Dispute-resolution mechanisms introduced

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2003 saw the establishment of the National Institute for Reconciliation and Arbitration, Bulgaria's first institution for the out-of-court resolution of collective labour disputes. The new Institute provides mediation and arbitration, and is seen as filling a major gap in the country's industrial relations system.

In 2001, a law amending the Labour Code established a National Institute for Reconciliation and Arbitration (NIRA), on the basis of a proposal made by the social partners to the government. After a delay of almost two years, the Institute was set up in 2003.

NIRA’s main activity is, for the first time in Bulgaria, to provide mediation and arbitration for the settlement of collective labour disputes. The institute is also to create and maintains a national database of:

• collective agreements;

• collective labour disputes arising and their reasons;

• methods and deadlines for the settlement of collective labour disputes;

• the number of people involved in collective labour disputes; and

• data on conciliators and arbitrators, their qualifications and the disputes in which they have intervened.

The governing body of NIRA is its supervisory board. It consists of 14 representatives of the state (appointed by the Minister of Labour and Social Policy) and of representative organisations of workers and employers. At present, the Confederation of Independent Trade Unions in Bulgaria (CITUB) and the Confederation of Labour Podkrepa (Podkrepa) have the status of representative organisations of workers (BG0307204F), while the employers’ associations recognised as representative are the Bulgarian Industrial Association (BIA), the Bulgarian Chamber of Commerce and Industry (BCCI), the Union of Private Bulgarian Entrepreneurs Vazrazhdane (UPBE) and the Union for Private Economic Enterprise (UPEE) (BG0310103F).

In its capacity as the managing body of NIRA, the supervisory board plans, organises and controls the activities of settling collective labour disputes through conciliation, mediation and arbitration.

NIRA’s director is appointed by the Minister of Labour and Social Policy, after consultations with the NIRA supervisory board.

A conciliator or mediator must be a person specified in a list approved by the supervisory board of NIRA and nominated by the state and nationally representative organisations of workers and employers. Each of the three parties represented on the supervisory board can nominate up to 12 mediator and up to 12 arbitrators.

The parties to a dispute pay a fee to the mediator or arbitrator, which is determined by agreement.

Mediation

The law provides that mediation may take place when a collective labour dispute cannot be settled by direct negotiations between the parties to the dispute, or when one of the parties refuses to negotiate. The mediation procedure can be used by mutual agreement between the parties, or at the request of one of the parties.

The mediation procedure is initiated by a written request to NIRA, specifying the parties to the dispute and the substance of the dispute. This request must include a proposal by the disputing parties of the preferred mediators to be assigned to reviewing the dispute. The mediation should be carried out within seven business days. This deadline may be extended by agreement between the parties, but cannot be longer than 14 business days.

Mediators do not settle the dispute or impose an agreement. They must observe in their actions the principles of voluntarism, impartiality, competency, confidentiality, objectivity and responsibility in fulfilling their obligations, and must support the parties through all possible and requested means and show solidarity with other mediators.

The mediation procedure ends with one of the following results:

• a signed agreement to resolve the collective labour dispute;

• an agreement to initiate an arbitration procedure (see below); or

• expiry of the set deadline, if an agreement could not be reached.

Voluntary arbitration

When a collective labour dispute had not been settled through direct negotiations or a mediation procedure, the parties may request its resolution by an individual arbitrator or an arbitration commission. This voluntary arbitration procedure may occur only if the parties have reached a written agreement to this effect.

If the parties choose to have the dispute resolved by an individual arbitrator, this should be a person they have chosen jointly from the list of arbitrators maintained by NIRA. When the parties decide to use an arbitration commission, they decide on the number of members and each of the parties nominates an equal number of arbitrators.

The arbitration procedure requires the dispute to be resolved through an open hearing, to which the parties are summoned. During the hearing, the commission hears the opinions of the parties, divides the 'disputable' from the 'indisputable' points, and discusses the presented evidence that is of importance for resolving the dispute. The procedure involves two hearings at most and the period between the two may not be longer than seven days, unless the parties have agreed on a larger number of hearings.

The arbitration decision is binding, in compliance with the provisions of the relevant legislation. The arbitrator(s) may instead convince the parties to end the dispute through an arbitration agreement. The legal standing of this agreement is the same as that of an arbitration decision. Decisions reached by an arbitrator or an arbitration commission, or agreements reached between the parties with the active participation of the arbitrator or commission, are binding upon the parties.

The arbitration decision is final and is not open to appeal.

Commentary

Hundreds, or maybe thousands, of labour conflicts in Bulgaria over the past 12-13 years have resulted in strikes, due to the lack of efficient legal dispute-resolution mechanisms and the lack of a tradition of seeking amicable settlements. The development of industrial relations in Bulgaria since the beginning of its period of transition in 1989 thus showed that there is a clear need to create mechanisms for the amicable out-of-court settlement of collective labour disputes. The expectations of trade unions and employers are that the new regulations on mediation and arbitration will increasingly be used in practice as a reliable mechanism for the professional and durable resolution of industrial conflicts. (Svetlana Lyubenova, Balkan Institute for Labour and Social Policy)