Economic (redundancy) grounds for termination of employment include:

• Partial closing of the employer’s enterprise: dismissal is a result of the termination (but not transfer or distribution to other departments) of the activities of a well-defined and separate structural unit of the enterprise.
• Elimination of job positions: a certain number of the total number of positions are eliminated. Unlike the partial closing, however, the economic activity continues but is performed by a fewer number of employees.
• Decrease of workload: whatever the reason for the decreased workload, the employer is entitled to reduce the number of employees in certain organisational units or in the whole company pro rata.
• Suspension of work (idle time) for more than 15 business days also gives grounds to the employer to terminate employees who are affected by the idle time.

The process involves the following steps:

• Step 1: Corporate resolution. The competent corporate body of the employing entity should pass a resolution acknowledging the existence of the respective termination ground (eg, closing the specific unit, eliminating certain positions from the schedule of positions).
• Step 2: Evaluating the need to select among employees and conducting a selection process (except for termination resulting from idle time). If the position to be eliminated is identical or similar to other existing positions in the employer’s enterprise, the employer should conduct a mandatory selection process among the employees occupying such positions based on their: (i) qualification; and (ii) productivity (other criteria are not allowed).
• Step 3: Evaluating prospective protection entitlement (except for termination resulting from idle time). Irrespective of any prior information on the matter, an employer must – at the time of and before serving the termination notice – examine the employee’s entitlement to protection against dismissal.
• Step 4: Serving written termination notifications to the affected employees.
• Step 5: Issuing documents certifying the fact of termination and other facts of employment (eg, termination order, certified labour book).
• Step 6: Reporting of the fact of termination. Please see question 16.

If the redundancy is classified as collective, it requires additional procedural steps (which are of administrative nature and their non-compliance may be financially sanctioned but may not serve as grounds for reversal of the individual dismissals). Collective redundancies are defined as the dismissal by the employer, for reasons not related to the individual employees concerned, over a period of 30 days of:

• at least 10 employees in enterprises that employed between 21 and 99 employees during the month preceding the dismissals;
• at least 10% of employees in enterprises that employed between 100 and 299 employees during the month preceding the dismissals; and
• at least 30 employees in enterprises that employed 300 or more employees during the month preceding the dismissals.

Employers are obliged to inform and consult with their employees on various matters, such as (but not limited to) anticipatory measures, in particular where there is a threat to employment (eg, dismissals). If the measures envisaged would lead to collective dismissal, the collective notification and consultation with employees must follow specific rules. Consultations must be carried out with any trade union that has members among the employees concerned and with employee representatives, where these have been elected. There is no requirement for reaching an agreement.

In addition, notifications on the anticipated collective redundancy must be submitted to the Bulgarian Employment Agency. See question 6.

No.

Employers are obliged to commence consultations with the employees’ representatives and trade unions represented at the enterprise (together, the Employees) no later than 45 days before the individual dismissals commence.

Prior to such consultations, the employer should provide the Employees with written information with minimum statutory contents. Within three business days of delivering the said information to the Employees, the employer must send a copy to the Bulgarian Employment Agency.

After the end of consultations (but not later than 30 days before the first individual dismissal date), the employer should again notify the Employment Agency in writing. The notification should comprise the same information as before, and should in addition contain facts about the consultations held with the Employees. The employer should serve a copy of this notification to the Employees within three business days of its filing to the Employment Agency.

If an employer fails to observe its statutory information, consultation, and notification obligations over collective redundancies, it may be subject to financial penalties (but the individual dismissals performed in line with the process described in question 2 will not be invalidated, although such Bulgarian law position may likely change in the future as a result of recent CJEU rulings that can be interpreted in the sense that dismissals without prior notification are invalid).

One of the mandatory contents of the written information to be provided to the Employees is a description of the reasons for the redundancies. The rationale cannot be challenged by the Employees, but they can submit a statement regarding it to the Employment Agency. However, this cannot obstruct the redundancy.

There is no requirement to consult employees individually. If the employer chooses to individually consult employees, effort must be made to not discriminate in any way.

Yes. Please see question 2.

Employees at various stages of pregnancy and childbirth leave, pregnant female employees, and female employees being in an advanced stage of in vitro treatment cannot be made redundant as a reorganisation measure (unless the employer’s entire enterprise is closed).

