Labour Law · 25 June 2026 · 10 min read

Termination of Employment Contracts in Bulgaria: Grounds, Procedure, and Remedies

The termination of an employment relationship in Bulgaria is governed by an extensive and highly prescriptive statutory framework under the Labour Code. This article examines the principal grounds for termination available to the employer, the mandatory procedural requirements attaching to each, the notice and severance obligations, the protected categories of employee, and the remedies available to an employee whose dismissal is found to be unlawful.

I. The Legislative Framework

Employment termination in Bulgaria is regulated primarily by Part Four of the Labour Code (Кодекс на труда, КТ), which establishes an exhaustive list of grounds upon which an employment contract may be terminated, the procedural requirements applicable to each ground, and the legal consequences of termination. The Code is supplemented by the implementing regulations, the case law of the Supreme Court of Cassation, and — where the employer is a commercial entity — relevant provisions of the Commercial Act governing the liability of managers and members.

A fundamental principle of Bulgarian labour law is that the grounds for termination are numerus clausus: an employer may terminate an employment contract only on a ground expressly provided by the Labour Code, and only in compliance with the prescribed procedure. Any deviation from the statutory procedure — including a failure to observe the correct notice period, to issue a written dismissal order, or to comply with the prior consultation or approval requirements applicable to protected employees — renders the termination unlawful and exposes the employer to reinstatement orders and compensation claims.

II. Principal Grounds for Termination by the Employer

Termination with notice

The most common ground for employer-initiated termination is the dismissal with notice under Article 328 of the Labour Code. This provision sets out a catalogue of objective grounds, including: closure of the enterprise; reduction in workforce (съкращаване на щата); reduction in the volume of work; suspension of work for more than fifteen working days; the employee's lack of the required professional qualifications or educational credentials for the position; the employee's unsatisfactory performance as assessed through objective criteria; and, for managerial positions, a change in the requirements for the role.

Termination with notice does not require the employee's fault or consent. However, the employer must demonstrate that the stated ground genuinely exists and applies to the specific employee. Courts scrutinise workforce reduction dismissals with particular care: the employer must establish that the position has been genuinely eliminated, not merely renamed or transferred to another employee, and must apply objective selection criteria where multiple employees hold the same or comparable positions.

Termination without notice — disciplinary dismissal

Disciplinary dismissal under Article 330(2)(6) is the most severe disciplinary sanction. Article 190 includes absence on two consecutive working days, systematic disciplinary violations, abuse of the employer’s trust, disclosure of confidential information and other serious breaches. The sanction must also satisfy Article 189’s proportionality criteria; prior sanctions do not by themselves automatically justify dismissal.

Before a disciplinary sanction, the employer must hear the employee or receive their written explanations and assess the evidence (Article 193). The Code does not universally require a written invitation. Failure to obtain explanations normally leads to annulment without examining the merits, except where the failure is attributable to the employee. Article 194 generally allows two months from discovery and one year from the violation, subject to its special starting rules and suspension periods.

III. Notice Periods

The statutory notice periods applicable to terminations under Article 328 depend on the type of employment contract. For employment contracts of indefinite duration, the minimum notice period is thirty calendar days, unless a longer period — up to three months — has been agreed in the employment contract or applicable collective agreement. For fixed-term employment contracts, the applicable notice period is three months, but not exceeding the remaining term of the contract.

The employer may elect to pay the employee wages in lieu of notice — a payment of the gross salary that would have been earned during the notice period — in place of requiring the employee to work through the notice. This payment in lieu does not affect the employee's entitlement to any applicable severance payment.

IV. Severance Entitlements

Bulgarian law provides for several categories of statutory severance payment, the applicability of which depends on the ground for termination and the length of the employment relationship. The principal entitlements are as follows:

V. Protected Categories of Employee

Article 333 sets out prior protection against dismissal, including safeguards involving the Labour Inspectorate (Инспекция по труда). The category of employee, proposed dismissal ground and any applicable collective agreement must be checked individually; protection does not take the same form in every case.

Article 333 provides different safeguards depending on the employee’s category and the dismissal ground. Some cases require prior Labour Inspectorate permission or trade-union consent; others restrict the grounds on which dismissal is possible. Pregnant employees and employees on leave under Article 163 have specific rules. If legally required prior permission or consent is missing, the court annuls the dismissal under Article 344(3) on that ground without examining the merits; this is not automatic nullity.

