WHEN QUALIFICATION-BASED CHANGE OF AN EMPLOYEE IS LAWFUL IN HUNGARY?

18 November 2021

In part IV of our series of articles on the reasons for termination of the employer, we have already mentioned the qualification-based change as reason for termination in connection with the operation of the employer. Since qualification-based change is perhaps the least known reason dismissal, we summarise the Hungarian judicial practice in this article.

The previous article is available here:

LAWFUL DISMISSAL IN HUNGARY - PART IV: TERMIANTION BASED ON EMPLOYER’S OPERATIONS - Blog - Smartlegal

 

 

1. The concept of qualification-based change

Act I of 2012 on the labour code ("LC") does not expressly mentions the qualification-based change as a reason for dismissal, but it is considered by domestic judicial practice for decades as a legitimate reason for terminating the employment.

In the case of qualification-based change, as the name suggests, the employer justifies the dismissal on the basis of the fact that it is necessary to employ a higher-skilled employer in the given job.

In a decision, the Curia defined the concept of qualification-based change as a change of persons in order to raise the quality of work.[1]

2. Qualification-based change as a reason connected to the employer's operation

Although qualification-based change is generally related to the ability of the employee, the domestic judicial practice qualifies this reason of termination which is essentially connected to the employer's operations.

The above qualification is important mainly because the chances of the employee to call into question the dismissal related to the operation of the employer are lower than in case of termination on grounds of behaviour or ability.

For example, in case of a qualification-based change, an employee cannot successfully claim that the employer's termination was impractical or uneconomical.

It is important to note, that although it is one of the reasons that has arisen in the employer's operation, the general rules on termination apply. For example, if the employer indicated the reorganisation as the reason for the termination, later, in a possible lawsuit, he cannot claim that the termination of the employment was in fact a qualification-based change.

Given that the qualification-based change is not specifically described in the LC, we have to rely on judicial practice to assess how it is legally applicable in a particular case.

3. Conditions for qualification-based change

In case of a qualification-based change, the employee may also challenge the termination by pretending that it is unfounded. In this case, the employer typically shall prove the qualification requirements for the job in question, the qualifications of the replaced and the new employee, and how the former employee performed his job.

Based on the examination of the above criteria, in the following cases the Hungarian Supreme Court found the employer's termination unfounded.

• The employer required a higher education degree for the position held by the employee, as the employer introduced a new accounting program. However, the former employee without the necessary education, continued to perform his job for six months under the changed conditions, so the termination based on a qualification-based change afterwards was unfounded.[2]
• Termination based on qualification-based change was unlawful when the employer set a higher qualification requirement for the given job while the tasks and the conditions of the job did not change in fact.[3]
• The court found the termination based on a lack of knowledge of the English language to be unreasonable and declared that it breached the requirement of equal treatment, since there were no foreign employees in the given field, travel to abroad in the context of the job was not necessary, and no other employees were terminated in the whole staff in the same basis.[4]

However, there were cases where the Hungarian Supreme Court found the terminations based on qualification-based change valid. The most important findings of the Supreme Court are the follows:

• In case of a qualification-based change, it is possible to examine not only the existence of the educational qualifications and qualifications necessary for the performance of the job, but also other circumstances, such as rating and age. [5]
• The fact that the employee has carried out his job without any fault in possession of his existing qualifications does not preclude the possibility of a qualification-based change.
• The employer is entitled to determine what knowledge is considered relevant in a given position. Consequently, termination based on a lack of language skills is not unlawful, when the professional knowledge of a new employee, speaking a foreign language is weaker than the professional knowledge of the former employee, not speaking that language.[6]

4. Conclusion

Prior to the qualification-based change, the employer shall lay down the conditions and tasks required for the given job (e.g. knowledge of languages, knowledge of specific computer programs).

A qualification-based change may only take place if the former employee does not fulfil the conditions laid down above and only a new employee who meets the above requirements can be employed.

If, on the basis of the above, it is justified to terminate the employment in the context of a qualification-based change, the qualification-based change shall also be indicated as the reason for termination.

The drafting of the termination requires the expertise of labour law, so we always recommend to turn to an expert.