Collective bargaining in Bulgaria

According to the Labour Code (Article 51), collective labour agreements (CLAs) in Bulgaria are concluded at enterprise, branch or sector, and municipal levels. At the first two levels, only one CLA can be concluded. Usually, the branch or sectoral agreements set out the general and minimum elements of quality of work, which in most cases must not be higher than those set out in labour legislation.. The social partners involved in the company-level CLA can negotiate more favourable clauses for better working conditions. At municipality level, the collective agreements are concluded for activities that are financed from the municipality budgets, such as education, health and social services (municipality-level CLA).

There is no wage bargaining coordination. Decentralisation of wage bargaining has been a typical trend for Bulgaria since 1989, and this was reinforced during the 2007–2008 financial crisis’.

CLAs are valid for social partners that have signed the agreement, but also for non-trade union members, which can join the collective agreement under certain conditions, in accordance with the Labour Code.

NICA maintains an integrated database for CLAs and CLDs. It serves as a reference and enables the provision of information on collective bargaining agreements (CBAs) and collective labour disputes. The national statistics for 2010–2021 provided by NICA also cover the public sector, education and health. For 2010–2014, almost half of the CLAs at company level were in education. The other sectors that each had more than 6% of the CLAs are health, manufacturing and state administration. According to NICA, in 2021 over 80% of concluded CBAs and their annexes were in the services sector, over 15% in the industrial sector and 4% in the agriculture, forestry and fisheries sector. For 2010–2021, 14.1% of CBAs and annexes were in the private sector, while 85.9% were in the public sector.

The 2016 NICA report on CLAs shows that, in 2016, approximately 290,000 employees were covered by CLAs, of whom 38,701 were working in state administration, 88,000 were employed in industry and 155,000 were employed in services (62.6% of all CLAs). By the end of 2021, compared with the baseline year of 2011, there was an increase of more than 10 percentage points in the number of employees covered by CLAs in force at company level. There was a considerable increase of 245.1 percentage points from 2017 to 2018 for government employees as a result of an agreement for employees in the Ministry of the Interior (NICA, 2021a).

Under the rules for the provision and exchange of information between NICA and the Executive Agency of the General Labour Inspectorate, NICA has access to the Register of Collective Labour Agreements of the General Labour Inspectorate.

European-level statistics point to collective wage bargaining coverage of between 17% (2019) and 34% (2010) within private sector establishments and suggest a fall in coverage since 2010.

Collective wage bargaining coverage of employees

Notes: * Private sector companies with >10 employees (NACE B-S); multiple answers possible. ** Companies with >10 employees (NACE B-S, excluding O); single answer for each local unit; more than 50% of employees covered by such an agreement; percentage of employees working in local units where more than 50% of the employees are covered under a collective pay agreement out of the total number of employees in the scope of the survey.
Sources: Online dataset codes: [earn_ses10_01], [earn_ses14_01], [earn_ses18_01].

Pay higher than the minimum wage has been agreed in 29% of the establishment-level CLAs, covering 29% of employees. Out of a total of 1,515 company-level CBAs in force on 31 December 2021, 508 – or 33.5% (covering 102,895 employees, or 29.2% of all employees in Bulgaria) – involve the negotiation of an enterprise minimum wage higher than the current minimum statutory wage (BGN 650). The main observation is that, since 2017, the number of CLAs has been increasing, but the number of covered employees has been decreasing.

Source: NICA, 2021a.

The main issues in bargaining, covered by all levels of CLAs, are related to employment, pay and working conditions.

Industry-level (sector-level) CLAs include general sector-specific issues such as details of bonuses for productivity, quality of work, hazardous working conditions, working time, health and safety at work, redundancy procedures, protection against discrimination, work–life balance and information and consultation issues.

Municipal-level CLAs concern activities such as those in education, healthcare and culture that are financed by the municipality budgets. Municipal CLAs cannot provide for less favourable employment and working conditions than the sectoral CLAs.

Company-level collective agreements are more detailed and cover qualification requirements, specific working time and leave, pay rates, health and safety, social insurance, trade union activities, dispute procedures and social benefits.

There is no collective bargaining at national level, although social dialogue at national level is represented in the NTCC, discussing all labour-related legislative changes and policies. Bulgaria has a minimum wage, which is set by the government after consultation with employers and unions in the NTCC.

The total number of effective company CLAs has been subject to a steady decline since 2012, from 2,084 in the baseline year of 2011 to 1,820 in 2017 (decrease of approx. 13%) and 1,682 in 2019 (decrease of approx. 23%). During the past three years, the number of effective CLAs at company level has decreased. At municipal and sectoral/branch levels, the number has remained almost the same.

Effective CLAs by bargaining level at year end, 2011–2022

Source: NICA, 2022.

