Draft of the ZID of the Labor Code No. 454-01-16, submitted by Volen Siderov and a group of people's representatives

MR HASSAN ADEMOV

CHAIRMAN OF THE COMMISSION

LABOR, SOCIAL AND DEMOGRAPHIC POLICY

OF THE NATIONAL ASSEMBLY

ABOUT: Draft Law on Amendments and Supplements to the Labor Code,

No. 454-01-16, submitted by Volen Siderov and a group of people's representatives

DEAR MR ADEMOV,

In connection with the draft of the Law on Amendments and Supplements to the Labor Code submitted to us, the Confederation of Employers and Industrialists in Bulgaria expresses the following position:

KRIBB categorically objects to the adoption of the proposed amendments to Art. 245 and the creation of a new Art. 362a of the Labor Code.

The submitted bill to amend and supplement the Labor Code is not supported for the following reasons:

1. The proposed §1 amendments and additions to art. 245 para. 2, para. 3 and para. 4 from the draft law amending and supplementing the Labor Code create conditions for significant uncertainty in the legal world, are not in accordance with the existing principles of law in the Republic of Bulgaria, are not balanced and well thought out. The responsibility of the employer is already detailed in the existing regulations, the current Labor Code and the Commercial Law. The cases of irreconcilability of the transfer transactions carried out during the period of insolvency are also described in detail and there is a significant volume and scope of judicial practice on them.

In § 1 from the draft Law on Amendments and Supplements to the Labor Code ("ZIDKT") through amendment of the text of Art. 245 par. 2 the Labor Code ("CT") provides for the introduction of joint and several liability for the payment of payments due under CT to the worker for the employer, the owners of the legal entity-employer and the officials who were responsible for the management and control of the employer during the accrual periods of obligations. This text, in addition to being unclear (especially with regard to officials, considering that the current legal definition of "official" in the CT, in principle, has a completely different idea of ​​the concept and in another connection), also leads to a complete contradiction to basic principles of law. We believe that the circle of responsible persons outside the employer is unreasonably expanded. Solely responsible for the payment of wages due to the employee should be the employer within the meaning of § 1, item 1 of the Additional Provisions of the Labor Code, with whom the specific worker/employee has concluded an employment contract.

It should be borne in mind that especially in capital trading companies withshareholders do not necessarily have a direct relationship with the management of the enterprise, and they are usually equally affected by the eventual insolvency of the enterprise. It should also not be forgotten that sometimes the owners are persons who participated in mass or workers' privatization.

We believe that the wording "officials who were responsible for the management and control of the enterprise" is extremely imprecise and dangerous in its recklessness. Thus, any accountant or employee in a managerial position who is also an employee of his employer will be liable for obligations to other workers and employees outside that circle. If there is a risk for every manager to be liable for every duty to every worker and employee of every company in which he has ever worked, then what legal certainty does the proposal create? This text violates one of the main principles of European Union law, namely the right to legal protection. It is not clear whether the proposal refers only to the members of the Board of Directors in an AD or the Managers in an OOD.

On the one hand, in relation to capital trading companies, an exception is created from the liability regime of the partners (shareholders) to be responsible with the contributions they have made, but not personally for the company's obligations. On the other hand, an exception is introduced from the rules for seeking responsibility from managers, members of management and control bodies in capital commercial companies, who should be responsible for the damages caused to the company, but not for its obligations. We believe that the proposed revisions of the text contradict the principles of justification and coherence in the drafting of normative acts, as they do not take into account the interaction of labor law with other legal branches (especially with the principles of company law). We are also of the opinion that this text does not create real guarantees for the payment of labor remunerations, but rather places serious obstacles in front of free economic initiative and the attraction of investments.

In § 1 from the ZIDKT project by creating the new paragraph 3 of Art. 245 the KT stipulates that the responsibility for payment of wages, benefits and other payments under the KT will also pass to the acquirers of the legal entity - employer, if during the periods of accumulation of obligations or after the ownership is transferred. In this way, an exception is again created from the liability regime for the partners (shareholders) to be liable with the contributions made by them, but not personally for the obligations of the company.

