LAWFUL DISMISSAL IN HUNGARY - PART V: PROTECTION AGAINST DISMISSAL

29 January 2020

In the previous articles on the lawful dismissal, we discussed that, ranging from the employee’s behaviour to the employer’s reorganization, there can be many legitimate reasons for dismissal by the employer. However, irrespective of the legitimate reason, the employment relationship cannot be terminated if the employee is protected against dismissal by law (i.e. the Labour Code). From our article, you can learn about these protections.

1. Dismissal protection granted by the Labour Code.

During the protection, in some cases dismissal by the employer is fully prohibited, while in other cases the right is substantially restricted to a narrow scope. With the prohibitions, the law protects the existential safety of the employee in situations where finding a new job would not be a viable or would cause the employee disproportionate difficulty.

It is important that the LC. provides protection only in the case of a "regular" termination (i.e.: termination with notice), there is no obstacle to immediate termination if its conditions are otherwise met.

The system of dismissal protection

The LC. prohibits or restricts termination by the employer in many cases, which we summarize in the table below:

2. Full prohibition of dismissal

The main feature of the category is that employment may not be terminated for any reason during the term of protection. Within the category, a distinction can be made between absolute and relative prohibitions.

a. Absolute prohibitions

During the term of an absolute prohibition, (regular) termination cannot be lawfully communicated to the employee. This means that the termination will be wrongful if the notice of termination is communicated during the prohibition.

Absolute prohibitions, except for military service, typically affect female employees. While the fact of maternity leave or parental leave are clear, pregnancy or participation in human reproduction procedures are not always known to the employer.

Therefore, before giving notice of the termination, it is recommended for the employer to inform the employee of the concept of dismissal protection and then ask the employee to make a statement whether he/she is aware of the existence of an absolute prohibition in relation to him/her. The process shall be recorded in the Minutes.

b. Relative prohibitions

It is common for employees to suddenly become “sick” when they sense that “dismissal is in the air” or for other reason, the employment has to be terminated during the employee’s incapacity for work. It is a common misconception that an employee cannot be dismissed during incapacity (commonly known as "sick leave").

In fact, during relative prohibition, the notice of termination can be given, but the notice period will start only after the protection has ceased. So that when the employee is again fit for work, but no later than one year from the start of sickness cash benefit.

Termination during incapacity for work may also surprise the employer, as the dismissed employee may not "rush back to work" and remain on sick leave. Therefore, it is better for the employer to consider whether to terminate the employment during the relative prohibition.

3. Restricted dismissal right

In these cases, the employer’s right to termination is restricted to a narrow scope.

The restricted right of termination is most often encountered in relation to employees of "protected age", which means the 5-years period before reaching the age limit of old-age pension. A mother or a single father of a child under 3 years of age are entitled to the same protection as workers of protected age, unless they take maternity leave or unpaid leave for child care.

The protection in the above situations consists of two parts: first, the employee may only be dismissed based on behavioural reasons in case of a serious misconduct. Second, if the dismissal is due to the employee's ability or reorganization of the employer, the employer must first offer the employee another job corresponding to his or her abilities and qualifications, if such position is vacant at the workplace of the employee.

4. Special restrictions

Finally, we would like to highlight three special cases where termination is also limited or subject to further conditions.

Pursuant to the Labour Code, the parties may mutually exclude the possibility of termination for a maximum period of one year from the commencement of employment. Termination during this period will be wrongful.

Fixed-term employment may only be terminated based on the employee's ability, due to an unavoidable external cause or in case of an ongoing insolvency proceeding against the employer.

Finally, if there is a trade union present at the employer, the employer may only dismiss union officials with the consent of the union. Otherwise, termination will be wrongful.

5. Conclusion

As you can see, the Labour Code in many cases prohibits or restricts "regular" termination by the employer. Notice given during absolute prohibition leads to wrongful termination, as well as if the termination is being based on a ground which cannot be invoked against the protected employee (e.g. employee of protected age)

Since a wrongful termination can cost a lot to the employer, dismissal protection should always be considered before dismissal. Understanding labour law requires a high level of legal knowledge, so we recommend that you entrust these matters to legal professionals.