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Source and scope of regulations - 2017    

References
  • Labour Code [LC], Act I of 2012 in force since July 1st, 2012.
    Date: 13 Dec 2011 (view in NATLEX »)
  • Act on Equal Treatment and Promotion of Equal Opportunities, No CXXV of 2003
    Date: 28 Dec 2003; view website »
Scope
Size of enterprises excluded (≤): 20
Remarks:
  • Exclusion only applicable to collective dismissals: see definition of collective dismissal in sec. 71 (1) LC (in former LC sec. 94/A (1))
    The rules on individual dismissals apply to all enterprises.

Workers' categories excluded:
Remarks:
  • In the previous Labour Code Sec. 2 (1) stated that public service relationship are governed by a separate act. The New Labour Code which came into force in 2012 does not provide with the above mentioned rule.

Types of employment contracts - 2017    

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Maximum probationary (trial) period: 3 month(s)

Remarks:
  • Pursuant to sec. 45.5 LC, the trial period may not exceed 3 months. In comparison to the regulation in the previous Labour Code which provided for a trial period of 30 days at least with the possibility of extension for up to 3 months if so stipulated in a collective agreement or agreed upon by the parties, the new Labour Code has increased the period of probation for up to 3 months in all cases.

Fixed term contract (FTC):
  • FTC regulated: Yes
  • Valid reasons for FTC use: no limitation
    Remarks:
    • The LC does not require any specific reason for resorting to a FTC for the first time (sec. 192 LC).
  • Maximum number of successive FTCs: no limitation
    Remarks:
    • In the previous Labour Code sec. 79 (4) provided that a contract renewed without a valid reason ("rightful interest") on the part of the employer and aimed at compromising the interest of the employee shall be deemed established for an indefinite duration. This provision has been repealed in the new Labour Code.
  • Maximum cumulative duration of successive FTCs: 60 month(s)
    Remarks:
    • Sec. 192 (2) LC
      In the previous Labour Code the 60 months restriction did not apply to executive employees (sec. 190 (1) of the former LC), the new Labour Code does not contain such provision any longer.
  • % of workforce under FTC: 8.7 %
    Remarks:
    • Source: Eurostat, for the year 2016.
      The figure refers to the percentage of employee with a contract of limited duration (= temporary job) of total number of employee aged 15-74 years.
      Eurostat data are based on the following definition:
      "A job may be considered temporary if employer and employee agree that its end is determined by objective conditions such as a specific date, the completion of a task or the return of another employee who has been temporarily replaced (usually stated in a work contract of limited duration). Typical cases are: (a) persons with seasonal employment; (b) persons engaged by an agency or employment exchange and hired to a third party to perform a specific task (unless there is a written work contract of unlimited duration); (c) persons with specific training contracts."

Substantive requirements for dismissals (justified and prohibited grounds) - 2017    

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Obligation to provide reasons to the employee: Yes
Remarks:
  • Sec. 66(1) LC (in the former LC sec. 89 (2) LC).


Valid grounds (justified dismissal): any fair reasons
Remarks:
  • Sec. 66(2) LC (in connection with his/her ability, his/her behavior in relation to the employment relationship or with the employer's operations), (in the former LC sec. 89(3)).


Prohibited grounds: marital status; pregnancy; maternity leave; race; colour; sex; sexual orientation; religion; political opinion; social origin; nationality/national origin; age; trade union membership and activities; disabilities; financial status; performing military or civil service; language; parental leave; state of health; ethnic origin
Remarks:
  • - Race, colour, sex, etc. are listed as prohibited grounds for discrimination including in the context of termination of employment in the Equal Treatment Act (No. 125 of 2003). (Sec. 8 and 21 c) ETA).
    - In addition, pregnancy, parental leave; a leave of absence taken without pay for caring for a child (Sections 66(3), 128 and 130 LC).
    -Sec. 271(2) provides that no employee shall be dismissed on a ground of being a member of any trade union.


