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Termination and Severance Policies

Learn about the legal processes for employee termination and severance in Bulgaria

Notice period

In Bulgaria, the Labour Code (LCB) outlines the legal requirements for notice periods during employment termination.

Contractual Notice Period

The employment contract can specify a notice period for termination. This notice period must be the same for both the employer and the employee to ensure fairness.

Statutory Minimum Notice Period

If the employment contract does not mention the notice period, statutory minimums apply based on the employee's position and length of service. The minimum notice period is as follows:

  • Employees with managerial positions or positions requiring special qualifications: 3 months
  • All other employees who have worked for the employer for over 2 years: 1 month
  • All other employees with less than 2 years of service: 30 days


The Labour Code provides exceptions for specific termination scenarios, allowing for shorter notice periods under certain circumstances. These exceptions include:

  • Termination due to employee misconduct
  • Termination due to employer's redundancy
  • Mutual termination by agreement

Severance pay

Severance pay entitlements in Bulgaria are primarily governed by the Bulgarian Labour Code.

Circumstances for Severance Pay

In Bulgaria, there are several circumstances under which an employee is entitled to severance pay. These include:

  • Liquidation or Reduction of Workforce: If an employee is dismissed due to the closing of the enterprise, a part of it, or downsizing, they are entitled to severance pay.
  • Disability or Health Hazards: An employee dismissed due to a work-related disability or a health hazard that endangers them is entitled to severance pay if they have worked for a minimum of five years.
  • Retirement: Severance pay is due to an employee upon reaching the required retirement age and length of service.
  • Mutual Termination Agreement: Employer and employee can mutually agree to terminate the contract. In this case, the employer must pay compensation of no less than four times the employee's gross salary.

Severance Pay Amounts

The amount of severance pay an employee is entitled to depends on the circumstances of their dismissal:

  • Liquidation, Workforce Reduction, Occupational Disability/Hazard: The employee receives a minimum severance of one month's gross salary.
  • Retirement:
    • Two gross month's salaries if the employee has not yet received severance pay within the last five years.
    • Six gross month's salaries if the employee has worked with the same employer for at least ten years.

Other Considerations

Upon termination, employees must also receive compensation for any unused paid annual leave.

Termination process

The termination of an employment relationship in Bulgaria is strictly governed by the Bulgarian Labour Code. There are several ways in which a contract can be terminated:

Termination by Mutual Agreement

Both the employer and employee may agree to end the employment contract at any time. This agreement must be explicitly put in writing.

Termination with Notice

Both employer and employee can initiate termination by providing written notice. The reasons for employer-initiated termination are specific and outlined in the Labour Code.

Termination Without Notice

The Labour Code (Article 327) provides specific instances where an employee can terminate the contract without notice. These include non-payment of wages/salary, employer failing to provide safe working conditions, and employer changing essential terms of the contract. Employer-initiated termination without notice is permitted only in cases of severe disciplinary breach by the employee (gross misconduct).

Key Considerations for Employers

Employers must have a justifiable reason from the list laid out in Article 328 of the Labour Code for termination. Common reasons include company closure or restructuring, reduction in workload, and poor employee performance (with documented evidence).

Important Notes

Employees under special protection (e.g., pregnant women, those on parental leave) have additional protection against termination.

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