Employees will be entitled to apply for the bankruptcy of their employers’ firms if their salaries are delayed, and will be at the top of the list of creditors to be paid, according to proposed changes to Bulgaria’s Commercial Code circulated for discussion.
"The goal is to protect the rights and interests of workers," according to an explanatory memorandum on the proposed amendments.
There have been a number of high-profile cases of employees of Bulgarian firms being forced by employers to wait for months for unpaid salaries.
In 2011, the Labour Ministry issued about 2300 citations for unpaid salaries. Labour Ministry intervention led to a total of BGN 165 million being paid out in unpaid salaries, although Labour Minister Totyu Mladenov said that intervention by his Ministry had not always proved successful.
Current law allows bankruptcy proceedings to be initiated by debtors, creditors, liquidators or the National Revenue Agency. If changes to the Civil Procedure Code are approved, this would be extended to include employees whose salaries have not been paid.
The changes to the Civil Procedure Code would allow an employee to approach a court for a writ against the company that employs them, and take it to the bailiff to impose a lien on the employer’s property.
The change in the order of priority for debts to be settled by a bankrupt company would be significant – currently, employees rank below tax authorities, other state institutions and banks in the priority list.
After public discussion of the proposed amendments, they will be put to the Cabinet for approval and, if given the nod, will be tabled in Parliament.