The coronavirus epidemic, which also affects Hungary, has a significant impact on the economy, including jobs. Several companies were forced to shut down, lost revenue and had to carry out a forced divorce from employees. In our article, we present the rules of collective redundancy.
The Hungarian Labour Code specifies when a larger redundancy qualifies as a collective redundancy. According to this, the average statistical headcount calculated for the six months’ period preceding the employer’s decision must be taken into account. If the headcount is between 20 and 99 employees, then the threshold is 10 employees, between 100-300 employees it is 10% and it is 30 employees in case of employers with more than 300 employees. So if the number of layoffs within a period of 30 days, for the same reason, is higher, rules of collective redundancy shall apply. This threshold shall be observed for each site individually, save for sites located in the same county or in Budapest; the headcount of these sites shall be aggregated. The employee must be accounted for the site where he works according to his schedule in effect at the time of the decision of the employer.
The most important criterion for such redundancy is that the employer is obliged to negotiate with the works council already while planning the downsizing. The works council must be informed at least 7 days before the start of negotiations about the reason of the redundancy, the number of employees affected by the planned redundancies, the planned duration, time schedule, selection criteria and the conditions and amount of termination benefits. The employer is also obliged to inform the state employment service about this and to provide a copy of this notice to the works council. The employer shall then negotiate with the works council until an agreement is reached or otherwise for at least 15 days.
During the negotiations, the parties must address the possible ways, means, principles and measures to mitigate or avoid redundancies and to reduce the number of employees concerned. The decision made at the hearing must be recorded in writing and sent to the public employment service. The decision to implement a collective redundancy shall specify the number of employees affected by the measure, broken down by categories of employees, as well as the starting and ending dates or the timeline of carrying out the collective redundancies. Such timeline shall be determined on the basis of thirty-day periods.
In addition to the above, the public employment service must be informed 30 days prior to the termination of the personal data, job titles and qualifications of the employees concerned. The employer is obliged to inform the employee in writing of his decision on collective redundancies 30 days before the termination. Any termination may be communicated only thirty days after such notification. Failure to provide this information will render the termination unlawful.
In addition, collective redundancies must comply with the general rules on termination. The reason for termination must be clear and reasonable, and the employment of workers under protection may not be terminated even by collective redundancies.
Particular care should be taken as non-compliance with the above provisions may result in fines. In case the state body is not or is not properly informed by the employer, a fine of up to HUF 500,000 may be imposed on them.