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Hungary

Background information on industrial relations in Hungary

• 19 Dec 2006
  Hungary: Trade unions reject stringent EU convergence programme

  In line with the requirements of European Union membership, Hungary must submit convergence programmes to the EU each year which should present how the country envisages meeting the Maastricht criteria. On 1 September 2006, the re-elected government submitted a revised convergence programme reflecting its new strategic plan. It sets out an extensive reform programme, targeting primarily the public sector, and with increases in tax and social contributions, which represent a further burden for the private sector. When preparing the programme, the government announced strict economic measures to redress budget imbalances. While social partners, in general, accepted the need to correct budget imbalances, each side formed a different critical outlook on the package, with the trade unions rejecting it.

• 19 Dec 2006
  Hungary: Government launches support scheme for redundant public sector employees

  The government has introduced a support scheme to help younger public sector employees to find jobs in the private sector; the scheme also eases the situation faced by redundant older employees. This scheme has been introduced in light of the recent modification of legislation on public sector employment, making the dismissal of public sector employees easier and cheaper for employers. Meanwhile, the trade unions have responded to the government measures aimed at eliminating the state budget deficit and reforming the public sector.

• 18 Dec 2006
  Hungary: Trade union protests against government austerity measures

  In October 2006, sectoral unions affiliated to the Democratic League of Independent Trade Unions (LIGA) staged protests against the government’s austerity measures, which are aimed at eliminating the substantial budget deficit. In the already divided Hungarian trade union scene, the protests have further intensified political divisions among the unions. At the same time, they have increased the pressure on the government to alleviate the stringent economic measures outlined in its convergence programme.

• 18 Dec 2006
  Hungary: Protest and political crisis mark launch of government’s convergence programme

  In the context of heated political debate over Hungary’s new convergence programme and the strict economic measures introduced by the re-elected socialist–liberal government, a leaked prime ministerial speech on 17 September 2006 proved highly contentious. In the speech, delivered to a closed session of socialist members of parliament in May 2006, the prime minister acknowledged that he had lied about the state of the economy and that he failed to reveal to voters the full scale of the forthcoming austerity package prior to the April general elections. The speech led to unprecedented political tensions in Hungary, accompanied by mass rallies and street violence. In the aftermath, it appears that trade unions and employers are in a stronger bargaining position: in return for ensuring social peace and providing political support for the convergence programme, they may be able to call for compromises from the government.

• 18 Dec 2006
  Hungary: New company act reduces role of board-level employee representatives

  On 1 July 2006, Act IV on Business Associations came into effect in Hungary. The act has brought about several changes concerning the setting up and running of various types of businesses. A unique aspect of the new legislation is its introduction of the option of one-tier corporate governance; the act also introduces changes to employees’ mandatory representation in supervisory boards. The amendments underline the increasing signs of deregulation that are emerging both in the one-tier system and in board-level representation.

• 14 Dec 2006
  Hungary: Social partners evaluate role of mediation and arbitration service

  At an international conference marking the tenth anniversary of the Hungarian Labour Mediation and Arbitration Service (MKDSZ), the social partners voiced their opinions and expectations of the service. It emerged that employers are interested in reducing the costs of labour disputes, while trade unions consider that the future role of the MKDSZ should be to prevent disputes. Both parties also highlighted obstacles to conflict resolution through mediation.

• 07 Dec 2006
  Hungary: Reform in public sector threatens job security

  New legislation passed in July 2006 has aided the government in its attempt to streamline public administration and to reduce the budget deficit. In effect, the amendments will make the dismissal of public service employees easier and cheaper for the employer, while at the same time providing greater support to laid-off employees. Although the trade unions initially criticised the government’s measures, an agreement was eventually reached about the implementation of the reforms in public administration.

• 23 Oct 2006
  Hungary: Employers seek renegotiation of two sectoral collective agreements

  Hungarian employers have been requesting the renegotiation of two of the four extended sectoral collective agreements, for the electricity and bakery sectors. In the context of a decentralised bargaining system and the dominance of small and medium-sized enterprises (SMEs) in the labour market, the extension of agreements by decree of the Minister of Social Affairs and Labour is a vitally important instrument for broadening the scope of existing sectoral collective agreements, especially in industries in which SMEs prevail.

• 19 Sep 2006
  Hungary: Workers’ assembly at GM-Opel plant

  Opel, the German based subsidiary of General Motors (GM), recently announced the closure of its Azambuja plant, north of Lisbon, Portugal. Worker representatives at the company fear that the plant closure is the first of a series of rationalisation measures aimed at cutting excess capacity and reorganising Opel’s manufacturing activities. Such measures could result in 30,000 job losses across Europe, primarily affecting production capacity in the former EU15 Member States. On 23 June 2006, a workers’ assembly was held at the Szentgotthárd plant, Hungary, serving both as a solidarity action and as an opportunity for acquiring information on the reorganisation of GM-Opel on a European scale.

