30.06.2022
SOCIAL SECURITY FOR SOLE PROPRIETOR (SP)
A sole trader, also called a sole proprietor, is a physically capable person who represents his business. This is also the reason why many sole traders use their own names as the company name.
What happens to social security when a sole trader suspends his activity and what should he do to stop his insurance?
Sole proprietors are compulsorily insured for invalidity due to general illness, old age and death for the time during which they exercise in this capacity.
The principle of insurance only for the periods during which employment is exercised is laid down in the Social Security Code, on the basis of which insurance arises from the day on which persons start employment and for which insurance contributions have been paid or are due, and continues until the cessation of this activity.
If the trader intends to temporarily suspend his activity and in connection with the above the grounds for payment of social security contributions shall cease to exist.
According to the law, upon commencement, interruption, resumption or termination of any employment, the self-employed person submits a declaration in an approved form by the Executive Director of the National Revenue Agency (NRA) to the competent territorial directorate of the NRA, signed by the self-employed person. day term from the occurrence of the circumstance.
In order to declare an interruption of his insurance, the sole trader must submit to the competent territorial directorate of the NRA a completed Declaration for registration of a self-insured person. That declaration shall state the date on which it ceases to operate.
The interruption of the insurance by the self-insured person of a sole trader also interrupts his insurance length of service.
When resuming his activity, the sole trader should also state the date on which he starts working. This is done again with the submission of a Declaration for registration of a self-insured person. It is important to note that if the insurance is resumed in the same calendar year, the trader cannot change the type of insurance and must pay insurance contributions for the social risks selected before the interruption. Social security contributions are also paid for the same risks when the activity is resumed in the next calendar year, if this has not been declared within the respective term.
Change of the selected social risks can be done only in the period from 01.01. to 31.01. of each calendar year.
Reference:
Art. 1, para. 2 of the Ordinance on the social security of self-insured persons, Bulgarian citizens working abroad and seafarers.
Art. 4, para. 3, item 2 of the Social Security Code
Art. 10 SSC
30.06.2022
18% OF UNEMPLOYED WOMEN IN BULGARIA HAVE NOT LOOKED FOR WORK AT ALL IN 2021
The proportion of women aged 25-54 in the European Union who did not look for work at all, compared to all unemployed women, was higher (18.5 percent) than that of men (8.2 percent) in the same age group in 2021, informs Eurostat.
The EU's statistical office reports a significant difference in the reasons why unemployed women and men between the ages of 25 and 54 did not look for work.
The share of women who did not try to find a job due to the need to care for a loved one (5.7 percent) or for other family reasons (2.9 percent) was significantly higher than that of men. A total of 0.5 percent of them did not look for work in 2021 due to the above reasons.
In half of the EU countries, the proportion of women between the ages of 25 and 54 who emphasized the need to care for a loved one was over 5% of all unemployed women who did not look for work at all. The largest number of these women was in 2021 in the Czech Republic (12.8 percent). Romania (11.0 percent) and Ireland (8.2 percent) follow. The EU countries with the fewest unemployed women who did not look for work due to the need to care for a loved one were Denmark (0.9 percent), Sweden (1.5 percent) and Slovenia (1.8 percent).
In Bulgaria, the share of these women in 2021 was 5.4 percent. Ladies between the ages of 25 and 54 who did not look for work at all accounted for 18.8 percent of all unemployed women. For men, this percentage was 11.2.
In only one EU country, the total proportion of men who did not try to find a job because of the need to care for a loved one or for other family reasons was over 1 percent - Ireland (1.1 percent). In Bulgaria, these men were 1 percent of the unemployed gentlemen between the ages of 25 and 54 who did not look for work at all.
15.06.2022
HOW IS THE LIQUIDATION OF A COMPANY CARRIED OUT?
A company can be terminated for many different reasons. This can happen, for example, when it is declared bankrupt. Or by court decision in strictly defined by law cases. Termination may be on different grounds, depending on the type of company. For example, a limited liability company may be terminated due to the expiration of the company contract, by decision of the partners, taken by a majority of 3/4 of the capital, in case of merger and acquisition. A sole proprietorship Ltd. is terminated with the death of a natural person, if he owns the capital, unless the heirs want to continue the activity. A joint-stock company is terminated by a decision of the general meeting, by a court decision, if it does illegal things, if the net value of the company's property falls below the amount of the subscribed capital, etc.
