Decline In Turnover As Grounds For Dismissal

Under certain circumstances, companies may decide to restructure their internal organisation in order to:

• increase efficiency;
• reduce costs; or
• focus on other areas of operation.

If a company's turnover declines and its business is suffering, it may force decision makers to reorganise its operations, which often results in redundancies.

Hungarian law generally requires employers to justify the termination of an employment relationship, and economic grounds generally serve as valid grounds for dismissal. This update provides insight into the circumstances which may constitute 'economic grounds' on the basis of recent case law.

Grounds for dismissal

Under Hungarian law, reasons for ordinary dismissal may relate to: