Delchev & Partners

Changes Enhancing the Protection of Employees against Unlawful Non-payment of Employment Remunerations and Compensations by the Employer

In State Gazette № 102/22.12.2017 important changes were promulgated in a number of legal acts which aim at a more effective protection of employees against unlawful delay and non-payment of employment remunerations and compensations by the employers, as well as at the prevention of employers’ practices for evading such payments. Most of the changes enter into force on 22.12.2017.

Changes to the Labour Legislation

• Introducing a deadline for payment of compensations in cases of employment agreements termination

The employer shall be required to pay the compensations owed to the employees in cases of termination of the employment agreement no later than the last day of the month following the month during which the agreement is terminated. Failure to pay in time results in additional liability for statutory interest.

• Mandatory instructions by the labour inspectorate control bodies

The “General Labour Inspectorate” Executive Agency (“GLI”) shall be entitled to give mandatory instructions to employers for payment of outstanding employment remunerations and termination compensations. A copy of the instructions is to be provided to the employee upon his request. The instructions can be provided by GLI until the time the employee files a claim before the court.

• More favourable provisions regarding the employees’ right to guaranteed receivables in the event of employer’s insolvency

Further to the changes the receivables of current and former employees of insolvent employers shall be guaranteed regardless of when their employment agreement has been terminated. The period serving as a basis for calculation of the guaranteed receivables is increased from 12 to 36 calendar months prior to the registration of the resolution for the insolvency proceedings opening.

Changes to the Civil Procedural Code

Under the previous procedure, in order to obtain an enforcement title against the employer, the employee had to sue the employer and have him ordered by the court to pay any outstanding remunerations and compensations. Pursuant to the new rules the mandatory enforced instructions of the GLI to the employer for payment of any outstanding amounts under an employment agreement which have been delayed more than two months will be considered grounds for issuing an immediate payment order and a writ of execution. Given also that any objection by the employer to the payment order shall not suspend the execution proceedings, unless he provides sufficient collateral for the employee, the execution proceedings against the employer become a lot faster and easier.