Workers enjoying special protection: workers' representatives; pregnant women and/or women on maternity leave; workers with family responsibilities
Remarks:
  • * Prior consent of the higher ranking trade union body is requested in case of dismissal of an elected trade union representatives: sec. 273(1) LC (in former LC sec. 28 (1)).
    * The LC provides for protected periods during which ordinary dismissal can not take place: pregnancy, parental leave.: sec. 65 3 LC (in former LC sec. 90 (1)).

    New in 2012
    Section 89(7) of the previous Labour Code provided that workers who are between 57 and less than 62 years old, can only be dismissed in "particularly justified cases", unless they are already entitled to pension benefits. However, new Labour Code does not contain such provision.

    Contrary to the previous regulation, the new Labour Code allows for dismissal of an employee during the period of sick leave. Sec. 66(7) LC now states: The employer may terminate by notice the employment relationship of a worker who is receiving rehabilitation treatment or rehabilitation benefits due to the worker's capacity related to medical reasons if the worker can no longer be employed in his/her original position and no other job is available that is considered appropriate for his/her medical condition, or if the employee refuses to accept a job offered by the employer without good reason.


Procedural requirements for individual dismissals - 2017    

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Notification to the worker to be dismissed: written

Remarks:
  • Sec. 66 LC (in former LC sec. 89)

Notice period:
Remarks:
  • Sec 68 LC (in former LC sec.92 LC)provides for a minimum notice period of 30 days, which may be extended by:
    * 5 days after 3 years of service;
    * 15 days after 5 years of service;
    * 20 days after 8 years of service;
    * 25 days after 10 years of service;
    * 30 days after 15 years of service;
    * 40 days after 18 years of service;
    * 60 days after 20 years of service.
    New in 2012
    The new Labour Code does not provide any more for maximum notice period of one year. Also, the new LC states that by the agreement of the parties notice periods of 5 days after 3 years of service and 15 days after 5 years of service, can be extended up to 6 months (Sec. 69(3) LC).
    • tenure ≥ 6 months
      • 30 day(s).
    • tenure ≥ 9 months
      • 30 day(s).
    • tenure ≥ 2 years
      • 30 day(s).
    • tenure ≥ 4 years
      • 35 day(s).
    • tenure ≥ 5 years
      • 45 day(s).
    • tenure ≥ 10 years
      • 55 day(s).
    • tenure ≥ 20 years
      • 90 day(s).

    Pay in lieu of notice: No

    Notification to the public administration: No

    Notification to workers' representatives: No

    Remarks:
    • However, in case of dismissal of an elected trade union representatives, prior consent of the higher ranking trade union body is requested: 273(1) LC (in former LC sec. 28 (1)).

    Approval by public administration or judicial bodies: No

    Approval by workers' representatives: No

    Remarks:
    • However, in case of dismissal of an elected trade union representatives, prior consent of the higher ranking trade union body is requested: 273(1) LC (in former LC sec. 28 (1)).

    Procedural requirements for collective dismissals for economic reasons (redundancy, retrenchment) - 2017    

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    Definition of collective dismissal (number of employees concerned):
    At least:
    1) 10 employees in undertakings with 20 to 99 employees;
    2) 10 % of the employees in undertakings with 100 to 299 employees;
    3) 30 employees in undertakings with at least 300 employees within 30 days.

    Remarks:
    • Sec. 71 LC (in former LC sec 94/A (1))

    Prior consultations with trade unions (workers' representatives): Yes

    Remarks:
    • Sec. 72(1) (in former LC sec. 94/B LC)

    Notification to the public administration: Yes

    Remarks:
    • Sec. 72(5) LC and sec. 74 LC (in former LC Sec. 94/D LC)

    Notification to workers' representatives: Yes

    Remarks:
    • Sec. 72(1) (in former LC sec. 94/B LC)

    Approval by public administration or judicial bodies: No

    Approval by workers' representatives: No

    Priority rules for collective dismissals (social considerations, age, job tenure): No

    Remarks:
    • No criteria listed. Selection criteria are mentioned in sec. 72(2) (in former LC sec. 94/B (1) b)) as one of the elements to be communicated to the worker's representatives during the consultation process.

