Both the employer and the employee have the right to end the employment relationship under the Bulgarian Labour Code. An employer, on the other hand, can only cancel a contract on exhaustive grounds. It is crucial to note that Bulgarian labor law contains specific requirements for the termination of an employment contract by the employer, which must be followed by the letter. The termination of the contract must be done in writing.

An employer may terminate the employment contract by giving the employee a written notice in the following cases:

• upon closure of the enterprise or part of the enterprise;
• upon staff reduction;
• upon reduction in the volume of work resulting in a decrease in the number of employees;
• upon idling for more than 15 working days;
• where the employee lacks the capacity for efficient execution of the work;
• where the employee does not possess the educational level or professional qualification required for the work executed;
• upon change of the job description and the employee no longer satisfies the said requirements;
• where the position occupied by the employee must be vacated for reinstatement of a wrongfully dismissed employee, who previously occupied the same position.

Severance

For dismissals on particular grounds, the statutory maximum severance payment is one month’s salary (e.g. closure of the establishment, partial closure of the establishment, staff cuts, etc.).

If an employee has worked for at least five years and has not earned such severance compensation in the previous five years, the employee is entitled to two months’ income for dismissal owing to incapacity or health hazard.

Two months’ income if an employee’s employment contract is terminated for any reason after he or she has attained the required retirement age and length of service. If the employee has worked for the last ten years with the same employer, the severance pay amounts to six months’ salary. Such severance payment shall be due only once.