The reasons for regular termination as set out in the Labour Act are as follows:
- if the need for work ceases to exist for economic, technical or organisational reasons (‘notice due to business reasons’); or
- the employee is incapable of fulfilling his employment-related duties due to certain personal characteristics or qualifications (‘notice due to personal reasons’); or
- the employee intentionally breaches a contractual obligation (‘notice due to misconduct’); or
- if the employee did not satisfy the employer’s requirements during the probationary period.
Generally, employees in Hungary are not required to justify ordinary dismissals (“felmondás”) in case of an open-ended employment relationship. Nevertheless, they must observe prescribed notice periods.
If the employer terminates an open-ended employment relationship, as general rule, it must provide a reason for it, which has to be in connection with (i) the behaviour; (ii) skill; (iii) health status of the employee; or (iv) the operation of the employer. However, the employer is not required to give reasons for terminating a permanent employment relationship if the employee in question qualifies as a pensioner.
Certain “vulnerable” employees enjoy additional protection against dismissal (e.g. a more serious infringement to justify a dismissal, an obligation to seek another job profile for the employee in specific cases, etc.). These include women or single parents until their child reaches three years of age as well employees within the five-year period prior to the statutory age limit for a retirement pension.
The employer shall be permitted to terminate a fixed-term employment relationship by notice (i) if undergoing liquidation or bankruptcy proceedings; (ii) for reasons related to the employee’s ability; or (iii) if maintaining the employment relationship is no longer possible due to unavoidable external reasons.
Employees are required to give reasons for terminating their fixed-term employment relationship. The reason given for termination may only be of a nature that would render maintaining the employment relationship impossible or would cause unreasonable difficulties in light of his/her circumstances.
Discriminatory dismissals or dismissals due to “illegal reasons” can be challenged by employees before the relevant court.
An employer may not dismiss an employee without a legally valid cause.
Dismissal may be based on personal grounds (e.g. disciplinary dismissal, dismissal due to professional inadequacy, dismissal due to incapacity) or economic grounds (e.g. economic difficulties, technological changes), or subject to specific conditions, without stating a specific motive.