Bulgaria: The role of governments and social partners in keeping older workers in the labour market

  • Observatory: EurWORK
  • Topic:
  • Social dialogue,
  • Sustainable work,
  • Working conditions and sustainable work,
  • Inequality,
  • Industrial relations,
  • Collective bargaining,
  • Agreements,
  • Published on: 02 June 2013



About
Country:
Bulgaria
Author:
Tatiana Mihailova and Violeta Ivanova
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

Government and social partners work together on policy development for older people in the Interagency Group on Demography, which has developed the National Strategy for Demographic Development of Bulgaria (2012–2020) and the National Concept for the promotion of active aging (June 2012). The programmes and measures to extend the working life of older people are implemented through the National Action Plan for Employment and the Operational Programme ‘Human Resources’ funded by the European Social Fund. Social partners are involved both in developing annual action plans for employment in the Tripartite National Council for Promotion of Employment and in the the monitoring of operational programmes.

1. National background and policy context – the main issues encouraging or preventing the extension of working life in your country

1.1 What are the main barriers in your country for the extension of working life? What are the main barriers in your country for the extension of working life?

  • Pension systems which continue to encourage, or fail to provide appropriate incentives to delay retirement (including the ongoing use of early retirement systems);

Pension system is not a barrier.

  • Taxation systems which make it difficult to combine the receipt of a wage with that of a (partial) pension;

Taxation system is not a barrier.

  • Unemployment benefit systems which do not require older workers to be actively seeking work or which restrict their access to active labour market policy measures;

Unemployment benefit system is not a barrier.

  • particularly large sectors (of national importance) that have predominantly outdated skills or predominantly employ older workers who are shortly expected to leave the labour market;

There is no statistics by sectors and by age.

  • poor quality of working/employment conditions or prospects of personal development in sectors of national importance that force older workers out of employment (sooner);

No data available but according to the interviewed social partners the high tech sectors and IT sector do not employ older workers.

  • any discrimination or stereotypes regarding older workers that hinder their employment or their re-employment;

In Bulgaria there is a well-developed legislation on equal opportunities and non-discrimination in compliance with European legal framework, but the results from a national representative survey of equality and discrimination (2010) show that 13.4% of interviewed think that there is age discrimination. The most common reason for refusing the work for people over 50 years is the age (30.6%) which is almost 2 times higher than in other age categories.

  • provision in employment protection legislation which discourage the recruitment (or retention) of older workers;

It is not a barrier.

  • any other contextual factors constituting barriers to longer and better quality working lives.

The main barrier to the continued involvement of older people in the labour market is high youth unemployment which is a consequence of the crisis. At the end of 2011 it is 19.8 %. The employers prefer to hire young people because they compromising the education and wage. At other hand 35 % of all registered unemployed are over 50 and 34.4% of them have no qualification, making them undesirable workforce.

1.2 In general, what are the main existing policies and other contextual elements contributing to the extension of working life?

Working conditions related aspects

The policy for the extension of working life has been developed and applied based on long-term National Strategy for Demographic Development of Bulgaria (2006-2020), which was updated in 2012. It focuses on delivering high quality human capital, people with their health, education, skills and abilities. In June 2012 the government adopted a concept to promote active aging, which was developed by the Interagency Group on demographic questions, which includes experts from all ministries, social partners, NGOs and academia. The strategic objective of the concept is to create conditions for active and dignified life through ensuring equal access and equal opportunity for participation fully in economic and social life of society. At the moment there are realised programs and measures for older people with the purpose to training and retraining, to subsidise the employers to hire unemployment old people.

Social and labour market aspects

  • Flexible pension systems which significantly reward extending working lives;

In Bulgarian legislation there are no measures that promote early retirement, as well as mechanisms to ensure a smooth and gradual retirement. According to a government decision on pension reform the retirement age will increase by four months per year, starting in 2012. It will increase to 63 years for women (it is currently 60 years) and to 65 years for men (currently 63 years). To a certain extent, the legislation stimulates work after reaching retirement age. If the insurance length of service for a person exceeds that required for retirement and the worker continues to work after reaching pension age, then the person receives an increase in the pension amount for each additional year of insurance service.

