Category: Bulgaria

CMS has advised Istanbul-based engineering and construction company Enka on the licensing of its 40-megawatt Town Up 8 photovoltaic project before the Bulgarian Energy and Water Regulatory Commission.

According to CMS, Town Up 8 Ltd. is a subsidiary of Enka, a sustainable infrastructure investor, the largest construction company in Turkiye, and ranked among the ENR’s Top International Contractors since 1981.

Back in 2023, CMS advised Enka on its initial EUR 8.4 million acquisition of the Town Up 8 company and its 40-megawatt photovoltaic project (as reported by CEE Legal Matters on October 3, 2023).

The CMS team included Sofia Managing Partner Kostadin Sirleshtov, Counsel Borislava Piperkova, Senior Associate Elena Yotova-Yordanova, and Trainee Lyubomira Tanchovska.

By Decision of the Court of Justice of the European Union (“CJEU“) of 14.12.2023 in case C‑340/21 the CJEU clarified several controversial aspects of the implementation of the GDPR.

First, should the GDPR be interpreted to mean that unauthorized disclosure of personal data or unauthorized access to such data by a “third party” within the meaning of the GDPR are in themselves sufficient to accept, that the technical and organizational measures implemented by the relevant controller are not “appropriate”?

Second, whether Article 32 of the GDPR should be interpreted as meaning that the assessment of whether the technical and organizational measures applied by the controller under this Article are appropriate should be made by national jurisdictions specifically, in particular taking into account the risks associated with the relevant processing?

The CJEU concluded that in the event of an attack on the controller’s security by a malicious third party, the GDPR must be interpreted in the sense that unauthorized disclosure of personal data or unauthorized access to such data by a “third party” is not in itself sufficient, to consider that the technical and organizational measures applied by the relevant controller are not “appropriate”. Next, the CJEU has accepted that the controller has a certain discretion to determine the appropriate technical and organizational measures to ensure compliance with this risk level of security. This does not change the fact, however, that the national regulator must be able to assess the complex judgment made by the controller and, in doing so, make sure that the measures chosen are fit to guarantee such a level of security. Accordingly, the assessment of whether the applied by the controller technical and organizational measures are appropriate must be made by the regulator specifically, taking into account the risks associated with the respective processing and assessing whether the nature, scope and application of these measures are consistent with those risks.

Separately, in decisions on cases C-683/21 (Nacionalinis visuomenes sveikatos centras) and C-807/21 (Deutsche Wohnen) the CJEU has held that when a supervisory authority imposes a fine or a penalty on a controller, including if it considers that the violation was committed intentionally or negligently, under the GDPR, it cannot engage the controller’s liability in the absence of fault on his part and the existence of a culpably committed violation is a condition for the imposition of such a penalty. In more detail, it should be specified that a controller can be sanctioned for actions that fall within the scope of GDPR if the controllers clearly understand their unlawful nature.

The takeaways from these several recent CJEU decisions are as follows: Yes, a data controller can submit a data breach notification to the competent regulator in compliance with its GDPR obligations and still be penalized for its own actions. However, this means that the controller must have acted culpably and this must have been seriously analyzed and motivated by the relevant regulator. This is a very important clarification regarding the observed practice of some regulators to impose sanctions with blanket reasons for “lack of sufficient technical and organizational measures”.

It is also worth recalling that according to the “Guidelines on the application and setting of administrative fines for the purposes of the Regulation 2016/679” “intent” includes awareness of the characteristics of the offense and the will to commit it. It is generally accepted that intentional violations, where a clear disregard for legal provisions is demonstrated, are more serious than negligent violations. Examples of circumstances that are indicative of intentional violations may be unlawful data processing, expressly ordered by the controller’s senior management or contrary to the advice of the data protection officer alteration of personal data to create a misleading ( positive) impression that certain goals have been achieved, the trading of personal data for marketing purposes, etc. Violations of the meaning and principles of the GDPR are listed, which to an extremely serious degree demonstrate disregard for the legal provisions and quite deliberate illegal actions as well as an actual will to violate.

