The basic rule on notice
Under the Hungarian Labour Code, the statutory basis is a 30-day notice period, which starts on the day after notice is given at the earliest. Where the employer gives notice, certain absences, such as sick leave, may postpone its start.
The employment contract and any collective agreement must also be checked. The parties may agree on a longer notice period of up to six months; special rules apply to certain forms of employment.
When the employer gives notice: a longer period
Where the employer gives notice, the 30 days are extended based on the time spent with the employer:
| Length of employment | Extension | Total notice period |
|---|---|---|
| 3 years | +5 days | 35 days |
| 5 years | +15 days | 45 days |
| 8 years | +20 days | 50 days |
| 10 years | +25 days | 55 days |
| 15 years | +30 days | 60 days |
| 18 years | +40 days | 70 days |
| 20 years | +60 days | 90 days |
Where the employer gives notice, it must release the employee from work for at least half of the notice period. For this time, absence pay is due as a rule. For fixed-term employment, the notice period lasts no longer than until the end of the fixed term.
When is severance pay due?
As a rule, severance pay is due after at least three years of qualifying employment, where the employer gives notice or the employer ceases to exist without a legal successor. Where the employer gives notice, the length of employment is assessed at the time notice is given. Certain unpaid absences are not counted.
It may also be due in other statutory cases: for example, if after a change of employer the new employer is not subject to the Labour Code, or if the employee lawfully terminates with immediate effect because of the employer's serious breach of contract.
| Length of employment | Severance pay |
|---|---|
| at least 3 years | 1 month's absence pay |
| at least 5 years | 2 months' |
| at least 10 years | 3 months' |
| at least 15 years | 4 months' |
| at least 20 years | 5 months' |
| at least 25 years | 6 months' |
If the termination giving rise to severance pay occurs within five years before the employee reaches their statutory retirement age, the statutory severance pay increases by a further one, two or three months' absence pay, depending on the length of employment.
When is severance pay not due?
- as a rule, not where the employee resigns with notice or the employment ends by mutual agreement; an agreement or a separate statutory provision may give a different entitlement;
- if the employee qualifies as a pensioner when notice is given or when the employer ceases to exist without a legal successor;
- if the reason for dismissal is the employee's conduct in relation to the employment, or their ability not connected to health.
What to watch out for
As a rule, an employer's notice of dismissal must state its reasons, and the reason must be clear, genuine and well-founded. There are exceptions, for example dismissing a pensioner employed for an indefinite term. Where reasons are required, missing or defective reasons can make the dismissal unlawful. A claim for unlawful dismissal must, as a rule, be filed within 30 days of the notice being given, so it is worth seeking advice in good time.
Legal backgroundAct I of 2012 (Labour Code) Sections 40, 63, 66, 68–70, 77–78 and 287.
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This article is for general information only and does not constitute legal advice. For advice on your specific situation, please get in touch.