    Employer's obligation to consider alternatives to dismissal (transfers, retraining...): Yes

    Remarks:
    • Art. 94/B (5) LC: elements to be considered in the course of the consultation process.

    Priority rules for re-employment: No

    Severance pay and redundancy payment - 2017    

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    Severance pay:
    Remarks:
    • Sec. 77 (in the former LC sec. 95 LC) .
      Severance pay - following a dismissal (including on economic grounds) or the dissolution of the employer - varies according to the length of service, as follows:
      * 1 month's pay for at least 3 years of service;
      * 2 months' pay for at least 5 years of service;
      * 3 months' pay for at least 10 years of service;
      * 4 months' pay for at least 15 years of service;
      * 5 months' pay for at least 20 years of service;;
      * 6 months' pay for at least 25 years.
      New in 2012
      The previous Labour Code contained the provision which stated that while workers who qualify as pensioner (62 year old) are not entitled to severance pay, workers between 57 and less than 62 are entitled to the above mentioned amount increased by 3 months' wages. This has been removed in the new Labour Code.
      Also, the new Labour Code has removed entitlement to severance pay for an employee who has been dismissed in connection with his/her behavior in relation to the employment relationship or on grounds other than health reasons.
    • tenure ≥ 6 months: 0 month(s)
    • tenure ≥ 9 months: 0 month(s)
    • tenure ≥ 1 year: 0 month(s)
    • tenure ≥ 2 years: 0 month(s)
    • tenure ≥ 4 years: 1 month(s)
    • tenure ≥ 5 years: 2 month(s)
    • tenure ≥ 10 years: 3 month(s)
    • tenure ≥ 20 years: 5 month(s)
    Redundancy payment:
    Remarks:
    • No specific redundancy payment. Severance pay covers any dismissal for economic reasons (sec. 77 LC (in the former LC sec. 95).
    • tenure ≥ 6 months: 0 month(s)
    • tenure ≥ 9 months: 0 month(s)
    • tenure ≥ 1 year: 0 month(s)
    • tenure ≥ 2 years: 0 month(s)
    • tenure ≥ 4 years: 1 month(s)
    • tenure ≥ 5 years: 2 month(s)
    • tenure ≥ 10 years: 3 month(s)
    • tenure ≥ 20 years: 5 month(s)

    Avenues for redress (penalties, remedies) and litigation procedure for individual complaints - 2017    

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    Compensation for unfair dismissal - free determination by court: No

    Remarks:
    • Sections 82 and 83 LC (in the former LC sec. 100 (4) LC)

    Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method):
    Compensation (in lieu of reinstatement): max. 12 months' pay

    Remarks:
    • Sec. 82 (2) (in former LC sec. 100 (4) and sec. (6) LC)
      New in 2012
      Previous Labour Code provided for a minimum 3 months' pay of compensation, while the Labour Code does not contain a minimum limit.

    Reinstatement available: Yes

    Remarks:
    • Sec. 83 (in former LC sec. 100 LC)

    Preliminary mandatory conciliation: No

    Remarks:
    • However, the parties can resort to extra-judicial conciliation provided it is so stipulated in a collective agreement (sec. 199/A LC).

    Competent court(s) / tribunal(s): labour court

    Remarks:
    • Labour Courts have jurisdiction in the first instance over disputes arising from the employment relationship. Appeals are heard by regular courts. (Sec. 16 of Act LXVI of 1997 on the organisation and administration of courts)

      (http://ec.europa.eu/civiljustice/jurisdiction_courts/jurisdiction_courts_hun_en.htm)

    Existing arbitration: No

    Remarks:
    • No statutory provision nor information found.

    Source of additional information - 2017    

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