Significant Amendments in the Labour code

The latest amendments in the Labour Code, effective as from 2 April 2024, have been adopted after long discussions and criticism mostly against the practical implementation of some of the new rules for remote work. The employer shall get acquainted with the changes and prepare additional documentation, in order to comply with the new regulations.

More than one place of remote work and a new definition of remote workplace

It is already possible to arrange more than one place of work (i.e. more than one location, city, village) in the employment agreement, stipulating the remote work. The employer may change the place of work for no more than 30 working days per year upon a written request of the employee in accordance with conditions and procedure, determined in the employment agreement and/or in internal policies of the employer.

The definition of workplace has been changed, and upon remote work this shall be a specific place in a room in the employee’s home or in another room at the employee’s choice outside the employer’s work premises.

Ensuring health and safety at the remote workplace

One of the main purposes of the adopted legislative amendments is to ensure health and safety during remote work.

The amendments introduce a new obligation for the employer – to provide the employees with information about the minimum requirements for health and safety in the room, where remote work is conducted, and for the employee – to provide the employer with written information about the characteristics of the remote workplace, ensured by the employee.

Another new obligation for the employer is to undertake measures to ensure that the remote workplaces comply with the minimum requirements for health and safety, determined in the Health and Safety Act and its implementation acts. The law does not specify what kind of measures could be implemented and the employer shall choose measures, which are in conformity with the peculiarities of the specific remote workplace and with the written information about its characteristics, received by the employee.

In addition, it has been expressly provided that the employer shall notify the remotely working employees about all requirements and rules of the work organization and the work with video displays, which obligation exists towards the employees working in the employer’s enterprise as well (pursuant to Ordinance No. 7 dated 15 August 2005 for the minimal requirements for ensuring health and safety during work with video displays).

Notification about work-related accidents during remote work and a new ground for decreasing the employer’s liability 

The employees are responsible to comply with the employer’s policy for organization of the work and for health and safety during the remote work as well as with the rules for health and safety prescribed to them and are obliged to immediately notify the employer about every accident in the workplace according to a stipulated in advance procedure and manner. Therefore, the employers shall adopt a procedure for notification about accidents by employees, working remotely – in the employment agreement or in internal policies. The statutory law does not provide any specific consequences if the employee breaches their obligation to immediately notify the employer about an accident, occurred at the remote workplace.

A new ground for decreasing the employer’s liability, particularly in the event of a work-related accident occurring during remote work, has been provided – if the injured employee did not comply with the health and safety rules, prescribed to them. The gross negligence of the employee is the general ground for decreasing the employer’s liability, which should be applied in both cases - upon work in the employer’s premises as well as upon remote work.

 Written rules for assignment and reporting of remote work

The amendments provide for the mandatory adoption of written rules, which shall determine:

1. the procedure for assignment and reporting of the remote work and

2. the contents, volume, achieved results, and other characteristics of the work, which are significant for reporting the conducted tasks.

These rules may be a part of the individual and/or collective employment agreement or the employer’s internal policies.
When the assignment and reporting of the remote work shall be made via information systems, the employer is obliged to provide the employee with written information about the type and volume of the work-related data, which shall be collected, processed and stored in that system.

Automated system for reporting the remote work and algorithmic system for remote work management

The amendments in the Labour code reflect the innovations in the field of information technologies, which may be used by employers in their business, and which may affect the rights of remotely working employees, mainly with respect to the automatic reporting of the conducted work.

 The employer may decide that the actual working hours will be reported via an automated system. In this case the employer is obliged upon request by the remotely working employee to provide such employee with access to the data in the system regarding the accounted working hours performed by them. 

Automated reporting is an alternative to the monthly reporting by filling in a standard-form document provided by the employer.

The employer shall choose which manner of reporting the remote work to apply – via an automated system or manual documentation and this shall be specified in writing in the employment agreement or in the employer’s internal policies.
The employer may choose to also implement an information system for algorithmic remote work management, which shall conduct automatic assignment, reporting and control of the remote work. Such a system would generally work without human interaction based on various technological solutions such as artificial intelligence. Therefore, in this case the employer is obliged to provide the employees with written information about the manner in which this system takes decisions. If the employee explicitly requests – the employer shall check that system’s decision and shall inform the employee about the final decision, thus the employer ensures a review by a human being of the automatic decision, which affects the rights of the employee with respect to performing remote work.

