The New Hungarian Labour Code Enters into Force
By Boglárka Kricskovics-Béli of CLV Partners (the Hungary member of Ius Laboris)
The new Hungarian Labour Code promises a fundamental overhaul of that country's labour law. Intended to improve competitiveness and increase employment in the face of the current economic crisis, the revised Labour Code introduces new forms of employment, and significantly changes employment rules from hiring to termination.
The new Code recognizes atypical or flexible forms of employment, and expressly allows employees to work for different employers in the same position simultaneously.
Different salaries may be paid to employees of the same employer who work in different regions.
Continue Reading...Non-compete Agreement Concluded After the Severance Notification But Before the Effective End of the Employment Contract: Indemnity Exempt from Social Security Contributions
It was generally admitted that a non-compete indemnity was exempt from social security contributions only if, among other things, the non-compete agreement was concluded after the effective end of the employment contract.
The Supreme Court nuances this principle in a judgment of 19 March 2012. In this case, two agreements were concluded on the same day between an employee and his employer: on the one hand, a transactional agreement on the termination of the employment contract (after the severance notice), and on the other hand, a non-compete agreement. Parties also agreed that the employment contract would effectively end only on the second day after the conclusion of those agreements. In addition, the employment contract did not contain a non-compete clause.
The Supreme Court decided that even if paid by virtue of an agreement concluded after the severance notification, but before the effective end of the employment contract, the non-compete indemnity is not necessarily awarded because of the termination of the employment contract: it does not therefore constitute remuneration subject to social security contributions.
This ruling reduces the importance of the exact moment of the conclusion of a non-compete agreement concluded within the framework of the termination of an employment contract. In order for a non-compete indemnity to be exempted from social security contributions, such an agreement should not necessarily be concluded after the effective end of the employment contract. Note that the exemption from social security contributions always requires that the non-compete indemnity does not constitute, in reality, a veiled indemnity in lieu of notice.
Note that this judgment does not concern the validity conditions of the non-compete clause.
Significant Decisions in Workplace Law in 2010
In the last year, Canadian courts have tackled a wide range of legal issues that are relevant to employers. To keep employers up to date on developments in the law, Heenan Blaikie's national labour and employment law practice has prepared a paper entitled
"Recent Developments in Workplace Law" (pdf) which provides an overview of recent developments in employment, human rights, pensions, labour, workplace privacy, and occupational health and safety law.
Court Dismisses Employer's Claim for Breach of Fiduciary Duty against Former Employee
In Aquafor v. Whyte, Dainty and Calder, an Ontario court has held that fiduciary employees are entitled to secretly plan to set up a firm to compete against their employer, to take the employer's clients, and to immediately begin competing after resigning provided there is no improper solicitation of clients or misuse of
In this case, two professional engineers who were the "face" of their former employer, planned the launch of their own engineering firm while still employed. During non-business hours, they secretly leased space, constructed leasehold improvements and prepared a business plan. The engineers gave proper notice of their resignations and told some of their clients they were leaving. Following their resignation, the new firm immediately began competing by sending announcements through publicly available client lists and by accepting work from clients of the former employer. The employer sued alleging breach of fiduciary duty. The Court held that while active solicitation of clients before a "reasonable time" has passed is improper, covertly planning the departure while still employed, continuing to serve clients who choose to move, and immediately competing with a former employer are permissible provided there is no improper solicitation of clients and no confidential information has been misappropriated.
For more information on this case, please see
Employment Newsnotes (Issue 49, Summer 2010)
Employment Newsnotes (PDF) is an occasional publication by
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The forthcoming World Cup - issues for employers
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Prospects for employment law under the
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New
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Immigration - proposal for an annual limit on non-EU economic migrants
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Dangers for employers from professional networking websites (e.g. LinkedIn)
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Constructive dismissal - the Court of Appeal has ruled that an employer cannot 'cure' its breach of contract
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The current debate over reform of the
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Tougher sanctions for breach of data protection laws introduced last April
Significant Decisions in Labour, Employment, Human Rights, and Pension Law in 2009
In the last year, Canadian courts have tackled a wide range of legal issues that are relevant to employers. In the employment law context alone, the courts have considered the obligation of departing employees, the enforceability of non-competition covenants, and the ability of employees to commence a class action to seek damages for unpaid overtime pay.
To keep employers up to date on developments in the law, Heenan Blaikie's national labour and employment law practice has prepared a paper entitled " Recent Developments in Labour and Employment, Pension & Benefits and OHS/Workers Compensation" (pdf). The paper provides an overview of developments in the areas of employment, human rights, pensions, benefits, federal and provincial labour, workplace privacy, occupational health and safety, and workers' compensation law in 2009.
Rescission of Non-Competition Agreement
An employer can rescind a non-competition agreement at any time without giving a reason. This is possible under the condition that the agreement contains specific language providing for such right. It used to be believed that such right could only be exercised prior to the end of employment (ruling of Supreme Court of 8 February 2007; II PK 159/06). According to a recent ruling (4 February 2009; II PK 223/08), the time period to exercise this right can even extend until the expiration of the non-compete.