Obviously, the conclusions we can draw from the CJEU decisions in light of the guidelines we already have are that imposing sanctions on unscrupulous controllers makes sense and is part of the competence of the European regulators. However, this cannot be self-serving and the regulators cannot claim intentional (or negligent) actions solely to protect the imposed sanctions, without motivating its conclusions in an indisputable manner and without taking into account the set of protective measures, taken by the controller. After all, imposing punishment before an offense has only happened in “Alice in Wonderland” so far.

By Irena Georgieva, Managing Partner, PPG Lawyers

Three years after its launch, e-Justice in Bulgaria is still under construction and improvement and has not yet reached its final form.

At the end of March 2023, the unified platform of e-Justice – the optimised Unified Portal for e-Justice (UPEJ) – started working. Prior to that, the pilot programme of the Unified Information System of the Courts (UISC), which was the forerunner of the actual UPEJ, operated for more than 3 years.

The optimised UPEJ is a single electronic database of court cases considered by all regional, district, administrative, military, appellate, and Supreme Courts in the Republic of Bulgaria. However, the transition was not announced anywhere in advance and legal practitioners were not prepared for the new version of UPEJ. Immediately after the launch, it became clear that the optimised UPEJ was available under different conditions than the test platform. Registered access to UPEJ is provided by the user through a qualified certificate for a qualified electronic signature for an individual. In practice, the possibility of accessing UPEJ with a name and password has been removed.

In the first few months of operation of the optimised UPEJ, absurd situations have arisen. For example, an administrative court ordered that applications for access to electronic files submitted to the court on paper or by e-mail should not be processed because, according to the “User’s Guide”, the creation of user-profiles and the application for access to court files should only be made through the UPEJ. At the same time, the same court had ruled that, due to the breakdown in electronic communication between the court’s Case Management Information System and the optimised UPEJ, applications for access to cases submitted through the UPEJ could not be considered by the court. As a result, the court denied electronic access to parties and their counsel for several weeks.

A positive trend in the development of e-Justice since 2023 is the increasing number of electronic services available in the optimised UPEJ, as well as the integration between individual information systems. There are more and more courts that offer the possibility of initiating court cases through the UPEJ, filing documents on initiated court cases through the UPEJ, serving documents electronically, making electronic payments through a virtual POS terminal, etc.

In addition, another important innovation was launched at the end of October 2023 – the UPEJ eCase mobile application. The mobile application allows any user with a registered profile in the UPEJ to access all court cases with free public access, cases with personal participation, view all attached electronic documents, receive electronic court documents, etc. The eCase application can be downloaded free of charge from the App Store and Google Play.

More than half a year after the launch of the optimised UPEJ, serious shortcomings remain.

Common issues when working with the optimised UPEJ are the following:

1. Access to electronic court files.

As before 27.03.2023, and now, electronic access to a specific electronic case can be obtained by the parties and their representatives (determined by law or by authorisation) only after their express declaration of will–access application.

The optimised UPEJ allows the person who has a profile to access it in different roles. A distinction is made between individuals (citizens, lawyers, and other persons involved in cases) and legal persons (all persons under Art. 50 and Art. 52 of the Civil Procedure Code – state institutions, banks, insurance companies, utility companies, etc.). A user with a UPEJ profile can view basic information on all court cases with free public access. A user with registered access to a specific file can only consult all the documents contained in the specific electronic case file.

1.1. The time taken to grant access varies between courts and even between different panels of the same court. It varies from 24 hours to days, or even weeks, from the time the application is filed to the time the UPEJ automatically sends an e-mail confirming the authorisation.

1.2.The possibility of submitting documents through the UPEJ, including an application for access to the electronic case file, does not apply to all courts in the country.

1.3.By submitting an application for access to an electronic case file through UPEJ, the applicant agrees to receive court documents and to be notified electronically. The consent to electronic notification is automatically generated just before signing the electronic application and is visualised in the so-called electronic package. On the one hand, the automatic consent indicated is a logical consequence of the access requested, which is the ultimate objective of the electronic system implemented. On the other hand, however, given that the parties to the proceedings who have obtained access to the electronic case file are not yet obliged to do so and can choose whether they wish to be notified electronically, and given that the electronic summons system is not yet fully operational, it is clear that the automatic consent given when applying through the UPEJ seems inconsistent at the current stage of development of e-Justice.