Here again, it is important to note that after the dissolution of the company in question, liquidation must take place.
According to the Commercial Act (CA), the term in which the liquidation must be completed is determined by the general meeting of the limited liability company and the joint stock company, and for other companies - by unanimous decision of the general partners. Such a term shall also be determined by the registration official at the Registry Agency when he appoints liquidators. If necessary, the specified period may be extended. The liquidators shall be entered in the commercial register, where notarized consents with samples of their signatures shall be submitted. They have the same responsibility for their liquidation activities as the managers and other executive bodies of the companies.
The liquidators are obliged, by announcing the termination of the company, to invite its creditors to present their claims. The invitation is sent in writing to the known creditors and is announced in the commercial register. The liquidators are obliged to notify the National Revenue Agency of the commencement of the liquidation.
The CA also obliges them to complete current transactions, collect receivables, turn the remaining assets into money and satisfy creditors. They may enter into new transactions only if required by the liquidation.
The liquidators may, in agreement with the partners, respectively with the shareholders and creditors, transfer to them individual objects of the liquidation property, provided that this does not infringe the rights of the other partners and creditors. The CA explicitly states that the liquidator is obliged to exercise his powers with the care of a good trader.
It is important to note that they represent the company and have the rights and obligations of its executive body. They compile a balance sheet at the time of the dissolution of the company and a report that clarifies the balance sheet. At the end of each year, they carry out an annual closure and submit an annual financial report and an annual report on their activities to the governing body. The governing body shall decide on the adoption of the opening balance sheet, the annual closure and the discharge of the liquidators.
The property that remains after the satisfaction of the creditors is distributed among the partners, respectively among the shareholders. However, this distribution takes place only if six months have elapsed since the day on which the invitation to creditors was published in the commercial register. The governing body of the company may, after satisfying the creditors, write off the receivables of the company, which are uncollectible. The decision shall be taken by a simple majority.
When all obligations are settled and the rest of the property is distributed, the liquidators want to delete the company. If it is later determined that further liquidation actions are required, the Registrar of the Registry Agency shall, at the request of the person concerned, appoint the current or other liquidators.
15.06.2022
PROHIBITION OF COMPETITIVE ACTIVITY
Expert comment
A non-compete clause as part of an employment contract or bond agreement is a common way to protect the interests of an economically stronger country, whether it is an employer or a company investor. The possibilities for including such clauses, their validity and manner of implementation depend on the nature of the contractual relationship between the parties. Most often, these clauses are guaranteed by penalties agreed in the contracts, the validity of which is also the subject of further investigation, but very often their very presence deters the other party from engaging in competitive activities.
The prohibition of competitive activity can be considered in general in the following areas:
Prohibition to perform competitive activity under employment contract:
Until 1998, the Law on Protection of Competition stipulated a hypothesis according to which a person who is in an employment relationship may not engage in competitive economic activity for a period of three years after the termination of the employment contract. With the repeal of this provision, this legal restriction for employees has also been lifted. The fact that there has been no such legal restriction option for many years does not deter employers from including such clauses in their employees' employment contracts.
According to the constant practice of the courts, the right to work and the exercise of a profession is imperatively guaranteed by Art. 48, para. 3 of the Constitution and such a restriction of this constitutionally regulated right could not be the subject of a bond transaction. Therefore, the stipulation, which restricts the performance of competitive activity by employees for a period after the termination of their employment contract, in the first place violates the constitutionally recognized right to work. Next, the employer has no right to prohibit its employees who specialize in a field from practicing their profession after the termination of their employment, as this would mean restricting their right to stay in employment. future, which is why such a clause is inherently void.
It should be noted that in Art. 111 of the Labor Code provides for the possibility of performing work outside the working hours established in the employment contract under the main employment contract, but only if this possibility is not limited by the employer within the employment contract. It is in the analysis of this provision that it is necessary to conclude that in the employment contract it is possible to provide for a ban on the performance of competitive activity by the employee, but within the term of the employment relationship.
Prohibition of competitive activity by managers of commercial companies and by partners in a limited liability company (Ltd.):
The Commercial Law explicitly regulates in Art. 41, para. 2, art. 142, para. 1, item 1 and in Art. 237, para. 4 prohibition to carry out competitive activity by a certain category of persons in order to preserve the interests of the traders, which these entities represent, manage or control by virtue of a contract or law. The scope of the ban includes: sales representatives, managers of limited liability companies, as well as members of the board of directors and the management board of companies. It should be noted that this legal prohibition is temporary only while the persons are performing the respective position, and not after the termination of the contractual relationship.