Levels of collective bargaining, 2022

Notes: The statutory minimum wage is set out in legislation. CLAs can set the minimum wage at sector/company level, but not lower than the statutory minimum wage for the country. Working time is also set in accordance with legislation. Company-level CLAs can sometimes set out working times and shifts within legislative provisions.
Source: Authors’ own elaboration.

There is no comparative information or specialised legislation prescribing how the levels are linked to each other. One of the possible practices could be that, if a company is within a sector with a CLA, the company agreement will use most or all of the provisions agreed for the sector, and will try to upgrade at least some of them. However, there are companies with very detailed and comprehensive CLAs. In 2017, in the sectors K, L, N, O and S (in 2014, the sectors J, K, L, M, N, O and S. See NACE codes in the 'Pay' section) there were no sectoral CLAs, but there were company-level CLAs (according to NICA).

The Labour Code prescribes the maximum duration of collective agreements as two years, and this duration is usually adopted. Therefore, there is no specific month or time of year when the negotiations generally begin. Negotiations are usually initiated three months before the expiry of the validity of the previous collective agreement. This applies to the sectoral/branch and company collective agreements on the condition that company contracts comply with the existing minimum levels at sectoral/branch level.

The sectoral CLAs establish the minimum wage for the sector (with individual variations depending on level of education, nature of work and working time). The employer may adopt or increase it (or decrease it in cases of derogation), taking into account the company’s economic situation, but wages may not be less than the minimum statutory pay.

Vertical CLA coordination (Chapter 4, Labour Code 1986) has been replaced by the adoption of the traditional type of collective bargaining, with negotiations between equal partners or their representatives. The most important type of CLA in Bulgaria is at company level, followed by branch/sectoral CLAs.

According to the Labour Code (Article 54b:4):

when the collective agreement at sectoral or branch level is concluded between all the representative organisations of workers and employers in the sector or industry, at their joint request the Minister of Labour and Social Policy may extend the application of the contract or of its individual clauses in all enterprises of the sector or industry.

The role of sectoral collective agreements has become more significant since 2010–2011, when the clause extending them to all companies in the respective sector came into force. The Minister for Labour and Social Policy, after consulting the social partners, extended the validity of collective agreements in water supply (February 2010) and sewerage (September 2012), brewing (May 2010, November 2011, September 2013, May 2022), cellulose paper (August 2010, July 2012), wood processing and furniture (2010), mining (May 2011), metallurgy (2011) and exploration, extraction and processing of mineral resources (May 2011, June 2018). The Register of Collective Labour Agreements of the General Labour Inspectorate includes information about the extended, ongoing and expired CLAs. The decisions to extend sectoral CLAs are also available in this register. The extension mechanism has been in use since 2012–2014.. For example, the 2011–2018 industry (branch) collective agreement for the industry ‘Exploration, production and processing of mineral resources’ has been extended for all companies operating in NACE sectors B5, B6, B7, B8, B9, C19.2, C20.51, C23.52, C23.62, C23.7, F42, F43.13, H49.41 and M72.

The Labour Code provisions on collective bargaining were changed in 2020 to include a simplified sector/branch CLA extension procedure (Article 51b, paragraph 4) and to establish fair mechanisms for joining a CLA (Article 57, paragraph 2).

If there are financial difficulties in companies (including in subsidiaries of multinational companies), the sectoral/branch or company CLAs are able to set wages lower than those negotiated in collective agreements for a limited period, but they must not be less than the national monthly minimum statutory wage. For instance, the 2015 annex of the metal industry CLA provides for a lower wage where there are reduced volumes of work or shrunken market shares.

A collective agreement should be concluded for a period of at least one year. If not specified, it could last up to two years. The parties may agree a shorter duration for some of its clauses (Labour Code, Article 54:2). Negotiations for a new collective agreement should commence not later than three months before the expiry of the current collective agreement.

Peace clauses exist in Bulgarian CLAs. From 2017 to 2021, the number of CLAs with peace clauses has increased.

CLA’s with peace clause for the period 2017–2021

Source: NICA, 2021a.

Since 2019, NICA has observed peace clauses in active CLAs, as shown in the table below. Note that one CLA could include more than one peace clause.

Source: NICA, 2021a.

In almost all sectoral/branch and company collective agreements there are clauses concerning training, but rarely lifelong learning. As part of the sectoral CLA, the social partners in the metal industry have agreed to set up regional training centres. In the textile sector, branch funds have been set aside for workers to get qualifications. In construction, employers have agreed to set up a special training fund. Usually, CLAs include clauses covering almost the entire range of employment aspects: pay and benefits, working time and leave, and health and safety.

Almost all collective agreements contain a general provision for equality and non-discrimination at work.