  • Taxation systems which encourage working longer (for example in combination with a partial pension)

The taxation system is encouraging to the pensioners who are working. Whatever the type of pension and its amount, and the wages of working pensioners, both incomes are paid in full, and the pension is not subject to taxation.

  • Well-developed care systems (for child or elder care) which limit demand on older workers to take up such roles;

Social infrastructure (homes for children and elderly people) is not sufficiently developed. This is the reason older people do not continue their work activity and to care for dependent members of the family - elderly parents or small children.

  • Active labour market policy measures which effectively encourage the recruitment of older workers (including subsidies).

Unemployed people over 50 are placed in a separate target group that consider as "risk" and any measures envisaged in the Employment Promotion Act and plans for its implementation are applicable to this group. According to Employment Promotion Act are subsidize the employers which hire the unemployed over 50 or from 50 to 64 have acquired professional pension for early retirement.

  • Any other contextual factors constituting contributing to longer and better quality working lives.

According to Labour Code the workers receive supplementary payments in addition to wages, which are proportionate to the accumulated years of service – 0.6 %. This supplementary payment stimulates continued work with the same employer, but increases labour costs and limits the mobility of older workers. It provoked a certain degree of age-discrimination between young and older workers with the same labour productivity.

2. Policies promoting prolongation of working life through the improvement of quality of work

2.1 Developing skills (Training, lifelong learning)

  • Measures / policies / agreements to improve in-work training provision.

Name - Scheme ‘Development’ under OP HRD

Scope - National coverage, covering all occupations, without occupations in sectors agriculture, forestry and fishing

Partners – Government, Social partners and employers in real sector and in the public administration.

Date of implementation - 2010 - 2013

Purpose - to carry out training courses or further professional training of unemployed persons registered in labour offices, to their subsequent inclusion in employment. The trainings are realized by providing vouchers for training representatives of the target group.

Content –the Employers apply in labour office for the necessary skilled workers. The office provides training for registered unemployed persons. Successfully completed the training offered to employers who hires them full-time for a period of 9 to 12 months. For the employers of the real sector the Employment Agency pays the half of minimal country wage and the other half – the employer. In the public sector the EA pays the social security contributions also.

Target groups - unemployed registered in labour offices – 50+, under 29 years, long-term unemployed.

Assessment -

In 2010, the registered unemployed persons over the age of 50 have the highest proportion (43.8%) in the training scheme, and in 2011 - 45.4% compared to the number included in training for the acquisition or improvement of the professional qualification. The share of included in employment after training scheme older workers in 2010 was 51.4% and in 2011 - 47.8%.

Source: Annual Review, 2010 and 2011, Employment Agency.

  • Measures / policies / agreements to validate existing competencies and skills.

There are no measures/policies/agreements to validate existing competencies and skills.

  • Other relevant measures (i.e. promotion of intergenerational skills exchange)

There are no such measures.

  • Others related to this area (i.e. a general initiative in this area)

There are no such measures.

2.2 Health and safety and health promotion

  • Measures / policies / agreements to improve health and safety in the workplace (which go beyond basic legislative requirements)

There are no special measures, policies or agreements that are aimed at older workers. The legislation is fully harmonized with European requirements on safety and health at work. In the branch and sectoral collective agreements measures that are specific for the sector are envisaged - measuring of risk at workplace, workplace accident insurance and life insurance, annual medical examination and others.