Regarding the joint liability of "acquirers" and "transferors" - again, the matter is already regulated in the Commercial Law - and if it is necessary to tighten the rules for insolvency and bankruptcy, then the systematic place of the proposals for changes is precisely there, not in the CT. It can also be considered to enrich the rules in the Civil Procedure Code. In its current form, the proposal creates a high degree of uncertainty in the legal world, creates artificial obstacles to civil and commercial turnover, since the legal connection between the culpable or bad faith behavior of the acquirers and transferors and the insolvency is not sought, but an artificial presumption of unlimited property liability of these persons due to the simple fact of carrying out acts of transfer and acquisition.

Additional, the new para. 4 provides that, in relation to the cited obligations, the transfer of assets by the employer, the legal entity-employer and the owners of the legal entity-employer, carried out during the periods of accumulation of the obligations or thereafter, under clearly unfavorable conditions, which can definitely create uncertainty in trade turnover.

The proposed texts of the new paragraphs 3 and 4 of Art. 245, also enter into matters of general civil proceedings, which are outside the scope of the Labor Code. These issues are subject to settlement in the Civil Procedure Code.

We believe that in the attempts to create an additional guarantee to guarantee the payment of labor remunerations to workers and employees, the proposed texts absolutize this protection by assigning the obligations jointly and severally to third individuals, some of whom may not be involved in the operational management of the employer. In practice, with the proposed texts, the obligations to the staff are assigned to persons outside the employer in the strict sense of the word. We believe that at the moment there are sufficient mechanisms in the Bulgarian legislation to guarantee the fulfillment of the obligations of the enterprises, both to their workers and employees, and to their other creditors. We are of the opinion that new legislative complications should not be sought, but that work should be done in the direction of improving the functioning and application of the permits currently accepted by law.

In addition to the above, the proposed new texts of Article 245 of the CT are in sharp contradiction with the concepts of "employer" and "enterprise" introduced so far in the labor legislation through the legal definitions listed in the Additional Provisions of the CT. With the proposed changes, an attempt is made too vaguely and unlimitedly to formulate joint and several liability for the obligations in case of delayed payment of labor remunerations, benefits and other payments under KT. With the new texts of paragraphs 1 to 4 of Article 245 of the Criminal Code, a completely inadmissible and unjustified attempt is made to include in the scope of the employer's liability also that of the owners of a legal entity-employer and the officials who were responsible for the management and control of the enterprise in the periods of the accumulation of liabilities. With the proposed revision of the new texts, the rights and obligations of the owners of an employer are mixed according to the type of trader, depending on the rules laid down in the Commercial Law, and the concept of "officials responsible for management and its control" is also used in a completely unclear manner. The definition of an official is used in the Civil Code with a completely different meaning, and in this case an attempt is probably made to include as joint and several debtors the persons who, by virtue of their contracts for the management of a commercial company, exercise management and control functions of an enterprise. It should also be noted here the hypothesis that one employer is quite possible (company) to own several enterprises within the meaning of the definitions given in the Supplementary Provisions of the CT and in this regard, the expression used in the new texts "officials who are responsible for the management and control of the enterprise" is at least inaccurately used. If in this case an attempt is made to target members of the management bodies or the senior management team of a commercial company, it should be taken into account that they bear responsibility for their management, which is regulated as a basis, implementation procedure and amount in the Commercial law.

The proposed new additional text of paragraph 3 of Article 245 aims to regulate the joint and several liability of transferors and acquirers in the accumulation of obligations to workers and employees, and in this connection it should be pointed out that the proposed entry is completely redundant, since as of today, the responsibilities of the previous and current employer towards the workers and employees in the different cases when the employer changes are clearly regulated as commitments in the separate texts of the hypotheses under Art. 123 and Art. 123a of the Civil Code.