• 19 Sep 2006
  Hungary: Employer organisations critical of tax increases

  The government’s recent austere tax measures and reforms of public spending responded, to a certain extent, to the manifesto of the business community. Nevertheless, the actual content of the government package did not meet with the wholehearted approval of the employer organisations.

• 19 Sep 2006
  Hungary: Impact of government reform and tax measures

  The re-elected government has announced a comprehensive package of austere tax measures and reform proposals to redress budget imbalances and to prepare the path towards European Economic and Monetary Union (EMU). The initiative includes state and local public sector reforms, as well as reforms in healthcare, education and public transport. A range of taxes will be increased, and energy and transport costs will also rise. However, concerns have been raised about whether the reforms will be successful in the long term; moreover, the severity of the measures will challenge the position of the trade unions and of employers.

• 12 Sep 2006
  Hungary: Trade unions clash with new government over tough economic programme

  Despite the newly re-elected government’s support for social dialogue, its proposed new austere economic measures have met with a hostile response from the trade union side. The new economic measures, which are aimed at eliminating the substantial budget deficit, include proposals to increase value-added tax on consumer goods and wage levies, in addition to a programme to reform key sectors of the public administration and its services.

• 06 Sep 2006
  Hungary: Annual wage negotiations spark wave of warning strikes

  In the spring of 2006, trade unions representing employees in a number of Hungarian companies threatened to take strike action or staged warning strikes, largely in response to the annual wage negotiations. The increased threat of strike action takes place in the context of Hungary’s decentralised collective bargaining system, where local unions, sometimes with the support of sectoral unions, often try to make uniform wage demands; management, on the other hand, often refuses these demands, pointing to the particular economic conditions of the company or organisation.

• 11 Jul 2006
  Hungary: Employers call for new social pact to bolster economy

  Following the general elections in April 2006, 16 business and employer organisations issued a manifesto entitled ‘Agreement for our future’. The manifesto calls for a tripartite agreement between businesses, the government and political parties on four key issues affecting Hungary’s economic competitiveness. However, there were mixed reactions among the social partners to the document.

• 27 Jun 2006
  Hungary: Wage agreement signed at Paks Nuclear Power Plant

  Following the conclusion of a sectoral agreement, and lengthy negotiations and industrial action at Paks Nuclear Power Plant, the representative trade unions and management signed a company-level agreement on the annual wage increase at the end of March 2006.

• 21 Apr 2006
  Hungary: Renewed tensions at Suzuki car assembly plant

  In January 2006, the Democratic League of Independent Trade Unions (LIGA) established a union at the Suzuki plant, which protested against breaches in Labour Code working time regulations, and demanded higher wages and better working conditions. The company’s management refused to recognise the union and dismissed the union leader. In response, the Prime Minister refused to participate in the ceremony to launch the plant’s new car model, and called on the company to respect the right to freedom of association of employees.

• 01 Mar 2006
  Hungary: Draft laws on national and sectoral social dialogue submitted to parliament

  In February 2006, the Hungarian government submitted to parliament bills on the tripartite National Interest Reconciliation Council, the sectoral social dialogue committees and other aspects of social dialogue. The drafts, which have been endorsed by the social partners, give the operation of the various forums a legal basis and lay down criteria for trade union and employers' organisations to participate in the dialogue.

• 25 Jan 2006
  Hungary: New conflict of lawsrules introduced

  Hungary officially harmonised its law with the Rome Convention with respect to individual employment contracts in 2001. However, the wording of the Hungarian rules on which law applies where both the employer and the employee are Hungarian but the habitual place of work is another country has led to some controversy and debatable rulings by the courts. New legislation that came into force on 1 January 2006 aims to remedy this problem.

• 11 Jan 2006
  Hungary: Wage agreements in the public sector for 2006

  Following the central wage agreement for 2006 in December, a series of agreements have been concluded on public employees’ salaries.

• 11 Jan 2006
  Hungary: Sectoral collective agreement signed in the construction industry

  Three employers’ associations and two trade union federations in the industry signed the sectoral collective agreement on 16 November 2005. The agreement, which includes a wage tariff system as well, will come into force when the Minister of Employment and Labour promulgates his decision on extension.

• 11 Jan 2006
  Hungary: New governmental guideline on bogus contracts

  The Minister of Employment and Labour and the Minister of Finance jointly issued a new guideline on the qualification of contracts for work performance

• 10 Jan 2006
  Hungary: Three-year central agreement reached on minimum wage rises and pay policy guidelines

  In late November 2005, the Hungarian social partners and government agreed on new minimum wage rates, the gradual introduction of a three-tier minimum wage system, and recommendations to lower-level negotiators on annual wage increases. The agreement includes not only increases and recommendations for 2006 but also a medium-term plan for minimum wage increases and pay policy guidelines over 2006-8.