Originally published February 2010
New Cost-Sharing Measures In Employment Litigation
Employment litigation has become less expensive for individuals employed in low-wage positions as a result of the latest cost-sharing measures imposed by the Hungarian government.
Employment litigation was, for many years, free of public charges (i.e. costs payable by unsuccessful parties and other court expenses associated with the litigation) for employees regardless of the reasons behind, or outcome of, the dispute. In February 2008, new measures were introduced pursuant to which the court must, in its judgment, require employees to pay for such public costs if they lose the litigation.
In order to protect low-paid employees who might be deterred from starting litigation because of its costs, the government introduced new measures as of 1 January 2010, which can be applied in all litigation processes started after February 2008. Private costs (lawyers' fees) can still be charged to the losing party, but Hungarian courts are very employee-friendly.
According to the new measures, employees may request exemption from payment of the public costs of litigation if their gross salary entitlement is less than double the average national gross salary entitlement in the second preceding year from the date of:
- filing the first court claim;
- the termination of employment; or
- the unlawful dismissal.
The statutory limit is currently approximately HUF 360,000 (EUR 1,300) per month (on the basis of the statistical data available from January 2008 regarding the national average salary).
REPORTED CASE LAW
Prohibition On Termination Upon Sick Leave
The Hungarian High Court ruled, in a recently published landmark case, that employees who take their normal holiday to receive medical treatment enjoy the same level of protection with regard to termination of employment as those who are on registered sick leave. In the relevant case, the employee, who had health problems, went on sick leave and, for the period of social security entitlement, was deleted from the employer's payroll. The treatment, however, lasted longer than the social security entitlement period, so the employee applied to be re-listed on the employer's payroll but immediately took paid holiday to be able to continue the medical treatment. With reference to the above circumstances, the employment court ruled that the termination was unlawful as the employer must have been informed of the employee's health status and should have observed the statutory prohibition on termination.
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.
