Protection of Workers' Claims (Employer's Insolvency) Convention, 1992 (No. 173) - Bulgaria (Ratification: 2004)

Replies received to the issues raised in a direct request which do not give rise to further comments (CEACR) - adopted 2019, published 109th ILC session (2021)

The Committee notes the information provided by the Government, which answers the points raised in its previous direct request and has no further matters to raise in this regard.

Direct Request (CEACR) - adopted 2012, published 102nd ILC session (2013)

Article 6 of the Convention. Protection of workers’ claims by means of a privilege. Scope of protected claims. Further to its previous comment, the Committee notes the Government’s explanations that the terms “labour remuneration due under individual employment contract” and “monetary compensations owed by the employer under a legal regulation” in section 3 of the Act to Guarantee the Employees’ Receivables in Case of Insolvency of the Employer of 2004 (Wage Guarantee Act) are meant to cover all sums payable by the employer under an employment contract, including wages, annual leave and all other types of paid leave or paid absence, as well as compensation for terminating the employment relationship. The Committee observes, however, that these explanations refer to the legislation concerning the wage guarantee fund, whereas the Commercial Law of 1991, which regulates the order of distribution among privileged creditors, refers generally to claims deriving from employment contractual relations. The Committee accordingly requests the Government to specify how it ensured that the preferential treatment of workers’ claims in bankruptcy proceedings covers at least unpaid wages as well as claims for holiday pay, other types of paid absence and severance pay, as required under Article 6 of the Convention.

Articles 9 to 13. Protection of workers’ claims by a guarantee institution. The Committee notes the Government’s indication that, pursuant to the Law on the State Public Social Security Budget, it has been decided that no contributions would be paid in 2011 to the wage guarantee institution because of the accumulation of sufficient funds. In this connection, the Committee notes the comments made by the Confederation of Independent Trade Unions in Bulgaria (CITUB), according to which the CITUB and the Labour Confederation “Podkrepa” may have consented to the suspension of employers’ contributions for 2011 owing to exceptional circumstances linked to the crisis but they would not be prepared to accept similar measures in 2012. Noting that under section 14 of the Wage Guarantee Act, the fund is primarily financed through compulsory employers’ contributions, and also noting that in recent years the rate of the employers’ contribution decreased from 0.5 to 0.1 per cent, the Committee requests the Government to further explain the reasons that led to the suspension of the employers’ contributions to the fund and also to clarify how it ensures under the circumstances that the payment of workers’ claims arising out of the employer’s insolvency remains guaranteed. Moreover, noting that, under section 22 of the Wage Guarantee Act, the payments guaranteed by the fund are limited to a prescribed amount which, however, may not be lower than two-and-a-half times the national minimum wage, the Committee requests the Government to indicate how it is ensured that the maximum amount is maintained at a socially acceptable level, as prescribed by Article 13 of the Convention.

Direct Request (CEACR) - adopted 2011, published 101st ILC session (2012)

The Committee notes that the Government’s report has not been received. It hopes that a report will be supplied for examination by the Committee at its next session and that it will contain full information on the matters raised in its previous direct request, which read as follows:

Repetition

Article 6 of the Convention. Scope of claims protected by privilege. The Committee notes that section 722(1) of the Law on Commerce (State Gazette No. 48 of 18 June 1991, as last amended – State Gazette No. 61 of 2002), which determines the order of distribution among privileged creditors of the liquidated assets of an insolvent employer, grants fourth-rank privilege to workers’ claims deriving from employment contractual relations which may have occurred up to one year prior to the initiation of the bankruptcy proceedings. It also notes that section 94(1) of the Law on Bank Bankruptcy (State Gazette No. 92 of 27 September 2002, as last amended – State Gazette No. 105 of 2005) places workers’ claims at the sixth position. The Committee notes, however, that these provisions refer generally to claims deriving from employment contractual relations without specifying the types of privileged service claims, such as wages, holiday pay, other forms of paid absence (e.g. sick leave or maternity leave) and severance pay. The Committee therefore requests the Government to specify the legal provisions which ensure that all four entitlements referred to in this Article of the Convention are treated as privileged debts in bankruptcy proceedings.

Article 12. Scope of claims protected by a wage guarantee institution. The Committee notes that sections 3 and 22 to 24 of the Act to Guarantee the Employees’ Receivables in Case of Insolvency of the Employer (State Gazette No. 37 of 4 May 2004, as last amended – State Gazette No. 105 of 22 December 2006) provide that the guaranteed service claims consist of unpaid wages, monetary compensations, and contributions to social security institutions. It notes, however, that no provision is made for other claims, such as claims for holiday pay and other types of paid absence, which according to this Article of the Convention must also be part of the minimum coverage of a wage guarantee institution. The Committee therefore requests the Government to provide further explanations on the legal provisions extending protection to the four categories of worker claims set out in this Article of the Convention.

Part IV of the report form. Practical application. The Committee would be grateful if the Government would provide in its next report general information on the practical application of the Convention, particularly as regards the operation, financing and management of the wage guarantee institution, including for instance the current rate of the employers’ compulsory contribution, any available statistics on the number of applications received, claims settled and sums paid per year, etc.

Direct Request (CEACR) - adopted 2007, published 97th ILC session (2008)

The Committee notes with interest the first report presented by the Government on the application of the Convention. The Committee would appreciate receiving additional information on the following points.

Article 6 of the Convention. Scope of claims protected by privilege. The Committee notes that section 722(1) of the Law on Commerce (State Gazette No. 48 of 18 June 1991, as last amended – State Gazette No. 61 of 2002), which determines the order of distribution among privileged creditors of the liquidated assets of an insolvent employer, grants fourth-rank privilege to workers’ claims deriving from employment contractual relations which may have occurred up to one year prior to the initiation of the bankruptcy proceedings. It also notes that section 94(1) of the Law on Bank Bankruptcy (State Gazette No. 92 of 27 September 2002, as last amended – State Gazette No. 105 of 2005) places workers’ claims at the sixth position. The Committee notes, however, that these provisions refer generally to claims deriving from employment contractual relations without specifying the types of privileged service claims, such as wages, holiday pay, other forms of paid absence (e.g. sick leave or maternity leave) and severance pay. The Committee therefore requests the Government to specify the legal provisions which ensure that all four entitlements referred to in this Article of the Convention are treated as privileged debts in bankruptcy proceedings.

Article 12. Scope of claims protected by a wage guarantee institution. The Committee notes that sections 3 and 22 to 24 of the Act to Guarantee the Employees’ Receivables in Case of Insolvency of the Employer (State Gazette No. 37 of 4 May 2004, as last amended – State Gazette No. 105 of 22 December 2006) provide that the guaranteed service claims consist of unpaid wages, monetary compensations, and contributions to social security institutions. It notes, however, that no provision is made for other claims, such as claims for holiday pay and other types of paid absence, which according to this Article of the Convention must also be part of the minimum coverage of a wage guarantee institution. The Committee therefore requests the Government to provide further explanations on the legal provisions extending protection to the four categories of worker claims set out in this Article of the Convention.

Part IV of the report form. The Committee would be grateful if the Government would provide in its next report general information on the practical application of the Convention, particularly as regards the operation, financing and management of the wage guarantee institution, including for instance the current rate of the employers’ compulsory contribution, any available statistics on the number of applications received, claims settled and sums paid per year, etc.