In Hungary, it is sometimes hard to decide whether the employment contract or civil law contract would be better for the parties. As the financial burdens of employment are higher, it is tempting for both parties to engage using a civil law contract. However, if there is a dispute (typically in case of a termination) the independent contractor is also tempted by the possibility to raise claims under employment law due to the higher protection provided to employees. As the re-characterisation may incur severe sanctions, parties must be very careful when deciding which contract to use. The factors that have been developed by the Hungarian courts may help them to make the right choice.
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