The Bulgarian Labour Code outlines specific compensation requirements when either the employer or employee fails to adhere to the notice period during employment termination. This article will delve into the details of these compensations, including the calculation methods and applicable scenarios.
Compensation for Employee’s Early Departure
Suppose an employee wishes to leave their current job before the end of their agreed-upon notice period. In that case, they must pay the employer a compensation equal to the gross salary for the unobserved period. This compensation ensures that the employer has sufficient time to find a suitable replacement.
Compensation for Employer’s Early Termination
In cases where the employer terminates the employment relationship before the employee’s notice period expires, the employer owes the employee compensation equivalent to the gross remuneration for the unobserved period. This provision safeguards the employee’s financial interests during the transition.
Key Provisions and Calculations
- Notice Period: The notice period is 30 days, unless the parties have agreed on a longer period, but not longer than three months for indefinite-duration contracts and 3 months for fixed-term contracts, up to the contract’s expiry date.
- Compensation Calculation: The compensation is based on the employee’s gross remuneration for the month preceding the month in which the grounds for the relevant compensation occurred, or the last monthly gross labour remuneration received by the employee, unless otherwise provided.
- Non-Deduction: Compensation for unobserved notice periods cannot be deducted from the employee’s final pay.
- Notice Start Date: The notice period starts on the day following its receipt.
- Calculation Basis: The compensation is calculated based on the employee’s departure date.
- Social Security Contributions: Neither the employer nor the employee is liable for social security contributions on these benefits.
- Taxation: The compensation is subject to taxation.
Conclusion
The Labour Code’s provisions regarding compensation for unobserved notice periods provide a framework for fair financial settlements between employers and employees upon termination of the employment relationship. Understanding these regulations is crucial for both parties to ensure compliance and avoid disputes.
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