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:
- Article 220 severance (pay in lieu of notice): Gross salary for the unexpired notice period where the employer elects not to require the employee to work through notice.
- Article 222(1) — specified economic grounds: Gross remuneration for actual unemployment for up to one month, unless a more favourable applicable rule or agreement extends the period; a lower-paid new job may entitle the employee to the difference.
- Article 222(3) — pension entitlement: On termination after acquiring entitlement to an old-age and insurance-service pension: two gross monthly salaries, or six where ten years of service with the same employer or group of undertakings were accumulated during the preceding twenty years. This compensation is payable only once.
- Article 224 — unused paid annual leave: Compensation on termination for unused paid annual leave whose entitlement has not expired, calculated under Article 177.
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.