Our team achieved significant success defending a client before the Supreme Court of Cassation (SCC) in an employment dispute related to the amount of remuneration in the event of reduced working hours established by the employer in the event of a declared state of emergency or emergency epidemic situation (Article 138a, para. 2 of the Labour Code).
The Court held that in this case the general rule set out in Article 247, para. 1 of the Labour Code shall apply. As per the said rule the amount of remuneration depends on the actual duration of working time. This decision not only protected our client's interests but also contributed to clarifying the new legal regulation of employment relations during the period of a declared state of emergency or a declared epidemic situation.
In connection with the declaration of the state of emergency in Bulgaria and the need to regulate labour relations, a new paragraph 2 has been introduced to Article 138a of the Labour Code, effective from 13.03.2020. The new paragraph provides the employer with the possibility to unilaterally establish reduced working time for full-time employees in the enterprise or at unit thereof for the entire period of the declared state of emergency or for part of this period. The aim pursued by the new paragraph 2 of Article 138a of the Labour Code is to preserve employment by giving the employer the possibility to reorganize its activities during the state of emergency or the epidemic situation. Subsequently, an amendment to Article 138a, para. 2 of the Labour Code was adopted, with effect from 14.05.2020. The amendment provides that an employer may introduce reduced working time in the enterprise or at a unit thereof not only in the event of a declared state of emergency but also in the event of a declared epidemic situation.
A legal dispute arose between parties in an employment relationship concerning the amount of remuneration due to an employee who worked reduced hours under the terms of Article 138a, para. 2 of the Labour Code. Given the absence of case law on the matter and pursuant to Article 280, item 3 of the Civil Procedure Code, the case was admitted to cassation appeal. With a decision dated from January 22.01.2025, the SCC definitively resolved the issue of the amount of remuneration due to an employee who worked under the terms of Article 138a, para. 2 of the Labour Code.
According to the decision of the SCC, in case of unilateral establishment of reduced working time on the basis of Article 138a, para. 2 of the Labour Code, the general rule set forth in Article 247, para. 1 of the Labour Code shall apply. As per the said general rule the amount of remuneration depends on the actual duration of the hours worked. The arguments supporting the decision of the SCC is the absence of a special law derogating the application of the general provision and the rule against unmerited gain.
In the case of Art. 138a, para. 2 of the Labour Code, the provision of Art. 267a of the Labour Code, according to which the employee is entitled to his/her gross remuneration for the period of cessation of work during a declared state of emergency or epidemic situation (Art. 120c of the Labour Code), could not be applied. The provision of Art. 267a of the Labour Code is a special norm and compulsory and cannot be interpreted broadly, nor applied by analogy to other situations not expressly provided for by the law.
Teodora Shopova, Senior Associate, Gugushev & Partners, PONTES