Other categories of employees may only be terminated on economic grounds subject to the prior approval of the Bulgarian Labour Inspectorate (requiring in some cases the prior opinion of a special labour expert medical commission):

• female employees who are mothers to children up to three years of age;
• partially disabled employees;
• employees suffering from diseases specified by the Minister of Healthcare;
• employees who, at the time of delivery of the termination instrument, are on permitted leave;
• employees who have been elected to act as employees’ representatives within the term of their mandate;
• employees who are members of a special negotiation body, an European Employee Council, or a representative body of the European commercial company/cooperation, for the term of appointment; and
• employees who are appointed as health and safety representatives, within the term of appointment.

In all events of termination of employment (including redundancies) employees will be eligible to receive the following payments:

• compensation for unused vacation; and
• compensation payable to employees having acquired the right to retire on old-age pension.

Additionally, in case of unilateral termination on redundancy grounds, the employees might become entitled to:

• payment in lieu of notice (PILON) – if the required notice period is not observed; and
• specific unemployment compensation (capped at one month’s salary) – if the employee remains unemployed in the next month following the termination.

The above compensations must be paid no later than the last day of the month following the one in which employment is terminated, unless otherwise agreed upon in a collective bargaining agreement.

• Compensation for unused vacation is due if at the termination date the employee has outstanding vacation entitlement. The amount of this compensation is the gross monthly remuneration received by the respective employee for the last month preceding the one in which the employment is terminated, and during which the employee has worked for at least ten days. This basis is used for calculating the average daily wage, which is then multiplied by the numbers of days of unused leave.
• When termination of employment occurs after the employee has acquired the right to retire on old-age pension, compensation is due in the following amounts: (i) six months’ gross remuneration, if the employee has ten years of service with the same employer or in the same group of undertakings during the previous 20 years; or (ii) two months’ gross remuneration, otherwise.
• PILON: the compensation equals the gross remuneration due for the part of the notification period of which the notice falls short (if any).
• The specific unemployment compensation is equal to the gross wage payable for the period during which the employees have been left unemployed following the termination date, but up to a maximum of one month. If within such a term the employees have been employed but for a salary lower than the one to which they were entitled at the position from which they were released, the employees are entitled to a compensation for the margin lost by them due to the dismissal.

Yes. Please see questions 4 and 6.

There are no such obligations, but the employer must engage in discussions in this regard as part of the consultation process.

Employers must inform the National Revenue Agency (NRA) about the termination of employment by filing a standard notification form for each employee within seven calendar days from the termination date.

If the employee working under a fixed-term agreement is not a citizen of the EU, EEA, or Switzerland, and employment is terminated before the expiry of the fixed term, the employer must notify the Employment Agency and the Migration Directorate within three days from the termination date.

The employee can challenge the lawfulness of the dismissal before the employer or the competent court and claim:

• declaration of the unlawfulness of the dismissal and its annulment;
• reinstatement;
• compensation for the period of unemployment as a result of the dismissal; and
• correction of the grounds for dismissal entered in the labour book or other documents.

Bulgarian law does not allow arbitration in disputes related to employment. Such actions must be personally brought by the employee before the competent court.

This is an optional but recommendable step. Mutual consent termination is procedurally simpler and mitigates the risk of unlawful termination claims.

Based on the statutory timeline applicable to collective and individual dismissal processes (also taking into account the time for internal organisation of the process by the employer, selection process, requesting approvals for protected classes, etc), the process may take around three to four months.

When terminating employment on economic grounds, the employer cannot create new positions with the same or similar duties shortly after – this would create a risk for the dismissals to be deemed unlawful and will entitle the dismissed employees to be reinstated. There is no exact rule on how long the employer must wait before rehiring for such positions, but a reasonably long period in which the economic conditions may change should be applicable (eg, four to six months, to be examined on a case-by-case basis).

Employees are entitled to receive prompt, accurate, and comprehensible information about the employer’s economic and financial situation and matters relevant to their employment. Employees are also entitled to information and consultation rights upon change of employer due to:

• merger of undertakings;
• division of the activities between two or more undertakings;
• the transfer of a distinct part of one undertaking;
• a change in the legal form of the employing entity;
• a change of ownership of the undertaking or of a division thereof; and
• assignment or transfer of business from one undertaking to another, including the transfer of tangible assets.

The corporate restructuring is not conditional on complying with the consultation and information requirements and cannot be blocked by the employees. The employer may face financial penalties for non-compliance.

