Minimum requirements
An employment relationship is established through an employment contract, which serves a dual function: creating the employment relationship and defining its content. For the employment relationship to be established, the parties are only required to agree on two elements: the base salary and the job position. If the parties do not specify further terms in the contract, the provisions of the Labour Code will apply, supplementing the parties’ agreement based on the typical employment relationship. This includes assuming a fixed-term, full-time employment relationship with a set work schedule, a workplace defined as the actual location where the work is performed, and start date of work is the day following the conclusion of the employment contract.
The employment contract must be concluded in writing. Only the employee may challenge the absence of a written agreement, and this must be done within 30 days after commencing work.
Fixed-term/Open-ended Contracts
Employment contracts can be concluded for an indefinite or fixed term. By default, the Labour Code assumes indefinite-term contracts unless the parties explicitly agree to a fixed-term arrangement.
The total duration of fixed-term contracts, including any extensions or renewals, cannot exceed 5 years. This includes consecutive fixed-term contracts with breaks of less than 6 months between them. Different rules apply to non-Hungarian and non-EU employees (third-country nationals) working in Hungary under a temporary residence permit for work purposes. These employees are typically allowed to work on fixed-term contracts for up to 1 to 3 years, depending on the residence permit type, which can be extended. Terminating a fixed-term contract is more complex for employers compared to terminating an indefinite-term contract. Details are provided below at Section VIII.
Trial Period
The maximum trial period is 3 months for both fixed-term and permanent employment contracts. If the fixed-term contract is shorter than 12 months, the trial period must be determined proportionally (e.g., for a 6-month contract, the probation period may not exceed 1.5 months). For executives, the trial period can be longer if agreed upon by the parties.
During the trial period, both the employee and the employer may terminate the employment contract without notice or the need to provide reasoning.
Notice Period
If the employee terminates the contract, a 30-day notice period applies, unless a longer notice period (up to 6 months) has been agreed upon in the employment contract, during which the employee is required to continue working.
If the employer terminates the contract, the minimum notice period is 30 days, but it increases progressively based on the employee’s length of service, with a maximum of an additional 60 days after 20 years of service. The parties may agree on a more extended notice period of up to 6 months.
In case of ordinary termination by the employer, the employer must release the employee from work for at least half of the notice period.
When the employer terminates the employment, in the following cases, the earliest when the termination period can start is the day following the end of the relevant period below:
a) incapacity to work due to illness, but not later than one year after the end of sick leave
b) incapacity to work due to caring for a sick child
c) leave of absence without pay to provide home care to a relative
