The Labor Code in Hungary (and in the EU) aims at protecting the rights of both the employer and the employee. It also includes how and when an employment relationship can be terminated – while immigration law governs what happens to the work permit when that happens.
Work permit during employment
The Hungarian work permit is a residence permit that lets third-country nationals live and work in Hungary based on the employment of the applicant. For the application, you already need a labor contract (or at least a preliminary agreement) between the employer and the (future) employee, and when the employment is terminated, this must be reported to the immigration office within 5 days after the termination date, upon which the work permit will be revoked.
This does not mean that the third-country national will be deported the following day. There is an unofficial grace period of about a month, during which they can try and find a new employer. In that case, they will have to apply for a new work-permit with the new employer – while they can continue to stay in Hungary. If they have family members whose residency was based on their work permit, the same unofficial grace period applies to their residency, but if the main applicant finds new employment, the family members do not have to apply for a new permit, and can continue to use the existing one.
But when can employment be terminated?
1. Termination during trial
At the beginning of the employment, there is a trial period during which the employer and the employee can decide if they are a good match. If they are not, either party can terminate the employment without notice and explanation. The length of this probation period should be indicated in the labor contract, and it cannot be longer than 3 months.
If your employee received their Hungarian residency through employment at your company, they can still quit during probation. However, if they want to stay in Hungary, they will need to find a new employer – or come up with another reason on which they can base their new residency application.
2. Ordinary termination by employer (with notice period)
After the trial period, the employer can terminate the employment only with a valid reason and clear justification. There must be a notice period that is at least 30 days long (indicated in the labor contract), during which the rights and obligations of both employer and employee still exist, but work can be required only during half of the notice period. The work permit will remain valid until the last day of employment, which includes the full length of the notice period.
3. Ordinary termination by employee (with notice period)
Just like when the employer terminates the employment, the employee can also quit anytime with the notice indicated in the labor contract. The employee must also provide justification, but more reasons are accepted. In this case, however, the employee may be required to work during the full length of the notice period, which might make finding a new job for a new work permit a little more difficult for them.
4. Mutual consent
Of course, you can terminate the employment with mutual consent of the employer and the employee any time, even without a notice period if that is what both of you want. Since you must agree on various details, this method is more flexible and more transparent than ordinary termination, which make it a preferred method in the labor market. When agreeing on termination, consider the notice period needed to properly hand over all tasks – while your employee should consider the time needed to find new employment.
5. Immediate termination
The employment can be terminated by either party if there is a serious breach of contract, either by will or by negligence, or if either the employer or the employee acts in a way that makes continuing the employment relationship impossible. If you discover a reason for this measure, you should consult a labor law specialist before taking steps to ensure you are doing the right thing.
New job for a new work permit
Whichever way the employment terminates, the employer must report the end of the employment to the immigration office within 5 days, which means the work permit will be withdrawn. If the now former employee wishes to stay in Hungary, they will need to apply for a new work permit, but that is possible only through a new employer – you as a former employer will not need to be involved.
Of course, filing for residency is also possible under a different purpose, which may be family unification (if their spouse is also working in Hungary) or business immigration (if they want to set up their own business). In either case, we are happy to help with the application. Helpers Hungary has provided business and immigration related assistance to foreigners in Hungary for more than 15 years, and we would be happy to help.
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