In all cases of change of employer (see question 21), the employment relationship transfers automatically. The general rules on termination of employment are applicable before and after the transfer of employment.

Employment is transferred by virtue of law without following a specific procedure. However, the specific information and consultation rights of the employees must be observed. Employers are also under an obligation to inform the NRА within ten calendar days from the employee transfer date.

There is no specific requirement for employers to harmonise the transferring employees’ terms of employment with the existing employees’ terms, but such process should take place for anti-discrimination reasons. Employers are prohibited from discriminating against employees, directly or indirectly, in relation to employment on a vast number of grounds.

The possibilities for employers to unilaterally amend employment terms under Bulgarian law are very limited. Hours may be varied (by introducing part-time work for full-time employees), only upon decrease of workload, for a maximum of three months per year.

Other than the very few statutory exceptions that may lead to reduced pay (eg, forced part-time work), unilateral decrease of pay or contractually agreed benefits is not allowed.

Contractual provisions allowing the employer to unilaterally amend employment are invalid.

Generally, no. There is such possibility only regarding fixed-term employment agreements – they may be transformed in indefinite agreements, if the employee continues to work after expiry of the agreed term for five business days or more without a written objection from the employer and provided the position is vacant. This rule also applies to fixed-term employment agreements for the replacement of an absent employee if the agreement of the replaced employee is terminated during the replacement period.

The law enables the employer to vary an employment term in a limited number of cases (assignment to a different position for production necessity for up to 45 calendar days per annum, or during idle periods; temporary part-time work in case of decrease of workload).  

If the employee does not agree to the proposed change (where consent is required), the employer may not vary a contractually agreed employment term unilaterally. The employer may restructure the workforce under the general requirements (and in line with all accompanying restrictions).

Such amendments are invalid and employees may challenge these before courts. Employers are also at risk of sanctions by the General Labour Inspectorate, of amounts up to 10,000 lev.

No legislative changes impacting the above answers are currently in the pipeline, although the following acts are likely to have an impact in the near future:

• CJEU Clarifies Legal Consequences of Collective Redundancies Without Prior Notification

On 30 October 2025, the Court of Justice of the European Union (CJEU) issued two key rulings in Case C‑402/24 [Sewel] and Case 134/24 [Tomann], interpreting the EU Collective Redundancies Directive (98/59/EC). The Court held that an employer may not terminate employment contracts in the context of a collective redundancy before fulfilling the procedural obligations to consult workers’ representatives and notify the competent public authority. A dismissal made before such notification is therefore invalid, not merely irregular or sanctionable. 

This marks a significant shift from the current Bulgarian interpretation, under which collective redundancies carried out without prior consultation or notification to the Employment Agency remain valid but expose the employer to administrative fines. Following the CJEU’s reasoning, Bulgarian courts will now likely have to treat such dismissals as legally ineffective, meaning that affected employees could claim reinstatement or compensation.

Employers in Bulgaria should therefore review redundancy procedures to ensure strict compliance with consultation and notification requirements before issuing any termination notices, particularly in cross-border or large-scale workforce reduction exercises. 

• Revised European Works Council Directive – Implications for Bulgarian Employers

The European Parliament adopted the revised European Works Council (EWC) Directive on 9 October 2025, introducing far-reaching changes to the way EWCs are established and consulted. Member States, including Bulgaria, must transpose the Directive by 2027, with most provisions expected to apply from 2028.

The Directive will primarily affect Bulgarian employers that are part of multinational groups operating in at least two EU/EEA countries and employing at least 1000 employees across the EU/EEA and 150 employees in each of two Member States. These employers may already have and EWC or will be required to establish one once the revised rules take effect. 

Key implications include broader rights to information and consultation on “transnational” matters, now expressly covering the anticipation of change and the management of restructuring processes, transfers of production, mergers, cut-backs or closures of undertakings, and collective redundancies, including in controlled undertakings. Bulgarian subsidiaries will therefore need to factor EWC consultation into project timelines before decisions are taken.

The Directive also revokes exemptions for legacy EWCs, prescribes the member states to introduce monetary sanctions for non-compliance, and increases employer costs by requiring funding for EWC experts, legal assistance, and training. Multinationals with operations in Bulgaria should review existing arrangements and prepare for more structured and potentially lengthier consultation processes in future restructuring exercises.