1.4.There is still a discrepancy between the options available to the lawyer in physical and electronic filing. In the UPEJ as it currently operates, a lawyer does not have free access and cannot make inquiries about electronic cases, unless he is expressly granted access to the specific case.

2. The electronic environment.

All cases initiated after 1.7.2021 will exist in an electronic environment that is common and uniform for all courts.

In cases initiated after the introduction of electronic justice, orders will no longer be issued manually, but in electronic form by entering them in the EISS, unless this is impossible due to their nature or the law provides for their execution in another way (Art. 102a, para. 1 of the Civil Procedure Code).

After the introduction of electronic justice, all documents in the cases should exist as electronic documents or electronic images of documents within the meaning of Part 183, para 2 of the Civil Procedure Code.

2.1.Even though all judicial acts issued after 1.07.2021 exist in the generally accessible electronic environment and the parties to the proceedings should be able to refer to these acts without submitting copies of them, some court pannels still oblige the parties to the proceedings to submit paper copies of the acts. This tendency can be observed mainly in courts with little practical experience of e-Justice, usually in the busiest judicial districts.

2.2.An example of an act that cannot be issued in electronic form is the drawing up of a court record under Art. 150 of the Civil Procedure Code of an open court session in which the parties to the dispute certify in writing their agreement to settle the dispute by means of an agreement, which is subject to the provisions of Art. 234 of the Civil Procedure Code, which must be approved by the court, after which the case is dismissed. In this case, after the hearing, the court creates an electronic record, but the composition is not signed again – the certification in electronic form does not correspond to the acts actually performed, an essential element of which is the signed signatures of the parties. Therefore, the court orders that the UISC should reflect that the proceedings in the case have been terminated by an approved settlement, with the electronic image of the approved settlement being attached to the generated electronic document.

2.3.A document filed in an open court hearing will often remain outside the electronic case file. The reason for this is that if the document is not filed through the physical registry of the court, it should be, but often is not, scanned and an electronic image of it may not be created. This makes the electronic case file incomplete.

3. Electronic delivery of documents to a lawyer.

The introduction of electronic justice in civil proceedings allowed for a different approach to different legal entities. The Civil Procedure Code provided for the gradual emergence of obligations for the various legal entities, which led to a violation of the principle of equality (e.g. Article 50, para 5 of the Civil Procedure Code). For lawyers, the obligation was to come into force later – from 1.07.2022, but this turned out to be practically ineffective and the provision of Art. 51, para. 1 of the Civil Procedure Code was amended accordingly, with effect from 2.02.2023. In practice, two options have been created for the service of court documents: both in person at the lawyer’s office and at any other place where the lawyer is on duty (the situation before the introduction of electronic justice), and by electronic service, provided that the lawyer has given his consent to such service by electronic means. Therefore, presently, the electronic service of documents on a lawyer is optional and only by e-mail, as the electronic service module in UPEJ is still under construction.

In conclusion, e-justice has not yet reached its final stage of development. It is a tool that facilitates the work of judicial authorities, lawyers, and parties, but it requires effort and resources. To achieve greater transparency, speed, security and convenience through the use of modern communication technologies, it is necessary to fully implement e-Justice. This requires, firstly, that the UPEJ profiles of the procedural representatives start functioning effectively as soon as possible and, secondly, that the electronic platform allows the same procedural actions to be carried out by the parties, their procedural representatives, and participants in the proceedings as in the courthouse.

t employers seek legal advice in each specific case. This is also why the details above may seem too extensive, but any omission can make the termination unlawful.

By Meglena Konstantinova, Senior Associate, Boyanov & Co

CMS has successfully represented the interests of Free Energy Project Oreshets – formerly owned by CEZ and currently a part of the Eurohold Group – in a dispute against the Bulgarian Ministry of Finance.

According to CMS, the dispute with the Ministry of Finance of the Republic of Bulgaria was related to the “return of the 20% solar and wind fee, which had been abandoned by the Bulgarian Constitutional Court in August 2014. By means of this final and enforceable decision, the Supreme Court of Cassation in Bulgaria confirmed the liability of the Bulgarian state represented by the Ministry of Finance.”

