What measures can employers implement under the State of Emergency Act?

23.03.2020

The newly adopted Measures and Actions during a State of Emergency Act (the “Act”) introduces some changes to the Bulgarian Labor Code as well. Those amendments facilitate employers as they provide employers with some options to adapt their businesses in order to manage the COVID-19 outbreak. The amendments will enter into force following the promulgation of the Act in the Bulgarian State Gazette in the course of this week.

The Act empowers employers to unilaterally implement for the employees the “work from home” option. This is a simplified approach as currently the signing of an annex to the employment agreement is required. Respectively, now employees have to consent to work from home. The Act now allows employers to issue a mandatory order for all or some of their employees and oblige them to work from home for some time.

The Act broadens the employers’ right to use some alternative options that may ease the challenges businesses are facing, including the increased expenses at a time of decreased productivity.

Employers are now allowed to introduce part-time work for their employees and this process will not require consultation procedures with the employees. While there is a state of emergency, the employer will unilaterally with an order decrease the employees’ working hours. The limitation that part-time work can only be applied for period of up to three months in one calendar year will not apply during the state of emergency.

There are two new options envisaged for employers to unilaterally impose on the employees the use of paid leave during the state of emergency.

  • When the employer continues to operate and has implemented the work from home option, it may impose on the employees the use of up to half of the employee’s paid annual leave. As the Act does not say otherwise, the calculation of “half” of the leave is to be made on the basis of the employee’s entitlement under his employment contract (generally, this will mean up to 10 days) and not half of the unused paid leave for the particular employee;
  • When the employer temporary closes operations on its own initiative or at the order of a government authority, the employees may be obliged to use the full amount of their paid annual leave.

Employers are still prohibited to unilaterally impose the use of unpaid leave on their employees.  

The Act introduces a new category of protected employees who may not be refused a request to use paid or unpaid leave during the state of emergency. The rule applies to pregnant employees and employees in an advanced stage of in-vitro treatment; single parents whose children have not attained the age of 12 years or whose children have disabilities; employees who are under age; employees who are with 50 or higher percent of disability; employees who suffer from certain diseases (such as diabetics, ischemic heart disease, etc.).

The Act does not explicitly prohibit, as was publicly discussed, any trainings and business trips in Bulgaria and abroad. Therefore, employers may lawfully send their employees on business trips. Yet, employers are to evaluate the risks associated with such trips and to take into account any restrictions imposed by the Bulgarian state and other countries.

The employer has to pay the employees the full amount of their gross remuneration while the latter are idle due to the temporary close of business. This obligation will apply both in cases where the employer closed the business operations on its own discretion and when there was an order of a state authority to do so (as is currently with the operation ban imposed on restaurants, bars, malls, etc.).

The Act provides for the payment of a financial aid to employees who will be otherwise made redundant. The amount of the aid will be 60 percent of the employee’s social insurance income for January 2020 (i.e. the amount over which social insurance contributions were paid). The aid will be transferred to the employer’s bank accounts and the latter will be responsible to pay the employee’s full remuneration. This new measure will apply for the period of the state of emergency but not longer than three months. The Bulgarian Council of Ministers will additionally implement specific rules for the allocation of the financial aid resources.

The amendments reviewed above will apply until the explicit revocation of the state of emergency in Bulgaria by a decision of the Bulgarian Parliament.

For further information contact:

Ilya Komarevski, partner
Ilya.Komarevski@tbk.bg

Mileslava Bogdanova-Misheva, senior associate
Mileslava.Bogdanova@tbk.bg