WHAT TO KNOW ABOUT PROBATIONARY PERIOD IN HUNGARY

19 January 2024

As many of you may know, it is possible to set a probationary period at the beginning of the employment relationship, in order to allow the employer to get to know the employee and his/her professional qualities and personality better. In this article we will go through the rules on probationary periods in order to make this very useful legal instrument for employers more transparent.

1. The purpose of the probationary period

The purpose of the probationary period is on the one hand to enable the employee to know the circumstances of the employment relationship and the conditions of work and, on the other hand, to enable the employer to assess the employee's abilities.

It is important to note that the so-called “trial work”, while the employee is working without an employment contract and remuneration, does not comply with the law.

2. The stipulation of the probationary period

The employer and the employee can agree on the probationary period in the employment contract, which can last up to three months from the start of the employment relationship.

If a shorter period is agreed (e.g. 1 month), it may be extended once. In this case, it should be noted that the probationary period, including the extension, may not exceed 3 months.

If the Employer is under the effect of collective agreement, a probationary period of 6 months is possible. However, it is important that the employer is only entitled to conclude a collective agreement with a trade union and a trade union association and the existence of these latter institutions imposes additional strict obligations on the employer under the LC

3. The exceptionality of the probationary period

The probationary period is a pending legal situation, where the termination of the employment contract depends on the success or the failure of the probationary period.

In case the conditions of work, the performance or conduct of one of the parties is not proper for the other party, the other party has the possibility to terminate the employment relationship without giving reasons and with immediate effect.

This is exceptional under labour law, where the termination of employment shall be usually justified by both the employee and the employer.

4. Prohibition of longer probationary period

The strict, non-extendable legal regulation of the term of the probationary period is precisely based on the exceptional nature of this instrument.

Given that the LC does not allow to stipulate a probationary period of more than 3 months, it could be a possible solution to stipulate a short-term fixed-term employment contract after the probationary period, or to conclude a 3-month employment contract at the beginning of the employment relationship, which may then be extended.

However, Hungarian labour courts have repeatedly held that either a fixed-term employment contract is concluded for the same purpose after the probationary period or successive fixed-term employment contracts are concluded, there is a chance that these clauses will be considered invalid in view of the infringement of the employee's legitimate interests, which will result that the employment relationship being deemed to have been established for an indefinite period.