  • Measures / policies / agreements to assist in the adaptation of workplaces for (older) workers with limited physical or psychological work capacity, including rehabilitation after incapacity/sickness and integration in the workplace for older workers.
  • Measures / policies /agreements aimed at overall health promotion in the workplace
  • Other relevant measures (i.e. a general initiative in this area)

2.3 Work organisation related measures: flexible working time, career development and horizontal mobility

  • Measures / policies / agreements to support temporal working time flexibility (flexible work schedules, part-time / reduced hours working in the run up retirement, time banks, etc.).
  • Measures / policies / agreements to support geographical flexibility (home working or teleworking policies).
  • Measures / policies / agreements to support functional flexibility (to achieve greater flexibility in who does what and how – for example to enable workers no longer able to do their former job to adapt to carry out new tasks). This could also mean mobility between companies.
  • Measures / policies / agreements to support career development beyond 50+

Title - Scheme “Social innovation in enterprises” on OP HRD

Scope - National

Partners – Government

Period - 2011-2013

Objectives – to implement measures to ensure sustainable employment for persons over 55, to use their expertise for carrying out the training in the workplace and increasing the capacity of other employees in the enterprises.

Content - It is aimed at employers and allows them to choose between a wide range of activities, including employees over 55 in training for trainers and their subsequent use as mentors for new workers that are in disadvantaged position on the labour market. Under the scheme are provide subsidies for salaries and benefits of the trainers over 55 and trips if the training is in another location. The employers can be introduced also flexible working hours for older workers, for example half-time work against which with project funds under the program will provide incentives in the form of additional wages.

Target group - Employees over 55 years.

Results - The scheme started in early 2012 and still no information on the results achieved. The expected results are: 20,000 workplace training; 20,000 persons who have developed career development plans; 250 persons trained as trainers; 21,200 people which have used the preferences for involvement in flexible employment.

  • Other relevant measures related to work organisation (i.e. a general initiative in this area)

2.4 Initiatives related to socio-cultural change

  • Measures / policies / agreements to change “early exit culture”
  • Measures / policies / agreements to promote the value of older workers in terms of performance, competencies and experience
  • Other policies related to promoting changes of attitudes in the society and or in an specific sector about the value of older workers
  • Other (i.e. a general initiative in this area)

2.5 Returning to work for unemployed older people

Policies to improve access to the labour market, especially when 50+ workers are unemployed.

Title – “The measure encourages employers to hire unemployed people over 50” (Employment Promotion Act). Financed by the state budget.

Scope - The program applies to all municipalities in the country.

Partners – Government (Employment Agency)

Date of implementation - 2010 - 2012

Purpose - To provide employment to unemployed over 50 for 12 months.

Content - the state budget provide funds for salaries, fees for basic paid annual leave for each hired 50+ unemployed person and social insurance contributions which would have to pay employer. An employer wishing to use the preference applies to the Employment office for vacancies. After approval by the Council for Cooperation at Employment office, involving social partners is sign a contract with the office to provide funds from the state budget.

Target group - Unemployed over 50 years of age.

Results: In 2010 904 people were hired on this scheme and for 2011 - 518 persons.

Source: Annual Review (2010 and 2011) of EA.

Title – “The measure encourages employers to hire unemployed people from 50 to 64 ages have acquired professional pension for early retirement” (Employment Promotion Act). Financed by the state budget.

Scope - The measure applies to all municipalities in the country

Partners - Government (EA)

Date of implementation - 2010 - 2012

Purpose - To provide employment to hire unemployed people from 50 to 64 ages have acquired professional pension for early retirement for 6 months.

Content - An employer wishing to use the preference applies to the Employment office for vacancies. After approval by the Council for Cooperation at Employment office, involving social partners is sign a contract with the office to provide funds from the state budget for wages and social insurance contributions which would have to pay employer.

Target group – unemployed people from 50 to 64 ages have acquired professional pension for early retirement

Results - There has been weaker interest for this measure. In 2011 average per month has been working 7 people and 8 in 2012.

Source: Annual Review (2010 and 2011) of EA.

Title – Project “A chance to work”. Financing - State budget and planned funds in the National Action Plan for Employment, 2012

Scope – Applies to all municipalities in the country

Partners - Government (Ministry of Labour and Social Policy (MLSP) and Employment Agency (EA) and Confederation of Independent trade Unions in Bulgaria (CITUB), employers.

Date of implementation – 2012 - 2013

Purpose – to increase the competitiveness on the labour market of unemployed youths under 29 years dropped out of school and unemployed persons over 50 years through training, apprenticeship and obtaining skills at the workplace under the guidance of a mentor.

