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Do Not Act out of Habit - the New Provisions on Probation Period

Do Not Act out of Habit - the New Provisions on Probation Period

Hungary
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Although probation may be one of the most well-known legal institutes of the Labour Code and is a standard element of the employment agreements, the latest amendment of the Labour Code will make the parties pay more attention to their related statements.

As of 1 January 2023, the general rule on the duration of the probation period (3 - months or – in the case of a collective bargaining agreement - 6 months) has been amended and it must be established proportionally, if an employment agreement is concluded for a fixed period, with a maximum of twelve months. In the case of renewal of a fixed-term employment agreement or its re-establishment within six months of its termination, no probation period can be included in the agreement if the employee is employed in the same or similar position as previously as in such case probation period would not serve its true purpose.

The general rule that no reasoning is required for the termination handed over during the probation period is no longer true as the employee is entitled to request reasoning in 15 days – and the employer must respond in also 15 days – if the employee is of the opinion that the real reason for the termination was the use of so-called carer's leave, paternity leave, parental leave or unpaid leave to care for a child. The Labour Code lists two other cases as well, however, as the employee is not entitled to request those in the first six months of the employment relationship, those are only applicable if it is explicitly stated in the collective bargaining agreement or other internal regulations.

It is also important that the new rules also make some specific concessions on delivery, namely, the notice of termination with immediate effect during the probation period is still timely if it is posted on the last day of the probation period. If the employee requests reasoning, as set out above, the 15-day deadline for doing so is deemed to have been met even if the request is posted on the last day of the probation period and the same applies to the employer's 15-day deadline for responding.

Based on the above, the conclusion is that transposing the EU directives 2019/1152 and 2019/1158 has made the working conditions in Hungary more transparent and predictable and made a step forward to achieving better work-life balance.

By Borbala Maglai, Attorney at Law, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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