Contrary to the above hypotheses, the Commercial Law does not provide for a ban on the performance of competitive activities by partners in limited liability companies by the managing companies. In practice, however, such restrictions are negotiated in additional agreements between investors and partners, insofar as there is no overriding prohibition in this regard. The fulfillment of the obligations under such agreements may be secured by penalties for non-fulfillment of the obligation for non-performance of competitive activity by the manager and partner, both while holding this position and for a period after termination of participation in the company.
In challenging the validity of such clauses for penalties in court, the courts until recently took a rather conservative approach, assuming that the right under Art. 48, para 3 of the Constitution of the Republic of Bulgaria that every citizen can freely choose his profession and place of work, cannot be subject to actual refusal or restriction, expressed in a private law agreement, incl. as an employment contract clause, resp. an agreement on the basis of which they have declared the nullity of the penalty for non-compliance with a restriction on competition.
The new practice of the Supreme Court of Cassation from 2020 broke this understanding by accepting that the constitutionally enshrined right of a person to freely choose his profession and place of work is not violated by an agreement between the parties banning competition for a period of one year.
The Court held that the obligation not to compete for a period of one year did not restrict a person's right to work in an undertaking with similar activities, nor to be a manager of companies operating other than those of the company in which was a manager or partner. The position of the manager or partner in a company is not analogous to that of an employee holding a certain position and performing work in fulfillment of an employment contract concluded with the employer.
The new case law opens new opportunities to protect the interests of investors in companies. In this way, they can protect their investment and limit the unscrupulous actions of managers and partners. The assumption of a contractual obligation for non-performance of competitive activity by the manager or the partner is in itself an obligation for inaction for a specific period. The purpose of the commitment is to ensure the preservation of customers and developed markets, as well as the preservation of production and trade secrets of the company managed so far by the manager/partner. In these cases, the penalty agreed in the contracts has an enhanced security function, i.e. it aims to prevent the former partner and/or manager from competing to ensure that the company he has managed retains customers, as well as commercial and production secrets.
The scarce legal framework related to the restriction on the performance of competitive activity presupposes the settlement of the disputable issues through their interpretation by the court. We advise you to consult legal experts in each case, both the possibility of including such clauses in contracts and agreements, and their content, so that they can be maximized and ensure their effective implementation, regardless of voluntary or compulsory order.
15.06.2022
THE EMPLOYMENT AGENCY ANNOUNCED WHAT KIND OF STAFF THE COMPANIES ARE LOOKING FOR
The number of employers who intend to look for new staff in the next 6 months is increasing. This is indicated by the first for 2022 study of the needs of employers for labor force of the Employment Agency, which was conducted in the period February - March this year. The survey is organized jointly with the Employment Commissions of the Regional Development Councils in the 28 districts in the country. It is nationally representative and was conducted through surveys among a statistical sample of employers representing 378,752 active enterprises in the country.
The results of the survey show that 60,842 companies will be looking for new staff in the next 6 months. Compared to the poll in February-March 2021, their number increased by 2,620 or 4.5%. The business states the need for 239,339 workers and specialists with skills in various professional fields.
Over the next 12 months, employers will be looking for 128,789 specialists with a qualification acquired in the system of secondary vocational education and vocational training. The most sought after will be a waiter-bartender, cook, machine operator, tailor, builder, builder-assembler, welder, operational accountant, electrician, cashier and others.
The Bulgarian business will need another 62,905 specialists with legal capacity or higher education. Among them, the most sought after are drivers, nurses, teachers and doctors. Compared to the previous year, the number of sought-after graduates increased by 6,300 or 11.1%. The survey shows that 47,645 non-skilled workers will be needed in various sectors of the economy over the next 12 months. Compared to a year earlier, their number decreased by 8,100 or 14.5%.
70.7% of employers in the country face difficulties in securing staff. On an annual basis, their share increased by 2.3 percentage points. Employers face the most serious difficulties in finding sales consultants, cooks, tailors, machine operators, programmers. For comparison, a year ago there was the greatest shortage of machine operators, operational accountants, assistant educators, welders and electricians.
