Legal review of the amendments in employment and social security legislation as a result of the adoption of the new Act on the Measures and Actions during the State of Emergency, proclaimed by Decision of the National Assembly dated 13th March 2020

As a result of the state of emergency proclaimed throughout the Republic of Bulgaria for the period 13/03/2020 – 13/04/2020 by Decision of the National Assembly of the Republic of Bulgaria dated 13th March 2020, a new Act on the Measures and Actions during the State of Emergency, Proclaimed by Decision of the National Assembly dated 13th March 2020 (“the Act”) has been adopted and promulgated in the State Gazette, Copy 28 dated 24th March 2020.  

The adoption of the Act leads to several amendments and supplements in main Bulgarian laws, including in the Bulgarian Labour Code and the Social Security Code.

Subject of the present review and analysis shall be the last amendments adopted in the employment and social security legislation as a consequence of the state of emergency proclaimed and the adoption of the Act.

I. Amendments in Labour Legislation

  • Remote Form of Work or Work From Home

One of the amendments in the Bulgarian Labour Code provides for that the employer may, upon state of emergency proclaimed, without the consent of the worker or employee, to assign temporary the performance of remote form of work and/ or work from home. In this case only the place of work shall be changed, without changing the other conditions of the employment contract. The change shall be implemented by Order of the employer, stipulating the conditions for the performance of remote form of work or work from home.

The above amendment is in line with the provisions of Order No. RD-01-124/13.03.2020 of the Minister of Health, effective for the period 13/03/2020 – 29/03/2020, whereby all employers, depending on the specifics and the capabilities in regards to the relevant labour activity, shall implement remote form of work for their employees. Where the latter is not possible, the employers shall organize the implementation of enhanced anti-epidemic measures at the working premises, including filters, disinfection and air ventilation, training for keeping a good personal hygiene, as well as shall not allow the presence of any employees or other individuals who display symptoms of acute infectious diseases.

  • Suspension of Work during State of Emergency

Another right provided to employers in the conditions of state of emergency is that the employer may suspend by Order the work of the enterprise, of part of the enterprise or of individual workers or employees at its own discretion for the whole or part of the period of the emergency until its revocation.

In the cases where the work of the enterprise or part of it has been suspended by Order of state authority, the employer shall be obliged not to allow the access of workers and employees to their working places for the whole period specified in the respective Order.

For the period of the suspension of work, the worker or employee is entitled to receive his gross labour remuneration.

  • Implementation of Part-time Work by the Employer

Another supplement in the Labour Code provides for that for the whole period of the state of emergency or for part of it, the employer has the right to implement in the enterprise or in a separate department a part-time work for workers and employees who are occupied for a full-time work.

Prior to the said supplement, а part-time work could be established unilaterally by the employer only in the event of reduction of the volume of work, for a period of up to three months for one calendar year and after a prior agreement with the representatives of syndicate unions and the representatives of the employees under Art. 7, para. 2. of the LC[1].

In both provided cases for implementation of part-time work by the employer, the duration of the working time could not be less than half of the statutory one for the period of the calculation of the working time.

  • Use of Leave During State of Emergency

In the cases where due to state of emergency the work of the enterprise, part of it, or of individual workers or employees, has been suspended by Order of the employer or by Order of state authority, the employer has the right to provide the worker or employee using  up to one half of the annual paid leave without their consent, event to worker or employee who has not acquired 8-month labour service.

Furthermore, the Labour Code stipulates an obligation for the employer to allow the below employees the use of their annual paid leave or unpaid leave, upon their request, namely:

– pregnant female employees or in advance stage of invitro treatment;

– mother or adopter of child up to 12 years of age or disabled children regardless of the latter’s age;

– worker or employee who is sole father or adopter of child up to 12 years of age or disabled children regardless of the latter’s age;

– worker or employee who have not reached 18 years of age;

– worker or employee with permanently reduced work capacity of 50 or over 50 %;

– worker or employee who has protection rights under Art. 333, par 1, item 2 and 3 of the LC[2].

The period during which the leave is used in accordance with to the above cases shall be acknowledged as labour service.

II. Amendments in Social Security Legislation

  • Suspension of the Statutory Terms

The first important amendment in the area of the social security legislation is related with the suspension of all statutory terms, provided for the secured persons and pensioners, in terms of payment of monetary social compensations (social compensations for temporary disability and reassignment, maternity, unemployment) for the period of the state of emergency.

That means that all statutory terms for submission of applications, provision of information and documents, etc., by the secured persons and pensioners shall not run during the emergency.

All documents submitted by the secured persons and the pensioners within 14 days after the revocation of the state of emergency at the respective territorial department of the National Social Security Institute shall be considered submitted within the statutory term.

Next, it is provided for that not pronouncing by the officials on any requests for granting, amendments, suspension, termination of payments of social compensations for unemployment, as well as for payment of pensions, for the duration of the emergency shall not be considered as a tacit refusal.

