Wednesday, 13 May 2026
The General Assembly of the Civil Division of the Supreme Court of Cassation of Bulgaria has issued two interpretative rulings clarifying key aspects of employment compensation law, resolving inconsistencies in previous case law relating to unlawful dismissal claims and compensation for occupational accidents and diseases.
The rulings, adopted earlier this year, are binding on Bulgarian courts and public authorities.
In Interpretative Ruling No. 3/2024, issued on 23 February 2026, the court clarified when the limitation period begins for compensation claims linked to unlawful dismissal under the Labour Code.
The court ruled that the three-year limitation period starts from the date the employment relationship is terminated, rather than from the date a court judgment declaring the dismissal unlawful becomes final.
According to the ruling, a claim seeking recognition of unlawful dismissal has retroactive effect, meaning the dismissal is considered unlawful from the moment it took effect. The court also stated that compensation claims linked to unlawful dismissal constitute a single claim covering up to six months rather than a series of periodic payments.
The decision may strengthen employers’ ability to rely on limitation defences in cases where former employees delay filing compensation claims.
In a separate decision, Interpretative Ruling No. 1/2023, issued on 5 March 2026, the court addressed whether social insurance benefits or pensions should be deducted from compensation awarded for non-pecuniary damages in cases involving occupational accidents or occupational diseases.
The court held that social insurance payments should not be deducted from compensation for non-pecuniary damages, such as pain and suffering.
The ruling distinguished between pecuniary and non-pecuniary harm, stating that social insurance benefits compensate for loss of earning capacity rather than emotional or physical suffering. The court concluded that deductions are only applicable where compensation overlaps with the same category of damage.
The decision could increase employers’ financial exposure in occupational accident and occupational disease cases, particularly where claims include compensation for non-pecuniary damages.
The rulings are expected to have practical implications for employment litigation, employer risk management and insurance arrangements in Bulgaria.