A new wave of COVID-19 will affect employers, according to a study by the Employment Agency. 19.4% of those who intended to hire staff will stop the demand altogether, or 11,800 companies. The strongest negative impact on the intention to hire new staff in a new pandemic will be felt in the sectors of trade, hotels and restaurants, where 1/3 of companies will refuse to look for staff. However, 50.5% of them, or more than half, will not be affected by the emergence of a new COVID-19 wave - that's nearly 31,000 companies.
When new restrictive measures are introduced for businesses, the low-skilled workers will be the most affected. In such a scenario, employers are expected to abandon their plans to hire just over 10,000 workers with such qualifications. Nearly 5,000 jobs for qualified specialists with secondary and higher education will also remain undeclared in the presence of a new pandemic wave.
The most preferred form of state support for maintaining employment among employers in COVID-19 restrictive measures remains "80 out of 20" - expressed in 33.7% of respondents, followed by "60 out of 40" - in 14.5% of cases. Only 3.4% of employers who intend to hire staff will give up this intention, regardless of what state aid is offered to them.
According to the study in the medium term, i.e. in the next 3 to 5 years, the required specialists with higher education will be 173,784 people or 7.6% of employees in employment at the end of March 2022. The three most popular professional fields will be Pedagogy, Economics and Electrical Engineering, electronics and automation. Over the next 3 to 5 years, Bulgarian business will need 208,964 specialists with secondary education. Compared to February 2021, demand decreased by nearly 33,500 or 13.8%. The most needed will be specialists in wholesale and retail trade, construction, production technologies - textiles, clothing, footwear and leather, mechanical engineering, metalworking and metallurgy and others.
Sofia-city remains the area where most workers and specialists are expected to be hired - 67,064, which is 28% of all stated needs in the country. In 12 districts, employers said they would need more staff than a year earlier. These are the districts of Sofia-city, Varna, Dobrich, Sofia district, Ruse and Pleven and others. The lowest demand is in Burgas, Plovdiv, Targovishte, Haskovo and Lovech and others.
The study of the needs of employers covers proportionally enterprises with different numbers - from micro-enterprises with less than 10 employees to large enterprises with over 250 people. According to the economic activity, the largest share of the surveyed enterprises is in the sector "Trade, transport, hotels and restaurants" (34.3%), followed by the enterprises in the sector "General government, education, humanitarian health" with 16.1% representativeness, and in third place is the industry sector with 14.4%.
The Labor Force Needs Survey is conducted by the Employment Agency twice a year in order to collect and analyze up-to-date information on the professions, competencies, knowledge and skills of the employees sought by employers and to plan measures for organizing their professional training.
15.06.2022
HOW MANY OF THE PEOPLE WITH DISABILITIES START WORKING IN OUR COUNTRY EVERY YEAR
Every year between 10,000 and 12,000 people with disabilities start working in our country, announced today Kremena Kalcheva, Director General of Employment Services at the Employment Agency.
She is among the participants in the National Forum with international participation "25 years of vision for a better life". The conference brings together representatives of the social sector - government institutions, municipalities, socially responsible employers, service providers, managers and service teams, representatives of non-governmental organizations.
The group of people with disabilities has the lowest percentage of presence in the registers of the Employment Agency, but it is very specific and special teams work with it, added Kalcheva. She reminded that there are many programs and measures that are financed from the state budget and encourage employers to open places for a certain period of time for employees with disabilities.
The problem is that companies want staff to fit into the work process from day one, and these people need mentors, as well as a suitable transport and work environment, Kalcheva added.
She clarified that the number of socially engaged employers in our country is gradually growing, and social enterprises are increasing. In general, state and municipal administrations in the country meet the requirements for a number of jobs for people with disabilities, Kalcheva said.
The expert also said that the number of unemployed with disabilities has been relatively stable over the years and they are between 5 and 6 percent of all registered in the labor offices in the country.
15.06.2022
REPORT: LABOR MARKET CONDITIONS IN BULGARIA HAVE DETERIORATED
According to the World Competitiveness Yearbook 2022 of the Institute for Governance Development (IMD, Switzerland), the Bulgarian economy, pulled by the EU, has been slowly recovering over the past 15 years, but has not reached its full potential, the Center for the Study of Democracy said.