Joint liability between the contractor and its direct subcontractor for payment of the employment remuneration of the direct subcontractor’s employees

Before the amendments such joint liability was provided in the Labour Code only for the benefit of posted in Bulgaria workers (in relation to implementing art. 12, para. 1 of Directive 2014/67/EU), but not of employees with ordinary place of work in Bulgaria. Based on the reasons for proposing the amendments, the latter aim to execute the European Commission’s statement that Bulgaria shall adopt in its national legislation non-discriminatory measures for regulation of the liability for payment of the employment remuneration in subcontracting chains, which shall also cover the employees, subject to the Bulgarian employment legislation.

 In practice, a new right of the subcontractor’s employees has been created, which allows them to claim their employment remuneration from a third person/entity, which is not a party in their employment relationship, namely – the contractor, which has re-assigned certain services to their employer (direct subcontractor). The contractor is not liable if it has duly and accurately performed its obligations under the agreement with the employer, which means that the specified right of the employees arises only in the event of unsettled financial relations between their employer (the direct subcontractor) and the contractor. 

 The following issues are not explicitly regulated and shall be a challenge before court case-law:

  •  what are the criteria and the scope for determining the specific employees, which are entitled to a direct claim against the contractor – 1) all employees of the subcontractor or 2) only those employees, who have executed tasks, reassigned by the contractor;
  • for what period the specific amount of the remunerations due by the contractor shall be calculated – 1) for the duration of the contract between the contractor and the subcontractor or 2) according to the time, during which the specific employee has been occupied with tasks, reassigned by the contractor; and
  • under what conditions and in what amount the contractor may claim refunding from the subcontractor of the renumerations, paid to the employees of the subcontractor – 1) the full amount of the paid remunerations or 2) only half of that amount, which is the principal statutory rule upon lack of explicit arrangement in a contract for another distribution of the joint liability in the internal relations between the joint debtors (art. 127, para. 1 of the Obligations and Contracts Act). 

Also, a prerequisite for granting the claims of the subcontractor’s employees against the contractor, is that the contractor itself has outstanding obligations towards the direct subcontractor (otherwise the contractor shall be released from liability, if it has fulfilled its obligations towards the subcontractor). In this case, the subcontractor is entitled to receive from the contractor any remuneration, which is unpaid and outstanding under the contract between them. In this regard, it could be considered to execute a set-off between the contractor’s receivables for refunding the paid employment renumerations and the subcontractor’s receivables for receiving the outstanding renumerations under the contract with the contractor.

 It is important to note that joint liability is provided only between a contractor and a subcontractor. The so used terms of the two jointly liable subjects imply that the contractor conducts services for another subject – a principal. The principal is the subject, standing at the beginning of the chain of re-assigning the services, which originally assigns certain services to the contractor, and the contractor reassigns all or part of those services to another subcontractor. The literal reading of the law leads to the conclusion that the principal is not jointly liable together with the contractor for paying the employment renumerations of the subcontractor’s employees. If the contractor does not re-assign the services to a subcontractor and the relationship remains only on the level principal-contractor, then as per the amendments in the Labour code the principal shall not be jointly liable with the contractor for paying the employment renumerations of the employees of the contractor (as the first subject, directly appointed by the principal) since such joint liability is also not provided in the law, and as a general rule (art. 121 of the Obligations and Contracts Act) must be explicitly regulated in statutory law or arranged in a contract. 

 The conclusion is that joint liability of the principal for payment of the salaries of the contractor’s employees or the employees of the subcontractors in the chain, is excluded from the scope of the law and would arise only if it is specifically stipulated in a contract, under which the principal is a party.

The right to disconnect from work

A new rule has been created in the Labour code, stating that the employee is not obliged to respond to communication, initiated by the employer, during the non-working hours of the working days and the weekend, unless the individual and/or collective employment agreement provides for conditions, allowing otherwise. The right to disconnect from work is applicable for all employees – the ones working in the employer’s enterprise as well as the remotely working employees.

It is not expressly regulated if an option to conduct work communication outside the working hours is provided in the employment contract, then this shall be treated as overtime work and the statutory rules for conducting, reporting and additional payment of overtime work shall be applied accordingly.

This article has been prepared for the purposes of general information only and does not constitute legal advice with respect to any particular subject or situation. For specific legal advice you should contact an attorney-at-law. Stoeva, Tchompalov & Znepolski is not responsible for any legal action undertaken on the basis of the information contained herein.