Layoff in Bulgaria

Bulgarian companies have the possibility to dismiss an employee for such reasons such as:

• The cut of a job as a consequence of a decline in the company's activity.
• Or the closure of the company;
• Or a disciplinary reason (an employee who does not respect the procedure in force in the company for example).

Companies that choose to lay off employees are under the cumulative obligation to:

• Respect and pay the notice period agreed between the parties in the employment contract. This notice is usually from1 to 3 months;
• Pay additional compensation equal to one month's salary if the employee has not found, at the end of his notice period, a job equivalent to that for which he was dismissed.
• Pay additionally for paid leave that has not been taken.

An employee who considers that the reasons for his dismissal are unfair or unfounded can go to court and obtain compensation.

This is why, as an alternative to dismissal, and in order to curb legal uncertainties, it is usual for Bulgarian companies that want to separate from one of their employees to sign a settlement agreement with him/her at the end of the employment contract which contractually regulates all aspects linked to the end of the employment relationship: effective date, compensation, etc.