In 2022, Bulgaria ranks 53rd out of 64 countries, which shows a lack of progress since 2021. The country marked a deterioration of five positions compared to 2020 and fifteen positions compared to 2009. Thus, the Bulgarian economy remains among the most uncompetitive in Europe. Of great concern is the fact that long-term competitiveness factors remain stagnant. The likelihood of positive reforms or progress in the foreseeable future remains low, and this can only be changed through appropriate corrective action in policy-making, governance and business leadership.
Main challenges and opportunities for improving the competitiveness of Bulgaria in 2022
- Geopolitical shocks and rising inflation caused by energy costs.
- Inconsistent energy and climate policies.
- Confrontation between the executive and the judiciary.
- Lack of reliable anti-corruption law enforcement.
- Limited R&D investment and innovation.
By 2022, the Bulgarian economy has almost completely recovered from the economic consequences of the pandemic, although now both businesses and households are experiencing the negative effects of rising energy prices. After the invasion of Ukraine, the energy-intensive economy was negatively affected by its energy dependence on Russia. Rising energy prices and continuing disruptions in the global supply chain have led to the highest inflation rates in a decade. Thus, the vulnerability of society, exacerbated by the ongoing crisis, poses a potential threat to the poverty index and living standards.
Although Bulgaria is ranked in the same place as last year, the Yearbook also notes slight improvements in the country in most of its economic indicators (14 out of 20). However, the yearbook significantly lowers Bulgaria's ranking in terms of the labor market (from 23rd to 46th place) and in terms of public finances (from 21st to 38th place).
Over the last year, labor market conditions in Bulgaria have deteriorated. Unemployment is stabilizing as a result of the pandemic, but the country continues to experience unfavorable demographic processes associated with high levels of inactivity among people of working age, as well as an aging and rapidly declining population. As a positive development, it should be noted that Bulgaria continues to rank in the top 10 countries in terms of remuneration of managers, specialists in the field of services and long-term growth of the workforce. Lower corporate tax rates in the country attract foreign investors and global outsourcing.
The yearbook emphasizes that Bulgaria continues to improve its competitiveness in the field of international trade, ranking 19th out of 63. Although its main export partner remains the EU, Bulgaria has achieved a significant increase in its exports to the rest of the world. In terms of international investment, however, the country has dropped to 60th place. In this regard, it is extremely important for Bulgaria to make more efforts to attract foreign direct investment by improving its regulatory framework and providing appropriate financial incentives to interested companies.
Bulgaria continues to face many opportunities to improve infrastructure, especially in the technology sector and in vital areas of science and education. In all these areas, the Yearbook slightly improves Bulgaria's ranking, but it still remains closer to the group of lagging countries.
15.06.2022
IT IS PROPOSED TO EXTEND EXPIRED TEMC DECISIONS
Deputies have submitted for consideration in the parliament legislative changes, with which the TEMC decisions expired in the period between March 13, 2020 to June 30 this year, valid until the end of 2022, but provided that people with disabilities have submitted documents for re-certification until July 15 this year.
If the change is accepted, disability pensions and benefits under the law for people with disabilities will not be suspended due to the slow work of re-certification commissions, and the commissions themselves will have enough time to issue new TEMC decisions to people with submitted documents.
With the Law on the State of Emergency, the expired documents of the TEMC after the date of elimination of the emergency epidemic situation on April 30 are valid for 3 months - until July 30.
The changes propose that by July 20 all regional health funds and the Social Assistance Agency submit to the National Social Security Institute information on all persons who have submitted applications for re-certification.
13.06.2022
THE OPENING OF THE BORDER CHECKPOINT RUSE - GIURGIU - FERRY IS PENDING
The opening of the state Bulgarian-Romanian border at the Ruse-Giurgiu-Ferry border checkpoint is pending. The opening of the checkpoint is a condition for the resumption of the ferry line Ruse - Giurgiu. This is expected to help ease road traffic on the Bulgarian-Romanian border and overcome the difficulties of cross-border transport of passengers and goods between Bulgaria and Romania. The border checkpoint is expected to serve passengers and motor vehicles transported by ships between Ruse and Giurgiu. The main burden today is borne by the "Danube Bridge" near Ruse - Giurgiu. Part of the cargo flow is directed to "Danube Bridge - 2" near Vidin - Calafat. The ferry between Silistra and Calarasi has also been operating since last year.
