Key facts of the case:
The circumstances of the case
- The applicant was born in 19... and lives in Budapest.
- The applicant, civil servant for thirty years, had been in the service of a government ministry. On 27 May 2011 she was dismissed, with effect from 28 July 2011. Her dismissal was part of a wave of similar measures throughout the entire civil service.
- On dismissal, the applicant was statutorily entitled to two months’ salary for June and July 2011 during which time she was exempted from working. In addition, she was to receive severance pay amounting to eight months’ salary in application of section 19(2) g) of Act no. XXIII of 1992 on the Status of Civil Servants, as well as to an unspecified sum corresponding to unused leave of absence.
These benefits – in so far as they did not represent compensation for unused 2011 leave of absence – were subsequently taxed at 98% in their part exceeding 3.5 million Hungarian forints (HUF). The exceeding part was HUF 2.4 million. This represented an overall tax burden of approximately 52% on the entirety of the severance, as opposed to the general personal income tax rate of 16% in the relevant period.
The tax amount in question was never disbursed to the applicant, but was withheld by the employer and directly transferred to the tax authority.
Results (sanctions) and key consequences of the case:
The Court unanimously
- Declares the complaints concerning Article 1 of Protocol No. 1, read alone and in conjunction with Articles 13 and 14 of the Convention, admissible and the remainder of the application inadmissible;
- Holds that there has been a violation of Article 1 of Protocol No. 1;
- Holds that there is no need to examine separately the complaint under Article 1 of Protocol No. 1 read in conjunction with Article 13 of the Convention;
- Holds that there is no need to examine separately the complaint under Article 1 of Protocol No. 1 read in conjunction with Article 14 of the Convention;
(a) that the respondent State is to pay the applicant, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:
(i) EUR 11,000 (eleven thousand euros), plus any tax that may be chargeable, in respect of pecuniary and non-pecuniary damage;
(ii) EUR 6,000 (six thousand euros), plus any tax that may be chargeable to the applicant, in respect of costs and expenses;
(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;
- Dismisses the remainder of the applicant’s claim for just satisfaction.
Done in English, and notified in writing on 14 May 2013, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.