The CMS team included Partner Kostadin Sirleshtov, Counsel Borislava Piperkova, and Senior Associate Elena Yotova-Yordanova.

Wolf Theiss has advised the Real Estate Development company on the development of the River Park Sofia project.

Real Estate Development EOOD is a Bulgarian real estate development company.

River Park Sofia is a gated residential project spanning 215,000 square meters and comprising 352 modern architecture homes.

The Wolf Theiss team included Partner Radosveta Kojuharova, Senior Associate Ivelina Atanassova, and Associate Boris Barsanov.

Eversheds Sutherland Bulgarian member firm Tsvetkova Bebov & Partners acted as the single transaction counsel on TBI Bank’s December 15, 2023, private placement of MREL notes maturing 2026, with a total value of EUR 10 million.

The notes are the second series of MREL instruments and follow the bank’s June 2023 first EUR 10 million tranche of senior non-preferred MREL bonds due 2026 (reported by CEE Legal Matters on July 26, 2023).

According to Eversheds Sutherland, “the notes contribute to the minimum requirement for eligible liabilities of TBI Bank, as set by the Bulgarian National Bank in its capacity of resolution authority.”

TBI Bank is a financial technology bank operating in Bulgaria, Romania, and Greece.

The Eversheds Sutherland team included Managing Partner Nikolay Bebov, Partner Damyan Leshev, Counsel Maria Karacholova, and Senior Associate Petar Ivanov.

Former Sabev & Partners Partner Boryana Boteva has joined Kinstellar’s Sofia office as a Senior Counsel and its Head of Projects & Infrastructure.

Before joining Kinstellar, Boteva spent 25 years with Sabev & Partners, having joined the firm back in January 1999. Earlier, she spent two and a half years as a Legal Adviser with the Barents Group and three years as the Head of the Legal Department with the Bulgarian Privatization Agency. With a focus on infrastructure and energy, Boteva’s practice spans public procurement, PPP, project finance, corporate/M&A, arbitration, commercial litigation, and taxation.

“We are grateful to Boryana for bringing all of her experience to the new role at Kinstellar,”Sofia Managing Partner Diana Dimova commented. “She is a highly respected practitioner and her expertise will be invaluable to our growing Infrastructure & Projects service line. Her knowledge, professionalism, and integrity in every aspect of client work make her a great addition to the Sofia team and the firm as a whole.”

“I’m delighted to be joining Kinstellar, especially in the year of its tenth anniversary in Sofia,” Boteva added. “I look forward to working on exciting projects together with such a fantastic team, building on the success of the firm.”

Employment contracts can only be terminated on specific grounds listed in the Bulgarian Labor Code. There are over 50 grounds for termination, each with its unique facts, documents, and procedures.

Disciplinary dismissal is both a disciplinary sanction and grounds for employer-initiated termination without notice (Art. 330, Para 2, item 6 of the Labor Code). This is regarded as one of the most problematic and risky grounds for termination under the Labor Code.

This overview provides guidance on the procedure and highlights key considerations.

1.       General guidelines and considerations

a.       Dates (termination date/ serving date/ last working day)

In the case of a disciplinary dismissal, the dismissal has immediate effect – it takes place when the dismissal order is served. However, the order is usually served during the working day and there is a prohibition on retrospective dismissal. Therefore, unless the order is served before or at the beginning of the working day, that day counts as a working day.

b.       Employees may not work for the employer once they have received the notice of termination. As a general rule, employees are released from their employment obligations from the moment of delivery of the notice of termination (although the day of delivery of the notice of termination is recognized as a working day). If they continue to carry out their duties, this could affect the legality of the dismissal.

c.       If termination papers are mailed via post, the employee’s termination date should be the date when they receive the papers.

d.       Execution of termination documents

The person signing on behalf of the employer must be either the registered manager or a proxy authorized by the registered manager with the necessary powers. Proxies (for the specific case of disciplinary dismissal) can only be employees of the employer with managerial duties and cannot be employees from group companies.

The termination documents need to be signed in two hard copies using ink or with an electronic signature. However, the following conditions should be met when using an electronic signature:

1. The employer must use a qualified electronic signature;
2. The employee must give written agreement to receive electronic communication;
3. Тhe employer must have set rules in their Internal Company Rules on which documents will be electronic.