10.06.2022
USE AND POSTPONING OF PAID ANNUAL LEAVE
Expert comment
Paid annual leave is permitted in writing by the employer or by a person appointed by him on the basis of a written request of the employee to the employer (Article 22, paragraph 2 of the Ordinance on working hours, breaks and leave - OWHBL).
The order of the employer should contain the grounds on which the leave is used (art. 155 or art. 156 LC), its duration, as well as the time of use. It is recommended that the fulfillment of the obligation be certified by placing on the order a text indicating the receipt/acquaintance with the order, date and signature of the employee.
With amendments to the Labor Code, in force since July 17, 2015, the obligation of the employer to approve a schedule for the use by employees of paid annual leave for the next calendar year by December 31 of the previous calendar year was abolished. The obligation of employees to use their paid annual leave in accordance with the schedule was also abolished.
Paid annual leave is allowed to the employee at once or in parts (Article 172 of the Labor Code).
According to Art. 173, para. 5 of the Labor Code, the employee shall use his paid annual leave until the end of the calendar year to which it refers.
The employer is obliged to allow the paid annual leave of the employee until the end of the respective calendar year, unless its use is postponed by the order of art. 176 LC. In this case, the employee is provided with the use of not less than half of the paid annual leave for the calendar year.
The Labor Code (Article 174) regulates the right of workers under the age of 18 and mothers with children under the age of 7 to take their summer leave and, at their request, at other times of the year, except in the cases under Art. 173, para. 4.
In order to create a guarantee that the employee will exercise his right to paid annual leave, in Art. 37a of the OWHBL is a regulated obligation for the employer, by virtue of which he is obliged at the beginning of each calendar year, but no later than January 31, to notify in writing each employee of the amount of paid annual leave, who is entitled to use during the calendar year, including deferred or unused from previous calendar years.
It is important to keep in mind that the deadline for fulfilling this obligation is fixed - from the beginning to the end of January. The notification should be documented.
Upon inspection by the control bodies for compliance with labor legislation, the employer must prove that he has complied with the deadline and has notified his employees in writing. No model of the notification has been established in the legislation. The employer may draw up the written document as an order, notification, memorandum or other type of written document addressed individually to each employee or with a document containing a list of employees and the annual leave due to them. Therefore, the employer has the right to decide for himself exactly what the notification should look like. It should be clear from the document that the information on paid annual leave has been brought to the attention of employees.
The notification should contain information on paid annual leave, which the employee is entitled to use, and it is not necessary to include leave, the right to use which has expired. However, it should contain information on older unused paid annual leave due for the years up to 1 January 2010, as this leave is not time-barred and can be used until the termination of employment.
According to Art. 43a of the OWHBL, the employers shall keep documentation for the paid annual leave of the employees, which shall contain information for use, interruption and postponement of the use, as well as for the paid remunerations under art. 177 of the Labor Code and for the compensations paid under Art. 224 LC.
Accumulated by the employee leave before January 1, 2010 - the so-called "old leave" has no statute of limitations.
With its Decision № 12 of 11.11.2010 the Constitutional Court of the Republic of Bulgaria declared the provisions of § 3f of the Transitional Provisions of the Labor Code and § 8a of the Transitional and Final Provisions of the Civil Servant Act unconstitutional, therefore the requirement of unused leave was dropped until 01.01.2010 to be used until the end of 2011.
These leave can be used until the termination of the employment relationship with the respective employer.
Where, for whatever reason, the employee has not used the leave due to him before 1 January 2010, the employer shall be obliged to pay him compensation for the termination of his employment.
When the paid annual leave or part of it is not used until the expiration of two years from the end of the year for which it is due, regardless of the reasons, the right to use it is extinguished by prescription (Art. 176a, para. 1 of LC).
With regard to the leaves after 01.01.2010 the provision of art. 176a of the LC. Following the change in the Labor Code in 2011, a two-year limitation period for the use of deferred paid annual leave was introduced. The limitation period is regulated in Art. 176a, para. 1 and para. 2 LC. When the paid annual leave is postponed under the conditions and by the order of art. 176, para. 1, the right of the employee to use it shall be extinguished by prescription after the expiration of two years from the end of the year in which the reason for its non-use has disappeared (during which the employee has returned to work).
Upon termination of employment, the right of the employee to compensation under Art. 224 of the Labor Code for the unused paid annual leave (including for the period up to 31.12.2009), the right to which has not expired.