2. In § 2 the ZIDKT project envisages the creation of new art. 362a of the CT, introducing a simplified procedure for awarding due labor remuneration. We believe that the introduction of such a "simplified procedure" will not necessarily lead to a faster award and collection of wages due. We believe that the proposed text introduces additional procedural provisions in a substantive legal act (cleared over the years precisely of procedural rules), at that unnecessarily. The systematic place of these changes would be in the CPC, but in itself the proposal is ill-conceived and creates legal uncertainty and additional administrative burden. And at the moment there is a special order of rapid production (Art. 310-317 of the Civil Code) in accordance with Chapter 25 of the Civil Code (art. 310, paragraph 1, item 1), expressly provided for both claims for labor remuneration and for compensation for the time during which the worker was out of work due to the illegal dismissal. Last but not least, the proposed provisions are based on the presumption that the amount of the awarded claim will not, as a rule, coincide with the actual remuneration owed by the employer (due to the mechanism of its calculation), which we consider to be contrary to the principles of legality, equality of the parties and establishing the truth as the basic principles of Bulgarian civil-procedural law. In addition, if the dispute is essentially about the amount of the labor remuneration, then there is no way to apply the norm of Art. 177 of the Labor Code - for example, in cases of work without an employment contract and formal documentation of payments or in cases of payment of real labor remuneration other than that formally declared - e.g. the minimum wage. In these cases, the proposal is meaningless and does not achieve the intended effect. In addition to this, it is foreseen to allow the preliminary execution of the decisions under the "simplified procedure", noting that even now the Code of Civil Procedure provides for a procedure for the preliminary execution of decisions that have not entered into force, in which remuneration and compensation for work are awarded. In Bulgarian legislation, pre-execution is allowed on grounds that create a high degree of certainty for the existence, liquidity and demandability of the claim. The formalized statement of an individual about the existence of such is generally not among them, unless this statement is disputed - art. 410 et seq. of the Code of Civil Procedure. The proposal introduces a special case in which this rule is changed, it being sufficient for the creditor to be a current or former worker or employee and the debtor to be a current or former employer of that worker or employee. In this way, an additional formal basis and legal opportunity is created for any worker or employee, at any time, to proceed with execution on the property of his employer, regardless of the validity of the claim. This creates a risk for the very existence of every enterprise in Bulgaria and reduces the attractiveness of any investment in the economy. Last but not least, the opening of new jobs will be associated with a proportional increase in risk for the employer, which in itself makes the economic development initiative and the opening of new jobs meaningless. On the other hand, the proposal envisages the issuance of executive letters "to equalize" the obligations, without estimating the additional administrative costs, time and effort.

In conclusion, we consider that, for the most part, the proposed amendments and additions to the Criminal Code introduce extremely controversial institutions and authorizations, contradicting the basic principles of other legal branches, while not taking into account the available, provided by the current legislation, measures for the protection and protection of workers' rights and the employees in connection with guaranteeing the receipt of labor remunerations and other benefits provided for in the CT. We would also like to emphasize that the greatest attention should be paid to the comments on § 2 of the draft law, since the texts proposed there introduce unprecedented restrictions on legal rights and would lead to the impossibility of an employer for an indefinite period of time to use adequate legal means by which to terminate the employment relationship with a worker/employee committing serious disciplinary violations or in the absence of qualities of the worker/employee for effective performance of the work, or in case of changing the requirements for the performance of the position, if the worker/employee does not meet the them, in case the worker is a claimant in a labor dispute against his employer. These changes would open the door to a misuse of rights by employees who, by filing a case against the employer, regardless of whether there is a reason for it, would guarantee themselves protection against dismissal, even if they commit serious violations of labor discipline, such as even absenteeism.

Due to the above, the proposals made with the ZID of KT No. 454-01-19, submitted to the National Assembly by Volen Siderov and a group of people's representatives, should be rejected. In essence, the draft law repeats the submitted ZID of the CT No. 354-01-99, submitted to the 42nd National Assembly by Magdalena Tasheva and a group of people's representatives, on which KRIB has already expressed a position that does not differ from the one presented above.

With respect,

Eugene Ivanov

Ex. director