It is unclear whether failure to comply with the above rules will result in the termination being invalid or only in an administrative penalty. We believe that the termination will still be valid, but there is no case law on this.

If the employees sign the document, this will serve as confirmation that they have received it. In this situation, the employer does not need the employee’s consent to terminate his or her employment. If the employee refuses to sign the dismissal papers, two (or preferably three) other witnesses should confirm the refusal in writing. The employee can sign with wet ink or with an electronic signature. The employer’s internal rules will specify the type of electronic signature required from the employee (qualified, advanced, or simple).

Serving of termination papers

NB! Regardless of the method of serving the termination documents, the employer must follow a two-step process: (i) the employer must provide the employee with a protection declaration and wait for the employee to complete and declare that they do not benefit from any protection, and (ii) only then should the employer deliver the termination order.

Serving in person: we recommend serving termination documents in person as it minimizes the risk of the employee successfully challenging the service of the documents. If the employee is working remotely, they should be invited to either the employer`s office or the offices of their accountants or lawyers to receive a hard copy of the documents in person. The termination documents must be signed by the employee during a meeting with the employer’s representatives. The employee should be present on the premises and not allowed to leave until they sign or refuse to sign. If some team members cannot be physically present, an online call via Teams, for example, can be scheduled. If this happens, the employer may ask the employee to visit their location and have representatives present in the same room during the call. Then the representatives will physically deliver the original documents to the employee while they discuss them online. If the employee refuses to sign, the termination papers must be countersigned by two (or better three) witnesses.

Serving online (via email and/or call on Teams/Zoom): – if it is not feasible to serve the documents in person, an alternative could be to send scanned copies of the documents (which were executed by the employer) via email and/or Teams during the call to the employee. However, the termination process involves two steps. Firstly, the employer must provide the employee with a declaration for protection and wait for the employee to complete declaring that they do not benefit from any protection. Only then may the employer deliver the termination order. In other words, the employer cannot simply send the termination documents, but it must first receive feedback from the employee on the protection declaration.

To ensure the legality of termination when serving papers online, we suggest the following steps: (a) record the meeting on Teams / Zoom (with the employee’s consent), including the moment when the employee opens the document, (b) invite additional people to join the call to serve as witnesses, if needed, and (c) request written confirmation of receipt.

Sending documents by courier is an alternative option. In this case, the employer must send the documents twice: first, the declaration for protection (and await its return) and then the dismissal documents. This process can be tedious and leaves room for skilled employees to take advantage of it. For example, once the employee receives the declaration for protection, he can go on long sick leave which protects him from dismissal.

2.       What is a breach of discipline and what are the disciplinary sanctions?

Any intentional or negligent failure to fulfill work duties is considered a disciplinary violation The Labor Code outlines the following acts as breaches of work discipline:

1. Arriving late, leaving early, absence from work, and the inefficient use of work time.
2. Coming to work when incapable of fulfilling assigned tasks.
3. Failure to execute assigned work to observe technical and technological rules.
4. Production of inferior quality output.
5. Failure to observe health and safety regulations at work.
6. Non-compliance with lawful employer orders.
7. Abusing trust and damaging the reputation of the employer, as well as unauthorized disclosure of data that is confidential in respect of the employer.
8. Damaging the employer’s property and wasting resources, such as prime and raw materials and energy.
9. Failure to fulfill other employment obligations stipulated in laws and other regulatory acts, in the internal labor regulations, in the collective labor agreement, or determined at the time of the establishment of the employment relationship.

There exist only three statutory disciplinary sanctions prescribed by law:

• Reprimand;
• Warning of dismissal; and
• Disciplinary dismissal.

When determining the appropriate disciplinary sanction, the employer must consider the severity of the violation, the circumstances surrounding it, and the employee`s behavior. Only one disciplinary sanction may be imposed for a single breach of work discipline.

