01 July 2020

Whether the lack of handover makes the dismissal unlawful based on the recent judgment of the Hungarian Supreme Court? What happens in case the employee fails to take over the dismissal? We address these issues in our article by analysing a recent judgment of Hungarian Supreme Court.

1. Facts

The plaintiff employee (“Plaintiff”) has worked at the defendant employer (“Defendant”) as director since the end of October 2015. Due to the amendment of the employment contract, the Plaintiff has worked as a leading expert since January 2016

Less than a year later, in February 2017, the Defendant decided the termination of the employment relationship of the Plaintiff due to reorganisation. Defendant also decided that in case the Plaintiff would not give his consent to the termination by mutual consent, he would terminate the employment by dismissal.

The Defendant communicated the above to the Plaintiff, who read the termination documents, but he did not give his consent to the termination by mutual consent and he did not sign the handover of the dismissal. The Defendant did not hand over the dismissal due to the lack of acknowledgment of receipt of the handover by the Plaintiff, and set up a minutes of meeting about what had happened. Later the Defendant has sent the written dismissal by post.

2. Claim of the Plaintiff

The Plaintiff sued the Defendant in front of the labour court, and demanded the reinstatement of his employment relationship, and HUF 22 million as a compensation for loss of income.

In his statement of claim, he primarily contested the dismissal of the employer for formal reasons, stating that the Defendant did not provide enough time to choose between the mutual consent and dismissal and that the Defendant sent the documents concerning dismissal weeks later. According to the view of the Plaintiff, the Defendant did not communicate the dismissal with him lawfully.

Moreover, the Plaintiff contested the lawfulness of the dismissal for substantial reasons, too.

3. The first- and second instance judgment

The first instance court rejected the claim of the Plaintiff for establishing the dismissal unlawful.

In the view of the first instance court, the dismissal was not unlawful for formal reasons as the Defendant appropriately proved it with the minutes that the Plaintiff refused the take over the dismissal.

Consequently, the Defendant properly communicated the dismissal, therefore the late sending of the documents containing the dismissal did not make the dismissal unlawful. In addition, the reason of the termination of the employment relationship was also in compliance with the regulations.

The second instance court fully agreed with the first instance court decision, stating that the signature of the Plaintiff verifies only the fact of the handover, therefore the proved refusal of the acknowledgment of receipt resulted that the dismissal had to be considered  communicated, in accordance with the presumption set forth by the Labour Code (“LC”).

4. Decision of the Curia

The Curia upheld the final judgment, according to its reasoning, a unilateral statement aimed at terminating the employment took effect by the communication, therefore it is irrelevant that the Plaintiff have not accepted the statement or its content or has failed to sign it.

The Curia noted, that both parties violated the obligation of cooperation under the Labour Code: the Plaintiff by failing to sign the dismissal and the Defendant by failing to hand over the documents due to the lack of signature, but this had no effect on the lawfulness of the dismissal for the above reasons.

5. Analysis

Based on the above case, it can be concluded that the communication of the dismissal is more important question in some cases than the reasoning of the dismissal.

Indeed, employees tend to invoke formal or procedural infringements regarding dismissal, because in case the dismissal is unlawful based on formal reasons, it shall be wholly unlawful, even if the reasons of the dismissal are valid.

However, the Labour Code clearly states, that the dismissal becomes effective when it is communicated to the other party and it creates a special “presumption” for the case, when the handover is refused or its delivery is intentionally prevented.

Consequently, in line with the consistent case-law of Hungarian courts, the communication of the dismissal takes effect regardless of the consent of the other party. The sole fact that the handover of an already communicated dismissal is made conditional by the Employer upon the acknowledgment of receipt by the employee is a minor infringement, which does not render the dismissal unlawful.

Based on the above, in a litigation, it is important whether an employer can provide sufficient evidence that the dismissal was duly communicated with the employee. The signature of the party, or failing that, a minutes of meeting about the attempt to handover confirmed by two witness can be suitable to prove the that the dismissal was duly communicated.