Blog » CAN THE IMMEDIATE TERMINATION OF EMPLOYMENT REFERRING TO PRIOR WARNINGS BE VALID?
CAN THE IMMEDIATE TERMINATION OF EMPLOYMENT REFERRING TO PRIOR WARNINGS BE VALID?
14 October 2021
In its recent judgment, the Hungarian Supreme Court addressed the question whether the immediate termination is lawful if it refers to several minor infringements of the employee already sanctioned by the employer prior to the termination. In our short article we analyse the decision of the Supreme Court and the relevant judicial practice.
The plaintiff (“Employee”) was employed by the defendant (“Employer”) as a teacher. The Employer has repeatedly warned the Employee, typically due to his absences, the non-performance of work related asks and the inappropriate tone used against his supervisor.
The Employer terminated the employment of the Employee with immediate termination, in which the Employer referred to the Employer’s repeated misconduct already assessed with written warnings, the specific misconduct prior to the notification of the termination (non-performance of the instruction) and the Employee's unacceptable way and content of communication. In the termination, the Employer stated that he had lost confidence in the Employee and that it was impossible to maintain the employment further.
The Employee challenged the termination before court and pointed out in his application that, on the one hand, the immediate termination in relation to the breach is a disproportionately serious legal consequence and, on the other, a misconduct previously sanctioned by written warning cannot serve as a basis for immediate termination based on the principle of “ne bis in idem”.
2. The first and the second instance court decision
The first instance court agreed with the Employee, that his behaviours, already sanctioned once cannot form the basis of termination. However, they may justify a repetitive occurrence, and a misconduct repeated despite the warning might be the basis for immediate termination.
In the opinion of the court of first instance, in the present case, even the tone used in the correspondence established the lawfulness of the termination, therefore the court did not consider it necessary to examine further questions.
The second instance court, acting based on the Employee's appeal, confirmed the judgment of the lower court.
According to the second instance court, the disrespectful tone in itself could not be considered as a serious breach, meaning that is could not serve as a lawful reason of the immediate termination.
However, referring to the judicial practice, the second instance court established that several minor misconducts and the disrespectful conduct could lead to a loss of trust. Overall, the previous misconducts of the Employee documented by the written warnings and his communication style could led to a loss of trust on the Employer's side, therefore the maintenance of the employment became impossible, thus the immediate termination was lawful.
3. The decision of the Hungarian Supreme Court
The Employee, in his request for review, argued, that since the Employer referred to breach of obligation in his termination, the second instance court could not have declared the termination lawful on the grounds of loss of trust.
The Supreme Court, on the basis of uniform case-law stated that immediate termination shall always be assessed based on its content. With that in mind, the second instance court lawfully examined the issue of loss of trust, since the Employer also referred to the fact in the termination that he had lost his trust in the Employee as a result of his conduct.
The Supreme Court entirely agreed with the second instance court that the immediate termination was lawful, since several minor misconducts and disrespectful conduct of the Employee could lead to a loss of trust, and the warnings previously applied can be assessed as the stages of development of this process.
4. Assessment of the decision, Summary
By its present judgment, the Hungarian Supreme Court, on the one hand, confirmed its previous case-law that, in the context of the immediate termination, it is never relevant that the employer specifically indicated the serious breach or the impossibility of the maintenance of the employment as a legal basis, but whether the termination of the employment could be considered lawful on the basis of the content of the termination.
On the other hand, it can be concluded from the judgment of the Supreme Court that the termination in which the employer refers to the previously sanctioned infringements as a process leading to the loss of trust does not conflict with the prohibition of double evaluation (ne bis in idem).
However, in our view, there are limits of the reference of previous misconduct.
In the analysed decision, the previous infringements already assessed occurred within approximately one year or six months prior to the termination, thus the reference to them did not conflict with the requirement of timeliness (rationality), which is an important factor under Hungarian case law, when evaluating the lawfulness of the termination of an employment relationship.
By contrast, references to misconducts committed several years before the termination would most likely be unfounded.
1 See Section 78 (1) of the Act I of 2012 Labor Code
2 See Section 78 (1) b) of the Labor Code
3 Judgement of Hungarian Supreme Court published under No. BH 2021.9.267
4 See Section 78 (1) a) of the Labor Code
5 See Section 78 (1) b) of the Labor Code
CAN A 20-YEAR-OLD CHOICE OF COURT AGREEMENT BE ENFORCED IN HUNGARY?
In business, it often happens that the parties enter into a contract with a choice of court agreement for eventual legal disputes and then, years or even decades later, the legal dispute occurs. What is the effect of changes that have occurred in legislation on the choice of court agreement? Will the applicability of the choice of court agreement be decided according to the rules in force at the time of the conclusion of the contract or those applicable when the lawsuit was initiated? A recent decision of the Hungarian Supreme Court allows for an analysis of these questions.(1)Read more »
HUNGARIAN COMPANIES ACT CHANGED – ONLINE LLC FORMATION FROM AUGUST 2022
Due to the recent amendment of the Companies Act with effect from 1 August 2022, EU citizens and companies can form a limited liability company or a branch office in Hungary fully online, in a fast-track registration procedure. The new provisions make it easier and faster to start a business in Hungary, even if there is minor restriction in relation with capital contributions. In this article we sum up the most important new rules.Read more »
WHO PAYS THE PRICE OF A CLERICAL MISTAKE UNDER HUNGARIAN LABOUR LAW?
As the well-known proverb says humans make mistakes. Thus, it can happen that a contract prepared by the employer contains clauses that do not represent his real will. What measures can the employer take in such cases under Hungarian labour law? Is the employee expected to point out the error? The recent judgement of the Hungarian Supreme Court answers these questions.Read more »