration to move from totalitarian political and economic control to a democratic free market society. The Constitution transformed the state into a parliamentary republic with plural political power and an economy based on free-market economic initiative. The tripartite form of government in Bulgaria established by the Constitution consists of a legislative, executive, and judicial branch, each with its powers checked by the Constitutional Court.2

Under the new Constitution, the protection of investments and economic activities of Bulgarian and foreign, natural, and legal persons is declared to be a fundamental principle of law.3 The Constitution expressly states that the national economy is based on free economic initiative and guarantees equal rights for all citizens and legal entities to engage in economic activities.4 The Constitution further declares that private property rights are "inviolable and guaranteed by law."5 As the basic law of the country, the new Constitution allows a greater degree of democracy, freedom, autonomy, and creativity than existed under the prior constitution.6 The Constitution also fosters the progressive development of Bulgarian labor legislation.

1. Form of Government

The Constitution provides for a republican form of government led by a President directly elected by universal suffrage for a five-year term. The Bulgarian legislature, the National Assembly, is a unicameral body consisting of 240 elected numbers. The National Assembly elects the Council of Ministers, the highest administrative body in the government.

2. The Courts

The Constitution also establishes an independent judiciary and a Constitutional Court. The Supreme Court is located in the capital, Sofia. Trial courts are sited on a town or city basis and appellate courts on a regional (county) basis. Special courts are established for the military.

Justice in the Republic of Bulgaria is administered by the Supreme Court of Appeals, the Supreme Administrative Court, the District Court of Appeal (regional and military), and the appellate and trial courts.7 The Supreme Court of Appeals provides ultimate judicial supervision over the accurate and equal application of the laws of all courts.8 The Supreme Administrative Court provides ultimate judicial supervision over the accurate and equal application of the law in the administrative justice system. This includes, for example, the authority to rule on disputes concerning the legality of acts promulgated by the Council of Ministers and individual ministers.9

As a general rule, the trial courts have original jurisdiction, and their decisions may be appealed to the District Court of Appeal and the Supreme Court. This is the so-called "full tier system": the trial court, District Court of Appeal, and Supreme Court. The "two-tier system" refers to cases in which the District Court of Appeal decision is final and not appealable to the Supreme Court.

The Constitutional Court interprets the Constitution and rules on requests to decide the constitutionality of any law or legal act passed by the National Assembly or the President. Should a discrepancy between a law and the Constitution be found, the Supreme Court of Appeals or the Supreme Administrative Court will submit the matter to the Constitutional Court.10 In addition, the Constitutional Court: (1) settles disputes over the respective jurisdiction of the National Assembly, the President, and the Council of Ministers, and disputes between local self-governments and central executive bodies; (2) rules on the constitutionality of international treaties signed by the Republic of Bulgaria (prior to ratification); (3) determines the consistency between Bulgarian laws, universally accepted standards of international law, and the international treaties to which Bulgaria is a signatory; (4) issues opinions on disputes concerning the constitutionality of political parties and associations, the legality of elections of the President, the Vice-President, and national representatives; and (5) issues rulings on charges formulated in the National Assembly against the President or the Vice-President.11

B. Labor Law Reforms

1. Traditional Bulgarian Labor Law

Employment and labor relations in Bulgaria traditionally have been dominated by the central government, with the rights and obligations of individual employees, organized labor, and management established by statute. The traditional Bulgarian system that prevailed during the communist era allowed some involvement of employees in governing their relationship with employers, but strong national labor federations dominated collective representation.

The last major revision of the Bulgarian Labor Code to take place before the post-communist reform movement that began in 1989 was the 1986 Labor Code, regulating both individual and collective labor contracts.

2. Post-Communist Era

During the 1990s, a number of changes in Bulgarian labor law occurred in the following areas:

  • regulation of unemployment benefits;
  • settlement of collective labor disputes; and
  • amendments to the 1986 Labor Code.12

Labor Code amendments adopted during the 1990s introduced new concepts and substantially changed the nature of Bulgarian labor law, reflecting the ongoing transition to a more democratic and decentralized social system and market economy.13 With these amendments, labor law in the 1990s was characterized as a mixture of traditional conservative norms, combined with a modest attempt to free the system from the existing bureaucracy and centralized governmental control.

One of the principal purposes of the labor laws is to set minimum standards for labor protection from which the parties to individual and collective labor contracts may deviate by mutual agreement. To this extent, the labor law permits freedom of contract. However, despite the democratic trend reflected in the latest amendments to the Labor Code, there remain certain imperative legal norms that are not subject to negotiation by the parties in either individual or collective labor contracts. Examples include provisions on termination of the employment relationship, employees' disciplinary responsibility, and financial liability of the employee and the employer.14

Over the past few years, Bulgarian social policy and employment law have gradually been developing toward conformity with internationally accepted standards and the European Union's requirements.

In the period between 2001 and 2012, various labor law amendments were introduced. Certain legislative pieces were replaced, and new legislative acts were adopted. These amendments were initiated so as to further develop and regularly accomplish the required harmonization of Bulgarian labor legislation with the cumulative body of EU law. The thrust of these changes has been the development of a more precise legal framework and a more strict regulatory policy in areas such as the following:

  • individual employment relationships;
  • collective bargaining;
  • encouragement of employment;
  • antidiscrimination;
  • social and health security;
  • guaranteeing employee payments in case of bankruptcy of the employer;
  • healthy and safe working conditions;
  • information and consultations with employees;
  • family allowances;
  • social assistance.

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1, Constitution of the Republic of Bulgaria of 1991 [hereinafter Const.], published in Darjaven Vestnik (DV) No. 56 (1992).

2. G. Curtis, Bulgaria: A Country Study 2 (1993).

3. Const. art. 19(3).

4. Id. art. 19(1).

5. Id. art. 17(1), (3). The Constitution imposes restrictions on the private acquisition of land by foreigners, however. Id. art. 22(1).

6. V. Mrachkov, Bulgaria Labor Law 40 (1995).

7. Const. art. 119.

8. Id. art. 124.

9. Id. art. 125(1), (2).

10. Id. art. 150(2).

11. Id. art. 149.

12. V. Mrachkov, Bulgaria Labor Law 39 (1995).

13. Id. at 42.

14. Termination is discussed below at I.F., discipline at I.E., and financial liability of employees at I.E.8.

Originally published by International Labour and Employment Laws, Fourth Edition, Volumes IIA and IIB Bureau of National Affairs, American Bar Association.

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