Content – The project provides training to unemployed people aged over 50 years for professions "nurse" and "tailor" and practice in the companies’ partners in the project. The training lasts 300 hours. On successful completion of the traineeships is provided subsidized jobs for a period of six months for employers which are project partners.

Target group – Unemployed people over 50, unemployed young people under 29 years dropped out of school

Results – Expected results (the project just started): training 500 unemployed over 50 and 400 work places for traineeships.

Title – National Programme “Assistance for Retirement”. The program is funded by the state budget.

Scope - National

Partners - MLSP and National Social Insurance Institute (NSII).

Date of implementation – 2010 - 2013

Purpose – Employment and assistance for retirement help for unemployed persons that do not reach the insurance period and age, entitling to pension.

Content – The employer that hires such unemployed is subsidizing by the state budget for wages and social insurance contributions for the necessary period entitling to pension.

Target group - Unemployed persons who are not reach retirement age that permitting pension.

Results – In 2010 was provided employment for 848 unemployed persons in retirement age and in 2011-168 persons.

Source: Annual Review (2010 and 2011) of EA.

  • Others (i.e. a general initiative in this area)

2.6 Comprehensive programmes

  • Initiatives covering various aspects for the improvement of quality of work in order to contribute to longer working lives.
  • Programmes combining working conditions, labour market and welfare aspects.

There are a number of programs, projects and schemes in operational programs providing jobs for unemployed adults and also exempt people over 50 years to be dependent members of households and return them to the labour market.

Title – Scheme "Back to work”, financed by OP HRD

Scope - national

Partners - Government

Date of implementation – 2009- 2012

Purpose – providing training and employment of unemployed registered in employment offices to providing care for children 1 to 3 years of age

Content - The instruction passes unemployed persons who have qualifications in health, education and social activities, and the others pass through five-day training course to acquire knowledge and skills aimed at caring for children. The trained are employed for full-time work for a period not less than 3 months and not more than 24 months, with the end date - the date of completion of three years of the child. For this purpose, the trained persons sign an employment contract. The subsidy that is provided include: wages in the amount of minimum wage established for country and social insurance contributions paid by the employer.

Target group - Unemployed persons registered at the labour offices, mainly in retirement age, and individuals with education and training in health, education and social activities

Results - In 2011 1084 persons were included in the training scheme (of which: 91 from healthcare , education and social activities are included in the instructions). 1,064 unemployed are included in the employment on the project. In 2011 the number of included persons in training scheme is increased compared to the previous year with 27.5% and employment with 49.2%. No data about the proportion of adults who are unemployed.

Source: Annual Review (2010 and 2011) of EA.

3. Views of Social Partners on the role of working conditions for keeping older workers in the labour market

Employers and unions agree that the working life of older people in Bulgaria should be extended. They work together in the working group on demographic issues, where they developed strategic documents, including documents for extending the working life of older people.

The social partners participate as in the development of the Law on Employment Promotion as well as in the design of the National Action Plan that are adopted by consensus.

According to employers, key issues to improve the conditions for extending the working life of older people should be placed on providing flexible forms of work and adapt their knowledge and skills to the labour market.

Trade unions believe that must expand opportunities for subsidized employment for older people, including through the development of projects by social partners on the operational programs.

The current model of retirement is adopted with consensus by the social partners, but during the interviews with some representatives emerged radically different views on certain texts of laws affecting pension system.

The employers will insist for the abolition of additional payments to the monthly salary for length of service (which is now an incentive to prolong working life). The government is with same opinion. The argument is that it creates tension and discrimination between generations. Trade unions are with the opposite view and will insist on maintaining the motivational nature of this measure.

4. Commentary

The social partners are involved in the development of government policy to extend the working life of the adult persons, but the data above show that some of the measures are not used enough by employers. There are no initiatives by the side of the social partners for development and implementation of projects by sector.

Tatiana Mihailova and Violeta Ivanova, ISTUR

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