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:
KRIB categorically objects to the adoption of the proposed amendments to Art. 245 and additions to Art. 333 and 362a of the Labor Code.
The submitted bill to amend and supplement the Labor Code is not supported for the following reasons:
1. Amendments and additions to Art. 1 para. 245, para. 2 and para. 3 proposed by §4 from the draft law on amendments and additions to the Labor Code create conditions for significant uncertainty in legal peace, are not consistent 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 of the draft Law on Amendments and Supplements to the Labor Code ("ZIDKT") by amending the text of Art. 245 par. 2 of the Labor Code ("Labor Code") provides for the introduction of joint and several liability for the payment of payments due under the Labor Code to the employee for the employer, the owners of the legal entity-employer and the officials who were responsible for the management and control of the employer in the periods of accumulation of liabilities. This text, in addition to being unclear (especially with regard to officials, considering that the now existing 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, the owners do not necessarily have a direct relation to the management of the enterprise, and they are usually equally affected by a possible 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 of the draft for ZIDKT by creating a new para. 3 of Art. 245 of the Civil Code stipulates that the responsibility for the payment of wages, benefits and other payments under the Civil Code shall 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.
In addition, 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 after, under clearly unfavorable conditions, which categorically can created uncertainty in trade turnover.
The proposed texts of the new paragraphs 3 and 4 of Art. 245, 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 hitherto introduced concepts of "employer" and "enterprise" 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 it is quite possible for one employer (commercial company) to own several enterprises in the sense of the definitions given in the Additional provisions of the CT and in this connection, the expression used in the new texts "officials who are responsible for 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 of the draft of the ZIDKT through the proposed new provision of para. 3a of Art. 333 of the Criminal Code introduces an absolute ban on termination of the employment contract by the employer with notice in the event of closing a part of the enterprise or downsizing, in the event of a reduction in the volume of work, in the absence of the worker's or employee's qualities for effective performance of the work, and in changing the requirements for the performance of the position, if the worker or the employee does not meet them (under Article 328, paragraph 1, points 2, 3, 5, 11 of the CT) in the event that the worker is a claimant in a labor dispute against his employer , during the duration of the dispute and up to six months after its final conclusion. It is envisaged that the same absolute prohibition will apply to the unilateral termination of the employment contract by the employer upon imposition of a penalty of disciplinary dismissal (Article 330, Paragraph 2, Item 6 of the Criminal Code).
At the present time, apart from workers (employees) taking leave due to pregnancy, childbirth and adoption (under Article 163 of the Civil Code), who can only be released upon closing the enterprise, there is no other category of workers/employees for which it is foreseen absolute protection in the event of dismissal, which cannot be overcome in the order provided for in the CT. At the same time, the main principle introduced by the CT regarding the operation of the protection in case of dismissal is its operation at the time of delivery of the order to terminate the employment contract, thus creating certainty regarding the moment of judgment, as well as certainty in the relations between the parties on the legal relationship.
The proposed amendment extends the protection for a hard-to-predict period of time, the expiration of which depends on external factors, beyond the sphere of influence of the employer and the employee. The proposed provisions create the danger that the employer will find himself hostage to continuous lawsuits by unscrupulous employees, without any opportunity to defend himself and legally terminate his legal relations with them. Moreover, the inclusion of the hypothesis of Art. 330 par. 2 item 6 of the Labor Code may lead to a case in which the worker does not show up for work for a long period of time or commits other (or a series of) serious violations of labor discipline, but his employment contract cannot be terminated. The creation of legal provisions on the presumption that the employer prosecutes every worker who has taken the liberty of raising a labor dispute, through his dismissal, corresponds to an absolute disregard for the potential, the work and the powers of the competent bodies of the executive and judicial authorities to ensure compliance with labor legislation. We believe that the Bulgarian legislation currently creates sufficient guarantees for each person's access to justice and the power and subordination relations between the employer and the worker/employee do not prevent the ability of those performing labor functions to seek and defend their rights through administrative or judicial procedures. Thus, the proposed text absolutizes the rights of workers to the extent that it enables these rights to be misused and abused, through the use of the protection against dismissal to the detriment of the employer.
The proposal for changes in Art. 333 CT is again thoughtless and does not achieve any social and public goals, as it contradicts legal principles and creates obstacles to economic turnover. It is sufficient for the worker or employee to file any admissible claim with the defendant employer in order to secure remuneration without doing any work (in case of closing down part of the enterprise or prolonged stay). With the current workload of the court in each of the instances, until the entire decision on the dispute enters into force, and with the conditions for postponing the meetings that the Code of Civil Procedure provides, it is possible that the dispute will last for years "and up to six months after its final conclusion". In this way, the employer is burdened with social payments that have nothing to do with economic logic and existing practice in the EU. Under conditions of reduced work, for example, this could mean bringing the enterprise to bankruptcy. In the case of a partial closure of the enterprise, this may mean the loss of all economic flexibility and efficiency, make restructuring meaningless and lead the enterprise to bankruptcy. In the absence of qualities in the worker and the employee for effective performance of the work and changing the requirements for the performance of the position, the proposal means not allowing the enterprise to function effectively and realize better labor productivity. In a disciplinary dismissal, the proposal means to encourage the harmful behavior of that worker or employee, and not only the employer cannot fire him, but he is obliged to pay him for this harmful behavior for an unlimited period of time, usually years.
The proposed text is also in sharp contradiction with the accepted principles of equality of both sides in the distribution of labor force and freedom of the employer's authority.
3. In § 3 of the draft of the ZIDKT, the creation of a 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 the special order of fast proceedings (art. 310-317 of the Code of Civil Procedure) under the order of chapter 25 of the Code of Civil Procedure (art. 310, paragraph 1, item 1), expressly provided for 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", paying attention to the fact 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 assessing 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 the CT No. 354-01-99, submitted to the National Assembly by Magdalena Tasheva and a group of people's representatives, should be rejected.
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