  • Governmental assistance to Employers at the amount of 60 % of the insurance income

Another important amendment in the Social Security Code provides for that during the state of emergency, but for a period not exceeding three months, the National Social Security Institute shall transfer 60 percent of the amount of the insurance income for January 2020 for employees by insurers meeting the criteria established by Decree of the Council of Ministers.

The funds shall be transferred by bank to the respective insurer within 5 working days on the basis of written information provided by the Employment Agency. The funds shall be at the expense of the Unemployment Fund of the State Social Security.

In case the insurer fails to pay the full amount of the remuneration to the employees for whom the funds have been received, then the employer shall be obliged to reimburse the receipt funds.

Up to the present moment there has been drafted and proposed for adoption a Bill for Decree of the Council of Ministers on the Conditions and Order for Payment of Compensations to Employers.

According to the Bill, only employers who fulfill the following cumulative conditions may apply for compensation:

a) Employers who are local natural persons or legal entities, as well as foreign companies having activity in Bulgaria;

b) Employers, where in the month prior to the declaring the state of emergency, more than half of their employees are employed in sectors for which a prohibition or restriction of activity has been imposed for that period. The activities for which a prohibition has been imposed are listed in an annex to the Decree, namely:

– Retailers in malls, excluding food, beverage and cigarette dealers

– Different types of passenger transport

– Hotels and similar accommodation

– Tourist and other short-term accommodation

– Fast food restaurants and establishments

– Drinking establishments

– Movie projection

– Travel agency and operator activity; other travel and booking activities

– Artistic and creative activity

– Other activities in the area of culture

– Sports and other recreational activities

– Maintenance of good physical condition.

c) At least half of the staff list has stopped working by the respective order for the suspension of the activity;

d) Employers have no obligations to the state or the municipality for taxes and compulsory social security contributions, as well as interest on them;

e) Employers have not been declared insolvent or are not in insolvency or liquidation proceedings;

f) During the compensation period the employers are not receiving financing from the state budget, European Social Fund or other public funds for the employment of the employees whose activity has been suspended;

g) Keep the respective employees at work for at least 3 months after receipt of the compensation;

h) During the compensation period the employers do not dismiss employees due to: closure of the enterprise or part of it, redundancy, reduction of work volume and suspension of work for more than 15 days;

i) In the last six months a violation of the labor contract, the obligation to notify the NSSI, the maintenance of payroll records, the payment of remuneration and benefits under the Labor Code, etc., has not been established by a penal decree or court ruling.

Given the above, it is evident that only the employers the activity of which has been suspended as a result of prohibition or restriction provided for in governmental act are entitled to apply for compensation. Employers which activity has been suspended at their discretion shall not apply and receive the said compensation.

The applications for payment of the compensations shall be submitted to the Employment Office at the place of work of the respective employees for whom a compensation is requested, by an application in a form approved by the Executive Director of the Employment Agency. The application and the documents enclosed shall be examined within 7 days as of the submission, as the declared circumstances shall be verified ex officio by the NRA and the Labour Inspectorate.

Employer who has received compensation, shall pay for the period concerned to the respective workers and employees the total amount of their gross labour remuneration. That means that 40 % of the due remuneration, other than the received 60 % compensation, shall be paid by the employer at its own expense.

Against the receipt of the compensation, as stated above, the employer shall be obliged to keep at work the respective workers and employees for whom compensations have been received, including up to three months after the payment completion. In the event the said obligation of the employer has not been observed, the employer shall be obliged to reimburse the sums received together with interest accrued as of the receipt date until the final payment.

  • Electronic Submission of Documents

During the state of emergency all applications, appeals and other documents related to social compensations, benefits and pensions shall be submitted electronically in accordance with the Electronic Document and Electronic Certification Services Act or with a personal identification code or on paper through a licensed postal operator. This means that documents cannot be filed personally on site at the National Social Security Institute.

III. Amendments Related with the Expiry of Long-term Residence Permits of Foreigners during the State of Emergency

We would like to outline also а very important amendment in the Foreigners in the Republic of Bulgaria Act related to the expiry of the long-term residence permits of the foreigners in Bulgaria. In the cases where long-term residence permits of a foreigner expires during the period of the emergency, the foreigner shall be entitled to submit application for prolongation of the permit within 14 days after the revocation of the emergency. The period of the state of emergency shall not be considered as suspension in the cases where the foreigner submits an application for long-term or permanent residence.

Also, a long-term foreign resident to whom the long-term residence permit expires within the declared state of emergency may enter the territory of the Republic of Bulgaria without a visa within 14 days after the revocation of the state of emergency.

[1] „Employees may, at a General Assembly, elect their representatives to represent their common interests in matters of employment and social security before their employer or before the public authorities. Representatives are elected by a majority of more than two-thirds of the members of the General Assembly.“

[2] „2. Reassigned worker or employee;

 3.  Worker or employee suffering a disease specified in Ordinance of the Minister of Health;”

Author: Stanislava Ivanova, Attorney-at-law at Dyulgerova & Penkova Law Firm