Hungary: Termination of employment

Original author: PRK Partners Prague
Updating author: Kinga Zempléni

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Summary

• Employment contracts may be terminated with or without notice by either party, generally only on specified grounds (except in the case of resignation with notice by an employee on an open-ended contract), or by mutual agreement. (See General)
• When terminating an employment contract with notice, employers and employees must observe a statutory notice period. (See Notice periods)
• Dismissal with notice by an employer is, in most cases, permitted only for specified reasons, which vary depending on whether the employee has an open-ended or a fixed-term employment contract. (See Termination with notice)
• The employer or the employee may terminate the employment relationship without notice and with immediate effect if the other party materially breaches the contract, while termination without notice is also permitted during a probationary period. (See Termination without notice)
• Where an employer terminates an employment relationship, it must generally specify clearly the reasons for the termination, except during a probationary period. (See Statement of reasons for termination)
• An employer may dismiss with notice an employee with an open-ended employment contract on grounds of redundancy, and special procedures apply in the case of collective redundancies. (See Redundancy)
• The employment relationship does not terminate automatically when an employee reaches the legal retirement age or starts claiming a pension, but special rules apply if an employer dismisses an employee in such circumstances. (See Retirement)
• Employees receive special protection from dismissal with notice in certain situations and at certain times, for example when pregnant or on maternity or parental leave, or when acting as a trade union representative. (See Special dismissal protection)
• Employees with at least three years' service are in many circumstances entitled to a statutory severance payment if their employment relationship is terminated with notice by their employer. (See Severance payments)
• Where an employment relationship terminates after at least one year, the employer must, at the employee's request, provide a written assessment of the employee's work. (See Certificate of employment)
• An employee who believes that their employment has been terminated unlawfully may bring a claim in a labour court seeking compensation or, in certain limited circumstances, reinstatement. (See Unfair/unlawful dismissal)