Background

Almost two years ago, the amendment to Act I of 2012 on the Labour Code (“Labour Code”) caused a big stir, according to which an employee who is unfit for work due to health reasons is exempted from his obligation to work and be available for work and is (was) not entitled to an absentee pay, and at the same time lost his/her insured status.

Since the above amendment meant that employers did not have to pay remuneration to employees who were unfit for work and did not work, employers often did nothing, leaving the employee in a kind of dependency situation.

A further reason for the employer’s passivity was that in the event of termination by the employer based on the employee’s unfitness for work, the employee – if further conditions are met – is entitled to a longer period of notice and severance pay. Employers were therefore not interested in terminating the employment of such an employee. The employee was, of course, given the option of terminating his employment, but in this case, he forfeited the longer notice period, and the amount of severance pay.

Decision of the Constitutional Court of Hungary

In view of the discriminatory and unconstitutional nature of the above provisions, the Constitutional Court was asked to review the provision in a court case concerning the above provisions.

As a result, the Constitutional Court found the provision to be unconstitutional and ordered its annulment. According to the decision, the provision of the Labour Code in question was repealed as of 28 February 2025.

This means that if the employee is unfit for the job for health reasons, the employer’s general employment obligation remains unchanged and if it is not fulfilled (downtime), the employee is entitled to his basic salary.

Employer responsibilities

It can be seen from the above that if an employee is or becomes unfit for the job, he cannot actually be employed in that position, but must be paid the basic salary, subject to the employer’s employment obligations.
In general, there are two ways to resolve this situation:

the employee’s employment may be terminated by the employer on the grounds of the employee’s unfitness for work, in which case the employee may be entitled to longer notice period and severance pay;
the employee may be offered another position within the organization, taking into account the employee’s medical condition and with the employee’s consent.

It is important to underline that employers will not only have to deal with employees who become unfit in the future, but also with employees who are already “in a dependency situation”. The most appropriate solution in each case shall always be considered on a case-by-case basis and will be influenced by a number of other circumstances.

For further inquiries, please feel free to contact us at info@clvpartners.com.

Anna Katalin Papp, LL.M.

CLVPartners

http://clvpartners.com