With regard to limitation periods, it should be borne in mind that there is no explicit legal provision governing the order in which leave for previous years should be used. Given the provision of Art. 176a, para. 1 LC, the older leave should be used. The assessment of this is made by the employee.
The Labor Code provides for several hypotheses in which it is possible for an employer to place an employee on paid leave without his or her consent. In Art. 173, para. 4 LC and Art. 37b OWHBL regulates the cases in which the employer has the right to provide paid annual leave to the employee without his consent. These are the hypotheses in which:
The stay is a temporary suspension of the enterprise due to organizational, technical or economic reasons, regardless of their specific manifestation (accident, shortage of raw materials, etc.). It may affect both the entire activity of the enterprise and the activity of a separate unit or division. In order for the employer to grant paid leave to an employee under this hypothesis, the stay must last more than 5 working days.
It is important to note that the compulsory "holiday" use of paid annual leave (simultaneously by all employees) can be applied only if this possibility is enshrined in law or provided by the employer in the Rules of Procedure.
The employer follows with a special document: an order or a letter with an outgoing number to invite the employee to request to use his leave until the end of the calendar year for which it is due. The order or letter should be received from the employee, which is certified by a signature and date placed by the employee. In the document, the employer must give a specific period in which the employee can express his preference for the period in which he will use his paid annual leave. It should be clear from the content of the document that the employee is invited to use the paid annual leave due for him for the current year. If, after receiving the invitation and the expiration of the term given to him, the employee has not declared a period until the end of the year in which he will use the leave, the employer has the right to grant him paid annual leave.
The employer shall provide the use of the leave in writing and shall promptly notify the employee. According to the practice of the Labor Inspection Directorates, only in the absence of action by the employee (he has not used his paid annual leave until the end of the year for which it is due), at the beginning of the next calendar year the employer will be forced to paid annual leave to his employee by granting him the due but unused leave for the previous year.
If the use of the paid annual leave has been postponed by the order of art. 176, para. 1, item 2 of the Labor Code in conjunction with Art. 37d, para. 2 of the OWHBL at the written request of the employee with the consent of the employer, there would be no possibility for the employer to exercise its right to unilateral provision of the use according to art. 173, para. 4 LC, after the leave is postponed.
In Art. 37d, para. 2 OWHBL is a regulated obligation for the employer:
According to Art. 173a of the Labor Code, when due to a declared state of emergency or declared extraordinary epidemic situation by order of the employer or by order of a state body the work of the enterprise, part of the enterprise or individual employees is suspended, the employer has the right to grant paid annual leave or the employee and without his consent, including an employee who has not acquired the required by law the minimum length of service - currently 4 months. The time during which leave is used is recognized as length of service.
In the provision of art. 173a, para. 1 of the Labor Code does not limit the amount of leave that the employer may provide to the employee without his consent. A necessary precondition for the application of this procedure for granting leave is the existence of an order of an employer or a state body under Art. 120c, para. 1 and 2 of the Labor Code for termination of work in case of declared state of emergency or emergency epidemic situation.
The provision of Art. 173a, para. 2 of the Labor Code stipulates the obligation of the employer to allow the use of paid annual leave or unpaid leave in case of a state of emergency or in cases of declared epidemic emergency at the request of a certain category of workers in a more vulnerable position, namely:
The assessment of the type of leave - paid annual leave or unpaid leave, belongs to the employee. Paid annual leave includes both paid annual leave for the current calendar year and leave for previous calendar years that has not expired. Unlike the general procedure for using unpaid leave, in the hypothesis of Art. 173a, para. 2, the employer shall not have the right to refuse the unpaid leave of its employee, falling into the listed category of persons.
By the order of art. 175, para. 1 of the Labor Code, when during the use of the paid annual leave the employee is allowed another type of paid or unpaid leave, the use of the paid annual leave is terminated at his request and the rest is used additionally by agreement between him and the employer.
It is important to know that the law also provides for the possibility of the employee's leave to be interrupted by mutual consent of the parties, expressed in writing.
The use of the paid annual leave may be postponed for the next calendar year either by the employer or by the employee, when the requirements provided for in Art. 176 LC.
Postponement of the use of paid annual leave by the employer
According to Art. 176, para. 1, item 1 of the Labor Code, the use of the paid annual leave may be postponed for the next calendar year by the employer due to important production reasons under the condition of Art. 173, para. 5, sentence three of the LC.
