In a decision that is good news for Bulgarian business, on 11 January 2018 the Supreme Court ruled that companies cannot be the target of civil suits by employees seeking compensation for unlawful dismissal.

Bulgarian companies are liable under the Labour Code for unlawful dismissal suits, but only for claims equalling six months gross remuneration or less. The court ruled instead that dismissed employees claiming compensation in excess of six months wages or salary (ie more than the Labour Code limit) must seek civil damages directly from the individual manager responsible. 

Supreme Court Resolution No 343 solved a longstanding question: just who is liable under Bulgarian civil law for damages in cases of employee’s unlawful dismissals? Was it the employer (company) or the individual (manager) who did the firing?

Until this ruling, the law seemed to cut both ways.

Article 49 of the Bulgarian Obligations and Contracts Act (OCA) suggested that the company is liable. OCA article 45, however, placed liability in the hands of the individual manager.

The size of damages varied. Under the Bulgarian Labour Code, a dismissed employee who has been unemployed for six months or less is entitled to compensation equalling his remuneration for the period he/she has been out of work.

If an unlawfully dismissed employee was unemployed for longer than six months, the damages exceeded the maximum amount provided by the Labour Code, entitling the wronged employee to make claims under civil law.

The court based its ruling on a determination that a company could not be assessed damages more than the limits specified by the Labour Code.

For practical purposes, this means that for damages equal to six months wages or less, an employee can lodge a dispute against the company under labour law. For damages amounting to the difference exceeding a six-month wage or salary, however, a dismissed employee’s only recourse is to file civil suit against a manager.

This ruling relieves Bulgarian businesses of a major liability, and protects large corporation from vicious and onerous civil litigation.

The court has endorsed a strict interpretation of labour law, and the Bulgarian Labour Code limits damages to the equivalent of a reasonable time needed to find a job.