Dismissal of Hungarian Employees

In 2012 Hungary modified its Labor Code in order to make employment more flexible, cheaper and in accordance to the labor market and with the EU Directives.

The new Hungarian Labor Code (Act I of 2012) replaced the old Labor Code of 1992 and it is made to increase the employment rate in Hungary and the economic performance.

Our Hungarian law firm offers legal services in areas as corporate taxation, civil law or commercial law.

Dismissal after the current Labor Code

Under the current Hungarian Labor Code the employer is empowered to end an indefinite employment contract through an ordinary termination notice. The Hungarian ordinary termination notice will be enabled only if some requirements are met.

In case of dismissal the employer must motivate the ordinary termination notice and the reasons for dismissal must be clear. The reason or reasons must be true and precise. The dismissal in Hungary according to the current Labor Code can happen only if:

1.          the employee no longer has the ability to perform his or her duty;
2.          the employee has conducted an inappropriate behavior regarding the employment relationship;
3.          the employer is reorganizing or restructuring the company.

The Hungarian Labor Code states that in the following cases the employer is not allowed to dismiss an employee:

1.          in case of paternity leave or parental leave;
2.         during sick leave the employer may give notice, but the notice period starts only after it ends, even if the illness is due to a work accident or occupational disease;
3.          during pregnancy;
4.          in case of non-paid leave for taking care of a relative;
5.      in case of human reproduction treatment (for up to six months) or during maternity leave;
6.          in case of unpaid leave taken by a parent to care for a child;
7.          in case of providing army duties;
8.          in case of a disabled person through the entire period he or she receives rehabilitation support.

The notice period according to the Labor Code in Hungary is 30 days and the employee is entitled to a severance package if the labor period exceeded 3 years and if the labor contract is terminated by the employer’s ordinary termination notice. 

Temporary contracts in Hungary cannot be terminated by way of ordinary termination notice. If you have relocated to Hungary as an employee and have been living there for a significant amount of time, you may be eligible for citizenship in Hungary. So, if you are planning to apply for citizenship, the services of our lawyers are at your disposal. They can provide you with comprehensive information in this regard. You can also ask questions about the criteria for citizenship.

The new Labor Code in Hungary

After the new Hungarian Labor Code has been enabled the ordinary termination notice has simply become “the termination”.  An important change that has been brought to the new Labor Code is the fact that the employer can terminate a labor contract during the employee’s sick leave, but the notice period will only start after the employee has returned to his or her duties. According to the new Labor Code the employer can dismiss an employee with a temporary contract during the liquidation or bankruptcy process or if by an external cause the employer must renounce to the employee’s services. Under the new Labor Code the employer has the right to dismiss an employee during the trial period.

If you want to open a company and need to know what the Labor Code states you can contact our lawyers in Hungary.