Bulgaria: Latest working life developments – Q2 2017

The ongoing debate about raising the statutory minimum wage – and trade union opposition to requirements for large combustion plants – are the main topics of interest in this article. This country update reports on the latest developments in working life in Bulgaria in the second quarter of 2017.

Debate on minimum statutory wage 

In January 2017, the Bulgarian Industrial Capital Association (BICA), the Bulgarian Industrial Association (BIA), the Bulgarian Chamber of Commerce and Industry (BCCI) and the Confederation of Employers and Industrialists in Bulgaria (KRIB), criticised the government's decision to increase the minimum statutory wage. They claimed that the decision violated the law as the decree was adopted by Bulgaria’s Council of Ministers without preliminary discussion with the representative social partners in the National Council for Tripartite Cooperation (NCTC).

In May 2017, following the complaint, the Supreme Administrative Court of Bulgaria (SAC) repealed the decree, which had from 1 January 2017 increased the minimum wage from BGN 420 per month (€214 as at 12 July 2017) to BGN 460 (€235) . The Council of Ministers had also failed to comply with the court decision, in force since 2015, which had repealed a 2014 decree to increase the minimum wage. This repeal was issued because of an unfulfilled conciliation procedure with the NCTC. The NCTC will need to discuss the decree to increase the minimum wage in order to overcome the SAC decision.

Employers have warned that the proposed increase does not correspond with the poverty line (or minimum level of income required), the extremely low growth of labour productivity and employment, and the dynamics of the average wage in recent years. Employer organisations are opposed to the government setting the minimum wage without taking into account the positions of the social partners. However, trade unions and the government support the increase in the minimum wage. The medium-term budget plans of the current government include increasing the minimum wage to BGN 510 (€260) in 2018 and to a minimum of BGN 600 (€306) in 2020.

Mining industry opposed to EU requirements for energy sector

At the end of June 2017, the Confederation of Labour Podkrepa and the Confederation of Independent Trade Unions in Bulgaria (KNSB) – both members of IndustriAll European Trade Union – declared that the mining industry is opposed to the European restrictions in the energy sector. The organisations state that these restrictive measures, which relate to emissions from large combustion plants, will negatively affect the Bulgarian energy sector. (Bulgarian combustion plants rely on nationally mined coal.)

Unions warn that if the new EU requirements for large combustion plants (PDF) are approved, at least three thermal power plants in the Maritsa East energy complex may close. Overall, trade unions say, 120,000 jobs are threatened.

Some experts have stated that even the most modern power plants in Bulgaria cannot fulfil the new requirements for large combustion plants. While these will come into force, Bulgaria may request a delay in the implementation of the measures. To this end, KNSB has invited the prime minister and the leader of the Party of European Socialists (PES) for a meeting to discuss the future of the Bulgarian energy sector. KNSB has also invited the main political parties to ask their MEPs to activate a vote in the European Parliament to force the Commission to reconsider its decision about the requirements for combustion plants.

The Bulgarian mining industry is among the largest employers, both at national level and in the European context, accounts for 3% of Bulgaria’s GDP, and is in the top five mining industries in the EU. 

Outlook

In the third quarter of 2017, a general protest of employers in the security sector, mainly from the Ministry of Interior, is expected. Employees are demanding higher wages and better working conditions.

Because of the threat of unemployment and consequent social crisis, the trade unions have asked the government to create a special Energy Council for social dialogue, information and consultation. The unions state that the challenges in the sector cannot be solved through the current institutions.

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