For the employer there is a certain limitation in the possibility to postpone the paid annual leave for the next year. The restriction is in the provision of art. 173, para. 5 of the Labor Code, which obliges him to enable the employee to use not less than half of the paid annual leave for the calendar year. Therefore, in this case, the employer has the right to postpone the use of not more than half of the paid annual leave for the following calendar year, without the need for the consent of the employee.
It is important to pay attention to the fact that the provision of the law regulates "half of the due leave", which means that the employer will be able to postpone not only 10 working days, but half of the paid annual leave for the calendar year - for example in cases where the employee uses extended paid annual leave, or if, for example, the parties have agreed in their employment contract the amount of paid annual leave of 24 instead of 20 days, then the employer would have the right to postpone 12 of them under Art. 176, para. 1, item 1 LC.
The employer may postpone the use of the paid annual leave of an individual employee, as well as of the employees of the respective organizational (structural) unit (Art. 37d, para. 1 OWHBL).
The employer postpones the use of the leave in writing and promptly notifies the employee (Art. 37d, para 2 OWHBL).
Postponement of the use of paid annual leave by the employee
According to Art. 176, para. 1, item 2 of the Labor Code, the use of the paid annual leave may be postponed for the next calendar year by the employee - when he uses another type of leave or at his request with the consent of the employer.
The employee must submit a written request to the employer to postpone the use of paid annual leave for the next calendar year, except when the employee uses other types of statutory leave (e.g. leave for temporary incapacity for work, pregnancy, childbirth, adoption, parenting of a small child, etc.).
When using another type of statutory leave, a written request is not required, as the postponement is by law. The reason in this case for the postponement of the paid annual leave is the use of another type of leave, as the law does not determine its minimum amount. The postponement of all or part of the amount of paid annual leave in this case is necessary because the use of other statutory leave has led to the inability to use paid annual leave.
It is important to know that the Labor Code does not provide for a legal limit on the maximum amount of deferred leave, i.e. all or part of the paid annual leave may be postponed.
It should be borne in mind that both the LC and the NRVPO do not explicitly specify a deadline for submitting a written request for deferment of use. Since in Art. 173, para. 5, assoc. 1 of the Labor Code stipulates that the employee uses his paid annual leave until the end of the calendar year to which it relates, it could be concluded that the written request can be submitted no later than the end of the calendar year.
When the use of the leave is postponed by the employer due to important production reasons and when at the request of the employee the use of the paid annual leave is postponed with the consent of the employer by the order of art. 176, para. 1, item 2 of the Labor Code, the employer postpones the use of the leave in writing and promptly notifies the employee (Art. 37d, para 2 OWHBL). It would be most correct to fulfill the obligation to certify by placing on the order a text indicating the receipt/acquaintance with the order, date and signature of the employee, but any other written document would be admissible.
According to Art. 176, para. 2 of the Labor Code, when the leave is postponed or not used until the end of the calendar year to which it refers, the employer is obliged to ensure its use in the next calendar year, but not later than 6 months from the end of the calendar year, for which it is due.
In fact, Art. 176, para. 2 of the Labor Code regulates two possibilities: "the leave should be postponed for the next calendar year" or "the leave should not be used until the end of the calendar year to which it refers".
The difference between the two hypotheses is that in the first case there is an agreement between the employee and the employer, expressed in writing, to defer the full or part of the paid annual leave for the year, while in the second case - the employee) has not requested and the employer has not postponed part of the paid annual leave and at the same time the employee has not used the paid annual leave until the end of the calendar year to which it refers.
However, if the employer does not allow the use of the leave by the end of the 6th month of the following calendar year, the employee has the right to determine the time of its use by notifying the employer in writing at least 14 days in advance. According to Art. 37e OWHBL in this case the employee has the right to determine the time for using the paid annual leave until the expiration of the limitation period under Art. 176a, para. 1 LC. After the expiration of the limitation period, the right to use the paid annual leave shall be extinguished by prescription. The right to payment of the expired leave upon termination of the employment contract is also extinguished.
It is important to know that the employee can in this order be forced to use only his paid annual leave from previous years, but not the one due to him for the current year.
When the use of the paid annual leave is postponed under the conditions and by the order of art. 176, para. 1 of the Labor Code, the right of the employee to use it shall be extinguished by prescription after the expiration of two years from the end of the year in which the reason for its non-use has disappeared (Art. 176a, para 2 of the Labor Code).
