Termination of employment with immediate effect: Not so risky after all?

In a recent judgment (Kúria Mfv.X.10.040/2021.), the Curia confirmed two important judicial interpretations regarding the termination of employment with immediate effect.

1. The legal qualification indicated in the statement of reasons is not binding on the court, i.e. the court qualifies and judges the termination with immediate effect on the basis of the facts indicated therein [See "The practice of terminations and terminations with immediate effect in the summary report of the case-law analysis group", p. 27].  

2. Previously communicated written warnings may also be taken into account to justify several minor breaches.

Both statements are in principle favorable to the party wishing to terminate the employment with immediate effect.

In the case reviewed by the Curia, the employment of a teacher working in a church school was terminated with immediate effect. The reasons for the termination were that the employee's repeated breaches of duty (disrespectful tone) had led to a loss of confidence on the employer’s side, which made it impossible to maintain the employmentrelationship. The dismissal also recorded as a precedent that the employee had previously received several written warnings for his inadequate communication. The termination notice referred to both Article 78(1)(a) and (b) of the Labour Code as the legal basis for the termination of the employmentrelationship.

The unanimous opinion of the courts in the case is that what matters is not whether the reasoning for the termination with immediate effect refers to Article 78 (1) (a) or (b) of the Labour Code but whether the facts stated in the reasoning justified the unilateral termination of the employmentrelationship. In the case at issue, the fact that the termination statement referred to both possible grounds for termination, even though it relied on the facts relating to only one of them, did not render it unlawful.

The case also confirmed that in most cases, communication in a disrespectful tone is not in itself a serious enough breach of duty to justify immediate dismissal. However, if an employee repeatedly communicates in a disrespectful manner with his or her superiors, this may be a legitimate basis for immediate dismissal as a series of minor breaches of duty, even if the employee has already received a written warning for the previous breaches and the employer exercises its right to dismiss following a further incident.

Both interpretations increase the certainty of the party exercising the right to terminate, because if the termination is justified on the facts, the party does not have to fear that the termination will be unlawful because the reason for termination was not properly qualified. Nor should the employer fear that it would waive its right to terminate in any event by giving a written warning earlier.

It is also important to see, however, that such a prominent role of the facts means that the legality of the termination declaration depends on the accurate statement of the real and provable facts. Particular care must therefore continue to be taken to ensure that the facts on which the termination is based are fully ascertained and that the individual circumstances are properly assessed and accurately stated.