Blog » WHY EMPLOYERS SHOULD DEFINE THE PLACE OF WORK WITH CARE IN HUNGARY? –DECISION OF THE CURIA
WHY EMPLOYERS SHOULD DEFINE THE PLACE OF WORK WITH CARE IN HUNGARY? –DECISION OF THE CURIA
17 April 2019
In a fresh judgement of the Curia the main question was how to define the working place in the labour contract. At first sight, this seems quite simple and it might be surprising why such a question needed to be decided by the highest forum. However, from our article summarizing the decisions of the Curia you will see that even a simple question can be misunderstood and can cost a fortune for the employer.
The claimant, shortly before reaching the age limit of old-age pension worked as a refining and maintenance expert at the respondent employer. In the labour contract of the employee, the working place was defined by the address of the branch of the employer and by the name and code of the business unit.
The employer carried out a mass redundancy and terminated the claimant’s employment claiming business reorganisation. In the justification of the termination the employer declared that there is no other open position for the claimant at his working place.
2. Legal background
In order to understand the case well you need to know that in Hungary, employees are entitled to a special protection in case of termination within 5 years as of reaching the age of old age pension.
Within this 5 years’ period the employer may only terminate the employee’s employment claiming business reorganisation if at the workplace defined in the labour contract there is no open position to offer for the employee or if the employee refuses the employer’s offer.
3. The litigation
Returning to our leading character, the claimant started a litigation against the employer claiming that the termination was unlawful. He claimed that his working place defined in the labour contract was the employer’s branch where there should have been open positions which the employer could have offered for him.
The employer requested the court to refuse the case and claimed that the claimant’s working place was the specified business unit at the branch and at the business unit there was not any open position to offer for the employee.
4. The decision of the Curia
Based on the above it was the job of the Curia to decide what was exactly the working place of the claimant defined in the labour contract. Indeed, it depends from this definition whether the existence of the open position should have been examined at the whole branch or only at the business unit.
The Curia recalled that the working place is a geographically defined territory of the employer. Based on that, the working place declared in the labour contract cannot be interpreted narrowly. Thus, it cannot be concluded that solely the business unit, where the claimant performed his job shall be considered as his working place.
In the light of the above, the employer should have examined regarding the whole branch whether there is an open position to offer for the claimant. Since the employer could not prove that there was not any open position to offer for the claimant at the branch, the termination shall be regarded as unlawful and the employer should pay income foregone to the claimant.
5. Lesson learnt
The lesson that you can learn from the decision of the Curia is that the working place shall be defined as a geographical area, eg. by address or other identifier, such as a plot number. Although you can clarify in the labour contract the business unit where the employee shall perform work, the working place will never be this business unit but the “broader” geographical area, eg. the registered seat or the branch office.
CAN THE CHOICE OF COURT AMOUNT TO THE CHOICE OF LAW? – THE SUPREME COURT DECIDED
Shall it be considered as the choice of the English law if the party first starts a litigation in England regarding to a Hungarian project? How much of a role do the procedural acts of the parties play in relation to the choice of law applicable to a contract? In this article we analyse the fresh judgement of the Supreme Court, in which, among others, the highest court addressed the issue of the tacit choice of law.Read more »
TEMPORARY EMPLOYMENT AT DIFFERENT EMPLOYER IN HUNGARY – NEW LEGAL RELATIONSHIP?
What are the main risks if you employ your staff at different employer, within or outside the company group? Is that a new legal relationship, is remuneration payable for that, or the “good old” labour contract can cover this situation? In a recent judgement the Hungarian Supreme Court Curia addressed these questions. In our short article we analyse the judgement and summarize what you as an employer should consider if you would like to temporary reassign your employee.Read more »
OVERVIEW OF THE TRAVEL RESTRICTIONS TO HUNGARY FROM 1st SEPTEMBER 2020
Travel restrictions to Hungary (“Travel Restrictions”) can be regulated on unilateral, bilateral or multilateral level. So far, we have knowledge about one unilateral and three bilateral travel restrictions adopted by the Hungarian government, so this overview will be focused on these. However, given the fast-changing nature of the situation, it can be the case that more bilateral agreement will be adopted, that change the current legal environment.Read more »