Hungary: The 5 Must-Knows About Ordinary Dismissal In Hungary

Last Updated: 8 April 2019
Article by Anita Vereb

If you would like to fire an employee, but the conduct of the employee does not exceed a certain the limit that justifies extraordinary termination, the only way under Hungarian Labour law to dismiss him is the ordinary termination. Given that a wrongful termination can have serious financial effects, it is worth to summarise the 5 must-knows for an employer in relation with ordinary dismissals, including the case law of Hungarian Labour courts.

Basic considerations

Under Hungarian Labour law a duly disclosed notice of termination terminates the labour relationship automatically. It means that the employer cannot revoke the notice of termination anymore, and if it is wrongful, the rules of wrongful termination shall apply with serious financial implications.

This is the reason why every employer shall carefully think over at least the following 5 (five) questions before disclosing an ordinary dismissal:

  • Is there any protective measure defending the employee against dismissal?
  • What is the exact reason of the dismissal?
  • Is the justification of the dismissal defendable before court?
  • How much I have to pay in case of dismissal?
  • Can I terminate the labour contract without dismissal?

Protection against dismissal

In the following cases the employer is not allowed to dismiss an employee by ordinary termination: i) in case of pregnant women, during pregnancy; ii) in case of fertilization treatments during these treatments; iii) during maternity leave; iv) in case of non-paid leave for taking care of child; v) in case of employees performing volunteer reserve military service;

It is important that the above mentioned protective measures apply only if the employee informed about these respective circumstances the employer beforehand. In case of i-ii) the Labour Code exceptionally allows the employer to revoke its wrongful dismissal within 15 days as of disclosure.

Further protection applies to employees, who are within 5 years close to the age of retirement, to mothers, or fathers raising their child on their own until the child reaches the age of 3, and to disables persons. These persons can be dismissed by ordinary termination only in serious cases.

Finally, employees having a fixed-term contract cannot be dismissed by ordinary notice, except the employer is under liquidation or bankruptcy proceeding; or if the dismissal is justified based on the skills of employee; or in case the maintenance of labour relationship becomes impossible due to external, unavertable cause.

Grounds for dismissal

The Labour Code protects employees by providing the obligation of justification of the termination of the employment contract by the employer. The justification of the dismissal shall be clear, true and causal. The reason for termination can only be connected to the following circumstances

  1. the skills or the employment-related conduct of the employee; or
  2. a reason connected to the operation of the employer.

In case of legal dispute, the employer bears the burden of proof relating to the true and causal nature of its lawful termination.

Justification and related case-law

In the past, Hungarian Labour Courts were characterised as favouring employees, and even if it is changing with the new Labour Code, an employer usually faces a hard task when it comes to the proving of the validity of the justification before the labour court judge.

When it comes to the skills and employment-related conduct of the employee, a minor mistake in itself (e.g. 5-10 minutes sporadic delays in starting work, administrative faults) cannot be valid basis of a dismissal.

On these grounds the labour court found wrongful the dismissal of employee for a mistaken bank transfer, even if the damage caused was significant, but in a case when the employee committed persistently and recurrently the same fault, despite frequent notification of the employer, the judge found that the termination, justified with the ineptitude of the employee, was valid.

When it comes to non-compliance with expectations, or internal rules and procedures, the labour court examines especially the clarity of justification and if the employee knew or should have known these norms.

Based on this the Hungarian labour court established that the dismissal justified with "failing to meet expectations" was too vague, and consequently unlawful, while in a case when it was proved that the ethical code formed as integral part of the labour contract, the labour court held that the proven breach of the ethical duties by employee was valid ground of dismissal.

In case that the employer justifies the dismissal by a reason connected to the operation of employer (e.g. reorganisation, redundancy, termination of the position) it is well-settled case-law that the judge cannot examine the economic reasonableness behind this operations, but he can examine whether the employer actually executed the reorganisation.

For this reason the labour court found unlawful the termination justified with cutback, when the employer hired a new workforce for the similar position shortly after the dismissal. At the same time, the termination, where the employer distributed the tasks of the former employee among 2 employees, without hiring new colleague for the same position was held lawful.

In these cases, where the position of the employee is in the focus of the legal disputes, it is case law that only the mere job description, but the actual work duties of the employee shall be examined by the court.

Amounts payable employer

In case of ordinary termination there is a notice period, during which the labour contract still in effect. Employees dismissed by ordinary notice shall be exempted from work for at least the half of the notice period, so that they can find new job.

In case of ordinary dismissal, the employer shall pay severance pay if the employee spent at least 3 years in employment. In addition to the abovementioned, the employer shall pay compensation for the non-used holidays. The length of notice period and amount of severance pay is based on seniority shown in the table below:

Length of employment (years) Notice period Severance pay
0-3 30 days -
3-5 35 days 1 month
5-8 45 days 2 months
8-10 50 days 2 months
10-15 55 days 3 months
15-18 60 days 4 months
18-20 70 days 4 months
20-25 90 days 5 months
25- 90 days 6 months

Alternative to dismissal?

The employer can fire the employee not only with ordinary dismissal but also by signing a mutual agreement. This is the most peaceful way of ending the employment relationship as the employee is a party of the agreement and not only the addressee of the employer's termination letter.

It also gives the parties the possibility to differ from the strict regulations of termination (eg. justification, notice period) and leaves a room for negotiation. By this way, employers paying a couple of monthly salaries in consideration for the cooperation of employee, can avoid costly and time consuming litigation in front of the labour courts.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions