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Employee Rights When an Undertaking is Transferred in Hungary

1. Employees’ Rights

The new employer is not allowed to terminate the employee’s employment relationship by notice by relying on the fact of the transfer of the undertaking.

The Labour Code expressly affords the employee the opportunity to terminate his/her employment relationship by notice in such event, thereby the employee will be entitled to the same emoluments due in case of the employer’s termination of the employment relationship by notice (e.g. severance payment).

The employee is obliged to justify his/her decision by supporting the legal grounds enumerated above.

2. Requirements for Predecessor and Successor Parties

Prior to the effective date of the transfer of an undertaking the previous employer must inform the new employer about the rights and obligations attached to the employment relationships affected by the undertaking’s transfer. Both the old and the new employer must inform the works council 15 days prior to the transfer‘s date at the latest about the intended transfer. Simultaneously, both employers must engage in negotiations with the worker’s council concerning all the measures pertinent to the employees. If no works council operates at the employer, the employees themselves must be notified in writing accordingly.

The works council actually has a preliminary consultancy right, meaning that the works council’s views on the transfer must be requested prior to the employer’s resolutions therein.

For more information, please contact L&E Global.
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