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Labour market reforms in Bulgaria - background summary (update March 2019)

Since 2011, the labour market policy of the various Bulgarian governments has concentrated on a number of key areas, such as flexibilisation, representation of the social partners’ organisations and training. However, the reforms can be qualified as relatively modest and minor.

Flexibilisation

  • Different measures were introduced to labour legislation during the last 7-8 years in order to introduce greater flexibility to some aspects of work and to combat undeclared work.
  • Changes to the Labour Code in 2014 introduced new, separate grounds for a contract of employment for internships which came into effect as from March 2015. Art. 233a of the LC provides the legal definition of an internship as on-the-job training that entails working under the guidance of the employer or an appointed mentor in order to acquire the practical skills of the trade or vocation. The grounds for concluding such agreements are provided in Art. 233b of the LC which specifies the necessary legal requirements for such an internship. The following conditions must be fulfilled simultaneously in order to conclude an employment contract for an internship: the intern must have completed secondary or higher education with a trade or vocation; the position and work to be performed by the intern during the internship must correspond with his/her qualifications; the intern should not have acquired any previous work experience and worked for other employers in the trade or vocation for which the internship is agreed; contracts of employment for internships may be concluded only with persons under the age of 29.
  • Internship contracts may be concluded for at least six months and not more than 12 months. Internship /contracts may be terminated by either party with 15 days' notice. Another important point is that the termination of a contract of internship is not covered by the protection against dismissal regulations under Art. 333 of the Labour Code. The internship contract is an employment contract so that the National Revenue Agency (NRA) must be notified accordingly. For this purpose, some amendments were made to Ordinance №5 with regard to the content and procedure for submitting notification under Art. 62, para. 5 of the Labour Code. A new code (16) has been added as grounds for concluding the employment contract, which applies specifically to contracts for an internship.
  • In 2015, one of the most discussed changes was the introduction of an option for employers to stipulate flexible working hours. According to paragraph 3 of Art. 139 LC, if an employee/worker works less than the normal daily working hours on one day, they may work longer than the mandatory working hours on another later day in order to make up for the hours lost. Before this change, such flexibility was achieved by introducing the so-called summarised calculation of working time Art. 142 (2) LC. Since the reporting of working hours depends on the regulations in a company’s internal labour policy, these regulations have to include flexible working time limits in accordance with the modification.
  • One-day employment contracts The amendments to the Labour Code (LC) (adopted by parliament on 2 July 2015) introduced one-day contracts for the first time (Art. 114a LC). The scope of this provision is limited. One-day contracts may only be concluded for activities in the agriculture sector for harvesting fruit, vegetables and roses in jobs that require no special training of workers. Such a contract can be concluded only between a worker and a registered agricultural producer. Any person will be able to conclude such contracts, whose total length must not exceed 90 days annually. An important feature of such contracts in terms of social insurance issues is that the social insurance contributions are not paid for all risks, for example sickness risks or maternity leave; moreover, unemployment is excluded. Furthermore, the time spent in employment under such contracts is not recognised as work experience, in terms of length of service, additional payment for seniority etc.
  • According to the government, the one-day labour contracts are expected to increase the revenues of the State Social Security Budget (SSSB) by up to BGN 19.2 million (EUR 9.84 million), as well as BGN 5.3 million (EUR 2.71 million) in revenues from taxes on personal income. The General Labour Inspectorate (GLI) registered 67,539 of these new contracts in the two-month period after the amendments of the LC came into force.
  • Amendments and supplements to the LC in 2016 introduced new grounds for dismissal, namely eligibility for reduced pension (Art. 68a, Social Security Code, SSC), if the employment came about after the employee received a reduced pension on reaching retirement age (Art. 68a of SSC). These amendments were criticised by trade unions, as they affected the rights of retired people to work and as some employers tried to use this to force some workers to retire before they reach retirement age or before they wish to do this. The employers portrayed this as fostering stronger incentives to hire young workers, but the trade unions doubt whether the measure will increase employment of young people.
  • In 2016 a Law for labour migration and labour mobility was prepared and passed by the Parliament, with further amendments made in 2017 and 2018. The law deals with regulation of the access and standards for employment of workers from third countries. Also, some regulations concerning issues of employment and mobility of EU/EFTA/Switzerland citizens were put into the law, as well as the issue of mutual agreement with ‘third countries’ on employment in Bulgaria and employment of Bulgarian citizens in those countries.

Training

  • In 2014 legislative changes introduced dual vocational training in Bulgaria. Dual education enables pupils to learn a job by completing an apprenticeship, which combines theory with vocational training, so that young people can earn money for their work. Employers will have a say with regard to the training timetable. According to the ministry of education, these measures should reduce the number of pupils who drop out of school for social and economic reasons. This system was first implemented in 2015. However, the extent to which it is implemented depends on whether the vocational training colleges succeed in signing contracts with corresponding companies.
  • On 15 September 2015, the first dual training courses began at two vocational training colleges - Vocational Training College of Food Technology ‘Prof. Dr. Georgi Pavlov’ in Sofia and Vocational Training College ‘Ivan Hadzhienov’ in Kazanlak, based on experience gained in Switzerland. This project pursues the development of a sustainable Bulgarian system where the vocational education provided at the colleges is closely linked to the demands of the workplace. In 2016-2017, dual vocational training will be offered in 19 new colleges.
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