Termination of contract
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Termination

When planning our career the question often arises how are we going to notify our current employer if the job search successful.
We would like to help those who are not familiar with this topic and provide a few good advice and templates, so that the transition between the current and future workplaces goes smooth and according to laws and regulations.

Termination of contract with mutual agreement

This can happen with the written statement between the parties, which should indicate the last day of the employment.

Ordinary dismissal

It is important to know that the right to terminate can be exercised by both the employee and the employer. In case of ordinary dismissal a written statement must be drafted, which aims at terminating the legal relationship, even without the approval of the other party. However, there are differences between ordinary termination by the employer and that of by the employee:
if the employer terminates the employment he/she must justify the reason of dismissal (expect when the employee is a retiree). The justification shall clearly indicate the reason for the termination, because in the event of a dispute the employer must prove that there was a valid reason for the termination. In this case, it is not enough to refer to the employee’s incompetence, if it is not a concrete fact.

There are three possible reasons for a termination:

  • reason in connection with the employee’s ability
  • reason in connection with the employee’s behaviour during the employment relationship
  • reason in connection with the employer’s operation

Severance payment
Employees who spent at least three years with the company are entitled to severance payment if their employment is terminated by regular dismissal or as a consequence of the dissolution of the employer without legal successor. The amount of severance payment depends on the length of the employment.
Employees can terminate their indefinite employment contract any time without giving a reason. In this case the employer can obligate the employee to spend his termination period. The termination period can be at least 30 to up to 365 days.

Extraordinary termination

The difference between extraordinary and ordinary termination is that the extraordinary termination ceases the employment immediately. In this case, the reasoning must be clear end specific. Extraordinary termination may be exercised when any of the parties intentionally or by gross negligence violate any substantive obligations arising from the employment relationship, or when any of the parties, through their behaviour, make it impossible to sustain the employment.

The termination under probationary period is not an extraordinary termination. In this case both parties can terminate the employment by written notice with immediate effect. This should be also included in the work contract.
Under both terminations the employee has to give up its work station and all equipments belonging to the employer. The employer has to pay the remaining wages and has to issue all papers and documents in connection with the employment which are stipulated by law.

All rules are regulated by the Hungarian Labour Code which can be found in electronic format on the following page: www.magyarorszag.hu.