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Employment Contracts in Hungary

1. Minimum Requirements

In Hungary, the conclusion of an employment contract is a pre-requisite to enter into an employment relationship. It is the employer’s obligation to set forth any employment contract in writing. The employer’s failure to comply will render the employment contract invalid upon the employee’s claim, made within 30 days from his entering work.

Substance-related requirements and guidelines:

The parties of the employment contract must agree on both the personal base wage and the position of the employee – these terms are essential under Hungarian labour law.

It is worth noting that the competent Hungarian labour supervisory authority is authorised to carry out inspections as to whether the mandatory formalities and the major substance-related requirements have been complied with in course of concluding an employment contract.

Substance-related requirements and guidelines:

The parties of the employment contract must agree by all means on both the personal base wage and the position of the employee – these terms are essential under Hungarian labour law.

It is not essential for the parties to set the place of work and the duration of the employment contract as well as the starting date of the employment relationship (lack of agreement on these issues will not affect the validity of the employment contract and relationship). If the parties fail to provide for the place of work, the place where the employee regularly performs his work shall qualify as the place of work.

Besides the essential and mandatory elements discussed above, the parties may set out any other terms they wish to provide for in the employment contract. The only thing the parties need to be aware of: such terms may not be in violation of statutory labour law.

2. Fixed-term/Open-ended Contracts

As long as the parties do not provide the terms of the employment contract, it is deemed an indefinite employment relationship. Should the parties wish to establish an employment relationship for a definite time period, this must be specifically set in the employment contract. The terms of fixed-term employment relationships may not exceed 5 years.

3. Trial Period

The parties may set forth in the contract a trial period of a maximum of three months commencing at the start of employment. If the parties agreed on a shorter trial period, they are entitled to agree (only once) to extend the trial period to a maximum of three months.

4. Notice Period

The notice period is 30 days. In case of termination by the employer, the notice period is extended with 5 days of additional notice period after 3 years of employment, with 15 days after 5 years of employment, with 20 days after 8 years of employment, etc.

The parties may agree to a longer notice period, which can be a maximum of six months (which includes any additional notice period as well).

For more information, please contact L&E Global.
This entry was posted in Employment Contracts on and modified on .