The following disciplinary breaches are grounds for dismissal:

1. Employee arriving late or leaving work early on three separate occasions, each lasting no less than an hour, within one calendar month.
2. Employee is absent from work for two consecutive working days.
3. Systematic breaches of work discipline (more than two).
4. Abuse of employer’s trust or disclosure of confidential data of the employer.
5. Causing damages to citizens by employees involved in the trade and services through overcharging, short weighting, or supplying goods or services of quality inferior to the stated one.
6. Employee participation in games of chance through telecommunication facilities of the employer, as the costs incurred shall be reimbursed in full.
7. Other serious violations of work discipline.

The employer’s right to impose disciplinary dismissal in the above-mentioned cases is not unconditional. The employer must always consider the seriousness of the violation, all circumstances, and the behavior of the employee. For instance, an employee cannot be dismissed for “systematic breaches” of labor discipline if they committed three minor breaches. The employee may face disciplinary dismissal for any violation of working discipline that constitutes gross misconduct. This is determined by analyzing the severity of the breach, its consequences, the circumstances, and the employee’s overall conduct.

NB! In Bulgaria, employers often initiate Performance Improvement Plans (PIP) to terminate underperforming employees, even if the poor performance is a result of discipline breaches. PIP must not be used in case of disciplinary breaches. The Bulgarian Labor Code distinguishes between two distinct grounds for termination – inadequate skills for efficient job performance where PIP are applicable (Art. 328, Par. 1, Par. 5 of the Labor Code) and disciplinary dismissal (Art.330, Para 2, item 6 of the Labor Code). They should never be mixed as they require different procedures, different motives, and different types of supporting evidence.

3.       Timeline for the imposition of disciplinary sanctions

Disciplinary sanctions can be imposed within two months of identifying the breach and no later than one year after the violation occurs. The said time limits shall not run during the time in which the employee is on statutory leave or takes part in a strike. For a violation of disciplinary rules that also qualifies as a criminal offense, or an administrative violation regarding assigned work established by a sentence or decree, the time limits mentioned above shall commence on the effective date of the sentence or penalty decree.

4.       Steps of the disciplinary dismissal procedure

No.	Step	Comment
1.	Discovery and investigation of the breach	Usually, the manager in charge collects evidence and produces a report for the company`s statutory manager.
2.	Disciplinary hearing	The employee should be granted an opportunity to defend against the allegations. Typically, the employer will furnish the employee with a written list of questions (accompanied by any pertinent evidence) and request the employee to provide written explanations. The time to respond is usually a few hours, unless the facts are complex, in which case it can take up to a few days.   By exception, a verbal hearing may be held. In this case, it is recommended to prepare meeting minutes that all present parties must sign.
3.	Assessment of the case, determination of the sanction	The employer reviews the employee`s explanations and collects additional evidence if needed.   The employer determines whether the employee has committed a disciplinary violation, and if so, what the disciplinary sanction must be (refer to the assessment criteria above).
4.	Check for special protection against dismissal	Please see Section 5 below for a detailed review of this topic
5.	(optional) Application for permission for dismissal to the Labor Directorate	Please see Section 5 below for a detailed review of this topic
6.	Issuance and serving of termination notice	If the employee does not enjoy protection against dismissal or if permission for dismissal is granted, the employer issues and delivers a termination order to the employee.   The order must specify the following: ·      The employee who committed the disciplinary breach. ·      The breach and when it occurred. ·      The type of disciplinary sanction (reprimand, warning for dismissal, or dismissal) ·      The legal text of the Labor Code, including the specific article(s) and item(s) that serve as the basis for imposing the sanction. The order is to be presented to the employee, who must sign a document specifying the date and time of receipt. If it is not possible to deliver the order in person (physically or electronically), the employer must send it through registered mail or courier, with a return receipt requested. If the employee declines to sign that they have received the order, the refusal must be documented with the signature of 2 (better 3) witnesses.
7.	The employer reflects the termination in the labor book of the employee (NB! These rules will change as of 01.06.2025)	The labor book is an official document in which the most important facts of the employment history of the employee are reflected. Termination must also be reflected.   Usually, the labor book is kept by the employee, so the employer must request it (such a request can be included in the termination order). The employer reflects the termination on the last working day and returns immediately the labor book to the employee.
8.	The employer notifies the National Revenue Agency for the termination of the employment (NB! These rules will change as of 01.06.2025)	The notification must be filed within seven days following termination of the contract via standard notice. This task is typically handled by payroll service providers.
9.	The Employer pays compensation (if due at all)	The compensation must be paid by the end of the month, following the month of the termination. The employer must compensate the employee for:   ·      any unused annual paid leave. ·      (Very rarely) 2 monthly salaries if the employee has acquired rights for pension for age and social security length of service at the time of termination (and 6 salaries if the employee worked at the employer or at the Employer’s group for 10 years within the last 20 years). Such compensation can only be paid once, meaning that if it was already paid by a previous employer, it will not be due again.

