Author: Attorney Daniel Zdravkov

Have you been offered termination by mutual agreement in Bulgaria and told it is “just a formality”? Before signing, check the legal ground, termination date, amounts payable and consequences for unemployment benefits. Giving your consent can produce a different outcome from dismissal by the employer.

The short answer: you do not have to accept. An ordinary mutual agreement does not automatically entitle you to four months’ pay. That statutory minimum belongs to a different procedure under Article 331 of the Bulgarian Labour Code. What the documents say matters more than the employer’s informal description of the offer.

What does termination by mutual agreement mean in Bulgaria?

Under Article 325(1)(1) of the Labour Code, the employee and employer agree in writing to end the employment contract. Neither party owes a notice period on this ground. Either party may make the proposal.

The recipient must respond and notify the other party within seven days of receiving it. Otherwise, the proposal is treated as not accepted. Silence is not consent. Keep evidence of when the proposal was received and how the response was delivered. See the General Labour Inspectorate’s explanation of the rule (in Bulgarian).

Your employment duties continue until the contract is properly terminated. Receiving or making a proposal does not, by itself, allow you to stop attending work.

Article 325 and Article 331: what is the difference?

Ordinary mutual agreement under Article 325(1)(1)

This ground does not create a general statutory severance payment simply because you agree to leave. An additional amount can be negotiated, but its value, payment deadline and conditions need to be checked. Earned salary and compensation for unused annual leave are separate issues.

An employer’s offer of termination against compensation under Article 331

Here the initiative comes from the employer. The employee must accept in writing within seven days; without written acceptance, the offer is treated as not accepted. If accepted, compensation must be at least four times the last received gross monthly remuneration, unless a higher amount has been agreed.

If the compensation under Article 331(2) is not paid within one month of termination, the legal ground for termination is deemed to have fallen away. This is a specific consequence under Article 331(3). It should not automatically be applied to an ordinary agreement under Article 325. Seek prompt advice on the next steps if payment is missed. See also the Ministry of Labour and Social Policy’s explanations (in Bulgarian).

Before signing: seven points to check

1. What are you signing? Is it a proposal, acceptance, notice, termination agreement or acknowledgement of receipt? Signing “I agree” has a different meaning from confirming that a document was received.
2. Which legal ground is stated? Compare the proposal, agreement and termination document. Mutual agreement, resignation with notice and termination against compensation are not interchangeable descriptions.
3. When does employment end? Clarify the final working day and handover arrangements. Do not sign blank or backdated documents.
4. What will you receive? Separate final salary, any additional remuneration due, unused leave compensation and the agreed termination payment. Specify whether amounts are gross or net.
5. When and how will payment be made? Check the deadline, bank account and any conditions. An oral promise of “a few salaries” is no substitute for a clear written agreement.
6. Are you confirming that everything has been paid? Do not acknowledge receipt of money you have not received. A “no further claims” clause needs separate review; its effect depends on its wording and the rights concerned.
7. Are there other obligations? Review confidentiality, equipment return, training costs, contractual penalties and restrictions on future work. Do not assume every clause is necessarily enforceable.

Which payments remain due?

Mutual agreement does not erase existing salary claims. Check salary earned up to termination, additional pay due and bonuses under the applicable rules. Article 224 of the Labour Code also provides compensation for unused paid annual leave where the right has not expired by limitation.

Do not confuse these entitlements with an additional payment offered in exchange for leaving. Ask for a breakdown of accruals and deductions. If wages remain unpaid, retain the contract, payslips, bank statements and correspondence. Other compensation may be due if separate statutory conditions are met; the individual circumstances need to be assessed.

How does it affect unemployment benefits?

If you qualify for Bulgarian unemployment benefits, termination under Article 325(1)(1) or Article 331 results in the minimum daily amount for four months. To receive benefits from termination, registration as unemployed within seven working days and an application within three months matter; unjustified delay has adverse consequences. Check your eligibility and current rules with the National Social Security Institute (in Bulgarian).

What if you refuse or feel pressured to sign?

You can refuse and request a copy for review. Refusal does not itself end employment. The employer may pursue another form of termination only where the relevant legal ground and procedure apply. Refusal does not, however, prevent every possible later dismissal.

If you signed under pressure or without understanding the document, preserve the correspondence and seek advice promptly. An unwelcome proposal does not necessarily establish legally defective consent. Article 358 of the Labour Code sets a short two-month time limit for disputes concerning termination; the appropriate claim and deadline depend on the case. For the wider employment-law context, see our employment law and dismissal advice in Bulgaria.

Frequently asked questions

Do I have to sign immediately?

You are not obliged to accept on the spot. Request the complete document and check the date of receipt and applicable response deadline.

Am I automatically entitled to four months’ pay?

Not under ordinary mutual agreement pursuant to Article 325. The statutory minimum of four gross monthly remunerations applies to Article 331. Any separate entitlement must be assessed on its own legal ground.

Can I simply withdraw my signature the next day?

Do not assume an automatic cooling-off period once agreement has been reached. The available options depend on the documents, receipt of the parties’ statements and the facts.

Is unused leave included in the offered amount?

This should be expressly clarified. Request a separate calculation for unused leave and a separate provision for any additional termination compensation.

What should you prepare for a consultation?

• Your employment contract and amendments.
• The proposal and every document you have been asked to sign.
• Payslips, unused leave information and the payment offer.
• Correspondence with the employer and dates when documents were received.

Zdravkov Law Firm assists with reviewing termination proposals, assessing payments due and representation in employment disputes. For a review before signing, contact our employment lawyers in Sofia, Bulgaria on +359 886 722 772 or office@zdravkov-legal.com.

This article provides general information on Bulgarian law and does not replace an assessment of your documents. Legal basis: Bulgarian Labour Code, Articles 224, 325, 331 and 358, and the NSSI and Ministry explanations linked above. Sources checked: 2 November 2026.