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Legislative amendments following the end of the state of emergency

Legislative amendments following the end of the state

A new Act Amending and Supplementing the Health Act was published in the State Gazette, issue No 44 dated 13 May 2020 (the “Act”). The Act prescribes the measures aimed at limiting the spread of the epidemic and overcoming its effects, which will apply in the territory of the country following the end of the state of emergency, i.e. after 13 May 2020. The Act provides for various new measures as well as for changes in the ones already implemented.

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In addition to the amendments to the Health Act, the new Act introduces amendments to many other effective legislative acts such as the Act on the Measures and Actions during the State of Emergency Declared by virtue of Resolution of the National Assembly dated 13 March 2020, the Administrative Procedural Code, the Labor Code, the Excise Duties and Tax Warehouses Act, etc.

The provisions of the Act become effective as of 14 May 2020 with some exceptions.

On 14 May 2020 the President challenged some of the amendments introduced by the new Act before the Constitutional Court. The challenged provisions will remain in effect until they are declared unconstitutional.

Below is an overview of some of the more significant changes introduced by the Act.

Anti-epidemic measures in the period following the end of the state of emergency and sanctions for their violation

The Act provides for the power of the Council of Ministers to declare an epidemic emergency situation in the territory of the country, in case of immediate danger to the life and health of the public due to the spread of a contagious disease. The Act also provides for the conditions which should be met in order for such emergency to be declared.

In relation to the above, by virtue of Resolution No 325 dated 14 May 2020 the Council of Ministers declared an epidemic emergency situation in the territory of the country for the period from 14 May 2020 until 14 June 2020.

The Act governs the implementation of temporary anti-epidemic measures which include (i) the suspension or limitation of various activities and services provided to the public, (ii) the restriction on movements within the country and (iii) a ban on entry of foreign nationals in the country, with the exception of individuals who have been issued a permanent, long-term or continuous residence certificates and their family members.

The measures may be implemented by virtue of an order of the Minister of Health or of another competent authority.

Additionally, the new amendments prescribe the conditions for mandatory isolation and treatment of infected persons as well as for placing of persons, who have come in contact with the infected or who have entered in the country, in quarantine.

On 14 May 2020 the Minister of Health issued four orders prescribing specific anti-epidemic measures as well as the procedure for treatment of individuals and placing them in isolation or quarantine. The orders also provide for some exceptional cases where the ban on entry in the country and the mandatory quarantine will not apply.

The sanctions for violation of the anti-epidemic measures effective as to date will continue to apply. Said sanctions include a fine from BGN 300 to BGN 1,000 for individuals and a pecuniary sanction for sole proprietors and legal entities in the amount from BGN 500 to BGN 2,000. Failure to comply with an imposed mandatory isolation, treatment or quarantine will result in a fine of BGN 5,000.

Resumption of suspended statutory terms

The Act provides for the resumption of procedural terms in court and arbitration cases and enforcement proceedings, prescription terms and all other terms suspended as per the Act on the Measures and Actions during the State of Emergency Declared by virtue of Resolution of the National Assembly dated 13 March 2020 and Overcoming the Effects. These terms will continue to run in seven days following the publishing of the Act in the State Gazette.

Developments in the relations between employers and employees

As per the Act during the epidemic emergency situation employers will reserve the rights granted to them for the period of the state of emergency.

For the period until 14 June 2020 employers will be entitled to: (i) assign the performance of remote work (home office) and teleworking, (ii) suspend the work of their entire enterprise or parts thereof, or only of certain employees, (iii) reduce the working hours of the employees working full-time, (iv) provide the employees with their annual paid leave. Employers may exercise these rights without the employees’ consent.

The period of up-to 60 working days during which employees were on unpaid leave on the grounds of Art. 160, Para. 1 of the Labor Code in 2020 will be recognized as length of service including for social security purposes.

As per the new amendments compensations under the 60/40 mechanism will be paid for the period from 13 March until 30 June 2020, but for no more than three months.

New rules for tour operators

The deadline for tour operators to reimburse all amounts paid in connection to travels cancelled due to the state of emergency is extended to 12 month as from its end.

The Act provides for the right of tour operators to receive state funding for using the services of an air carrier for chartered flights to the Republic of Bulgaria for the purpose of tourism. The conditions for receipt of this funding will be prescribed in an act of the Minister of Tourism.

Other important developments

The Act suspends the issuance of bank account, pension and employment remuneration preservation orders with regard to natural persons as well as inventories of movable or immovable property owned by such persons for the period until 14 July 2020. Some exceptions are prescribed.

The protection granted in cases of default in payment of obligations under loan agreements and other forms of financing is limited. Under this protection debtors may not be required to pay default interest or penalty, while the counterparty may not declare the obligation due with immediate effect or rescind from the agreement. As per the new amendments this protection will be valid for a period of two months as of the end of the state of emergency and will apply only to cases of non-performance of obligations under agreements signed with financial institutions and not with banks.

How can we help?

The team of KPMG remains at your disposal for any inquiries or need of assistance you may have related to the interpretation and application of the new amendments.

© 2020 KPMG Bulgaria EOOD, a Bulgarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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