The compensation owed by the employee to the employer is for the required notice period.

5.       Special protection against dismissal (Art.333 of the Labor Code)

This protection applies to disciplinary dismissal (and for other specific dismissals), not all types of dismissal. The protected categories of employees include:

1. Mothers of children up to 3 years of age.
2. Pregnant employees or employees in advanced stages of in-vitro treatment.
3. Employees who have been reassigned to lighter positions due to health reasons.
4. Employees with ischemic heart disease, cancer, active tuberculosis, diabetes, psychiatric disorders, and occupational disease.
5. Employees who have started using their permitted leave.
6. Employees are elected as employees’ representatives during the period when they occupy such a position.
7. Employees elected as employees’ representatives on “safety and health at work” matters during the period when they occupy such a position.
8. Employees who are members of a special negotiating body, a European Works Council, or a representative body in a European Company or a European Cooperative Society, for the duration of performance of the functions thereof.
9. Leaders of the trade unions at the company’s level (if any), and 6 months after they are discharged from this position.

To determine if an employee is protected against dismissal, an employer must request that the employee complete a special declaration declaring the presence or absence of protection. If protection is declared, the employee must then provide relevant documents within a reasonable timeframe (typically 3 days as provided by the employer).

If the employee does not declare protection, the employer may proceed with serving the termination order.

If an employee declares protection, the employer cannot serve the termination order and must await the presentation of supporting documents. The employer has three options depending on the type of protection:

1. If there is absolute protection (e.g., for employees on pregnancy and childbirth leave) – the employer cannot dismiss the employee.
2. In case of protection based on medical considerations – the employer must (a) ask the Territorial Expert Medical Commission for an opinion on how the dismissal will affect the employee’s health and, after receiving the opinion, (b) apply to the local Directorate “Labor Inspection” for permission for dismissal (the procedure takes several months).
3. If the protection is not based on medical considerations – apply to the local Directorate “Labor Inspection” for permission for dismissal (the procedure takes 7 days).

The local Directorate “Labor Inspection” decides whether to grant permission for dismissal at its discretion. It does not justify its decision and it is not subject to appeal. During the above procedure, the time limits for imposing disciplinary sanctions (2 months from the date of discovery of the violation and 1 year from the date of its occurrence) do not run.

6.       Exposure of the employer in case of wrongful dismissal

The employee can challenge the dismissal in court within 2 months. If the court finds that the dismissal was unlawful, the consequences for the employer (depending on what the employee requested in the statement of claim) could be as follows:

1. Annulment of the dismissal and its declaration as unlawful.
2. Employee reinstatement (the employee must return to work within 14 days after receiving notification from the court; failure to appear results in the automatic termination of the labor contract). It is worth noting that few employees are willing to return, as most have secured alternative employment within the 2–3-year duration of the litigation.
3. Unemployment compensation. The maximum compensation is limited to 6 monthly salaries. If the employee begins working again within this timeframe but for a lower salary, the employer must pay the difference in compensation for the same six-month period.
4. Accrual of paid leave between the date of dismissal and the date of their reinstatement to work, or the expiry of the 14 days for reinstatement if the employee does not return to work, if the employee was not hired by another employer, or if the paid leave granted at the other employer was lower.
5. Social security installments (due by the employer) for the entire period between the date of dismissal and the date of their reinstatement to work or the expiry of the 14 days for reinstatement (if the employee does not return to work). If the employee is working for a lower salary during this time, the employer must make up the difference.
6. Litigation costs.

Dismissals under Bulgarian law are formal, and we suggest that employers seek legal advice in each specific case. This is also why the details above may seem too extensive, but any omission can make the termination unlawful.

