Background for Bulgaria

Between 2012 and 2022, Bulgaria experienced robust gross domestic product growth of 42.49%, well above the EU average of 15.29%. From 2012 to 2022, unemployment in Belgium decreased by 9 percentage points, and it remained below the EU average of 6.2% in 2022. Although declining, youth unemployment (unemployment among those up to 25 years of age) stood at 10.7% in 2022, and was still higher than the total unemployment rate of 4.3%. Employment rates increased in the 10 years considered, from 67% in 2012 to 73.6% in 2022. Employment of those aged 15–24 fell by 7.4 percentage points between 2012 and 2022.

The main challenges facing the Bulgarian economy and labour market between 2012 and 2022 included managing the pandemic and inflation and reducing inequalities. By mid-2021, the business climate was improving as a result of the government policy and measures implemented to limit the effects of COVID-19. However, in June–December 2021 the Bulgarian economy tackled a substantial increase in energy prices and another wave of COVID-19. The intensification of the war in Ukraine increased the likelihood of stagflation, as higher energy prices made production more expensive and uncompetitive while external markets shrank. For the second year in a row, in 2021 Bulgaria registered a decrease in the number of employed people and an increase in unemployment (Economic Research Institute, Bulgarian Academy of Sciences, 2022).

The Labour Code (Кодекс на труда) regulates labour relations between employees and employers, industrial relations, collective bargaining and the control of labour regulations compliance.

In 2022, amendments to the Labour Code (implemented through Law No. 217of 5 August 2022 amending and supplementing the Labour Code) aimed to promote the security and predictability of employment relationships and to improve the possibilities of reconciling work and family obligations, implementing Directive (EU) 2019/1152 on transparent and predictable working conditions in the EU and Directive (EU) 2019/1158 on work–life balance for parents and carers (KPMG Bulgaria, 2022).

Employee representation and collective bargaining, and the criteria for the national representation of social partners, are regulated by the Labour Code. The law on the settlement of collective labour disputes (CLDs) deals with the resolution of disputes between employees and employers on issues related to labour and social insurance and the standard of living. The current conditions for establishing the representation of employers and employees through organisations are set out in an ordinance (Decree of the Council of Ministers No. 152 of 11 July 2003).

The General Labour Inspectorate has overall control over labour legislation compliance in all economic sectors. The inspectorate is part of the Ministry of Labour and Social Policy. The functioning of the national system for labour inspection is determined by the Law on Labour Inspection (2009).

Bulgaria’s industrial relations system is decentralised and operates through various tripartite structures for national and sectoral social dialogue and collective bargaining bodies at sectoral, industry, company and territorial levels (councils for social cooperation in municipalities). National tripartite cooperation has taken place within the National Tripartite Cooperation Council (NTCC) since 1993 and the Economic and Social Council since 2001, and also takes place through various tripartite governing and supervisory bodies within the employment and social security administration. Industrial tripartite cooperation is also organised through (sub)industrial councils under the umbrella of the respective ministries (in about 50 councils). Although trade union density and the impact of collective bargaining have decreased since the 1990s, collective bargaining coverage is still substantial in several industries and companies (Kirov, 2019). A national tripartite agreement was signed in June 2020, only the fourth of its kind in the 30 years of transition. It covers measures in five areas: the business environment and the economy; energy; the European Green Deal; demography, education, the labour market and labour migration; and social protection policies (Dimitrov, 2021).

Since 2011, social dialogue and industrial relations in Bulgaria have been functioning in a complex political and economic climate, and have continued despite the government’s disregard of tripartism in making decisions of national importance. For example, there have been tensions between employers, trade unions and public bodies about the functioning of the NTCC in relation to labour-related legislative changes, pension reform, minimum statutory wage increases and Bulgaria’s recovery and resilience plan.

In 2020–2021, social partners were active in supporting measures and social dialogue regarding COVID-19 and the refugee crisis because of the war in Ukraine.

To tackle the multiple challenges posed by the pandemic (Dimitrov, 2021), the Confederation of Independent Trade Unions of Bulgaria (CITUB) and the three employer organisations –the Confederation of Employers and Industrialists in Bulgaria (CEIBG), the Bulgarian Industrial Association (BIA) and the Bulgarian Industrial Capital Association (BICA) – initiated the signing of social partner bipartite memoranda for the prevention of COVID-19, preservation of jobs and adaptation of the skills of the workforce to the digitalising world of work. The industries/sectors involved are the chemical industry, mining, metallurgy, the mechanical engineering and electrical industry, energy, water supply and sewerage, construction, textiles and clothing, the food industry, brewing, agriculture and culture.

In 2020–2021, the social partners participated actively in discussions with the government on the design of COVID-19-related economic and social measures and their sustainability, and regarding opinions on legislative amendments and draft bills. There was tension between employer and worker organisations during the discussions on the Labour Code amendment concerning time averaging, on-call and on-duty arrangements and overtime, and the minimum statutory wage increase and socioeconomic measures because of inflation. The final version of the national recovery and Resilience plan is also a subject of tensions between social partners and the government. According to CITUB (Atanasov, 2023), the plan contains substantial amendments (for example a 40% reduction in energy emissions by 2026) that were not subject to discussion with the social partners or wider public consultation.