VI. Wrongful Dismissal: Remedies

A claim challenging termination must be brought within two months of the date the employment relationship ends (Article 358). Under Article 344, the employee may seek annulment, reinstatement, compensation and correction of the recorded termination ground. Compensation under Article 225(1) covers unemployment caused by the unlawful dismissal for up to six months; Article 225(2) addresses lower-paid employment. The requirements for each remedy must be established.

Following a final judgment granting reinstatement, Article 345 generally requires the employee to report for work within two weeks of receiving the reinstatement notification, unless there is a justified reason for missing that period. A first-instance judgment does not automatically make reinstatement immediately effective. If the reinstated employee reports but is unlawfully refused admission, Article 225(3) provides compensation based on gross remuneration from reporting until actual admission, not a fixed additional six-month payment.

Disclaimer: This article is intended as general legal information only and does not constitute legal advice. Readers are encouraged to seek independent legal counsel tailored to their specific circumstances.

Frequently asked

Can my employer dismiss me simply because they no longer want me in the role?

No. The grounds for termination are numerus clausus: an employer may dismiss only on a ground expressly provided by the Labour Code and only in compliance with the prescribed procedure. The dismissal-with-notice grounds under Article 328 include closure of the enterprise, workforce reduction, reduction in the volume of work, suspension of work for more than fifteen working days, lack of the required qualifications, and unsatisfactory performance assessed on objective criteria.

What steps must an employer follow before dismissing someone for misconduct?

Before a disciplinary sanction, the employer must hear the employee or receive their written explanations and assess the evidence (Article 193). The Code does not universally require a written invitation. Failure to obtain explanations normally leads to annulment without examining the merits, except where the failure is attributable to the employee. Article 194 generally allows two months from discovery and one year from the violation, subject to its special starting rules and suspension periods.

How much notice am I entitled to before my job ends?

For employment contracts of indefinite duration the minimum notice period is thirty calendar days, unless a longer period of up to three months has been agreed in the contract or an applicable collective agreement. For fixed-term contracts it is three months, but not exceeding the remaining term. The employer may pay gross salary in lieu of notice instead, which does not affect any applicable severance payment.

What money am I owed if my position is made redundant?

For the grounds listed in Article 222(1), including redundancy, closure and reduced work volume, compensation covers actual unemployment for up to one month, unless a Council of Ministers act, collective agreement or employment contract provides a longer period. A lower-paid new job may give entitlement to the pay difference for that period. Pay in lieu of notice under Article 220 and compensation for unused paid annual leave under Article 224 may also be due.

What happens if I believe I was dismissed unlawfully — how long do I have to act?

The two-month limitation period for challenging termination runs from the date the employment relationship ends (Article 358 of the Labour Code). Check the termination date, notice and service documents together; do not assume the date printed on the order or its delivery date is always the starting point. Seek advice promptly rather than waiting for the deadline. Following a final judgment granting reinstatement, Article 345 generally requires the employee to report for work within two weeks of receiving the reinstatement notification, unless there is a justified reason for missing that period. A first-instance judgment does not automatically make reinstatement immediately effective. If the reinstated employee reports but is unlawfully refused admission, Article 225(3) provides compensation based on gross remuneration from reporting until actual admission, not a fixed additional six-month payment.

I am pregnant — does that mean I cannot be dismissed at all?

Article 333 provides different safeguards depending on the employee’s category and the dismissal ground. Some cases require prior Labour Inspectorate permission or trade-union consent; others restrict the grounds on which dismissal is possible. Pregnant employees and employees on leave under Article 163 have specific rules. If legally required prior permission or consent is missing, the court annuls the dismissal under Article 344(3) on that ground without examining the merits; this is not automatic nullity.

About the author

Lachezar Vesov — Attorney at Law, Sofia

Admitted to the Sofia Bar Association in 2016 (reg. no. 1400697210). Practises in civil, corporate, administrative, banking and criminal matters, advising Bulgarian companies and municipal enterprises alongside foreign founders, investors and property buyers. Member of the Board of Directors of the National Palace of Culture, Sofia, and Chairman of the Appellate Commission of the Bulgarian Football Union’s Sofia Zonal Council.

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