By Radoslav Alexandrov, Partner, and Violeta Kirova, Principal Associate, Boyanov & Co

Djingov Gouginski Kyutchukov & Velichkov has advised Nasekomo on the closing of its EUR 8 million Series A equity investment round led by Invenio Partners. DGKV also advised Invenio Partners on the deal.

Nasekomo is a technology company that leverages “the power of insects to reshape the food chain, by transforming organic co-products into high-value products such as insect protein, oil, and frass,” the firm reported.

Invenio Partners is a private equity and growth equity fund focused on investments in Southeast Europe.

Back in 2020, DGKV advised Nasekomo on its seed funding round (as reported by CEE Legal Matters on July 17, 2020).

The DGKV team included Partner Omourtag Petkov and Counsel Ivan Punev advising Nasekomo; and Partner Georgi Tzvetkov and Senior Associate Silviya Apostolova advising Invenio Partners.

On 30 November 2023 Bulgarian Commission for Protection of Competition (the “CPC”) finally published draft of new decision on group exemption of certain categories of agreements, decisions and concerted practices with effect on national markets (the ”Draft”), such as: vertical agreements and practices, agreements and practices in the motor vehicle sector, specialisation and R&D agreements and practices as well as agreements for transfer of technologies, from the ban under article 15 (1) of the Competition Protection Act (the “CPA”). The latter reflects article 101 (1) of the TFEU.

The previous CPC block exemption decision expired on 31 Mary 2023 (the “Old CPC Decision”). In latter CPC referred directly to the exemption conditions provided by the respective EC block exemption regulations. Since EC regulations expired in 2022 and 2023 and were substituted by new once, until entry into force of new CPC block exemption decision there is legal uncertainty for the above said categories of agreements and concerted practices with effect on national markets.

According to the Draft CPC takes the same approach for block exemption decision as in the Old CPC Decision. CPC intends to refer again to the exemption conditions provided in the new EC block exemption regulations for the respective categories of agreements and concerted practices. The main arguments of the CPC for this approach is that the ban under article 15 (1) of the CPA copies the one under article 101 (1) of the TFEU as well as the general exemption conditions under article 17 (1) of the CPA copy the conditions under article 101 (3) of the TFEU. As per the CPC this approach ensures reciprocity of the Bulgarian competition legal framework with the European one.

CPC will apply the EC block exemption regulations’ conditions within the same time frame as set by the respective EC regulations.

In the Draft CPC explicitly underlines that the market positions of the parties to the said categories of agreements and concentred practices is important. When the market shares are under certain levels and the agreements and concerted practice do not contain hardcore restrictions of competition (e.g. fixed prices, allocation of markets or costumers, production restriction, etc.), the agreements and practices may improve the production (or distribution) of goods, the provision of services or the technical or economic progress while providing consumers with a fair share of the benefits. CPC does not exclude that when the markets shares of the each or one of the parties exceed the set thresholds the agreement or practice might be exempted under the general conditions under article 17 (1) of the CPA. CPC recalls that some restrictions, the so-called hardcore restrictions, cannot be exempted regardless of the market shares of the parties, while some restrictions can be exempted only if they meet certain specific conditions. However, CPC refers to the respective EC block exemption regulations for all the specifics, such as: market shares for exemption from the ban under article 15 (1) of the CPA, definition of the hardcore restrictions of the competition, specific conditions for exemption of certain restrictions.

In the Draft it is explicitly said that the undertakings can apply the guidelines adopted by the European Commission for the relevant categories of agreements by conducting individual assessment, considering the specifics of the national market and the provisions of the CPC block exemption decision.

The Draft provides for transitional period for vertical agreements and practices from 1 June 2023 until three months after publication of the decision in the State Gazette. For intended transitional periods for the specialisation and R&D agreements and practices are from 1 July 2023 until 30 June 2025.

Until the end of 2023 the Draft was subject of public consultations. The consultations procedure is closed without any additional statements and opinions from the public. This is why, it is expected CPC to adopt the Draft without significant changes. No information is provided when the decision will be adopted. However, it shall be published in the State Gazette to entry into force.

By Mariya Papazova, Partner, PPG Lawyers