Living and working in Hungary

18 October 2017

  •   Population: 9.8 million (2017)
  •   Real GDP growth: 2.2% (2016)
  •   Unemployment rate: 5.1% (2016)

Data source: Eurostat

Eurofound provides research, data and analysis on a wide range of social and work-related topics. This information is largely comparative, but also offers country-specific information for each of the 28 EU Member States. Most information is available in English but some has been translated to facilitate access at national level.

Eurofound strives to strengthen the ongoing link between its own work and national policy debates and priorities related to quality of life and work. Increasingly important in this context is the Europe 2020 growth and jobs strategy launched in 2010, which has five headline targets, covering employment through to social inclusion and poverty reduction. The strategy is implemented in the context of the European Semester process – the EU's annual cycle of economic policy guidance and surveillance – which ensures that Member States keep their budgetary and economic policies in line with their EU commitments through, in part, National Reform Programmes. These programmes form the basis for the European Commission's proposals for country-specific recommendations (CSRs) for each Member State.

European Commission: The European Semester
European Commission: The European Semester - EU country-specific recommendations
European Commission: European Semester documents for Hungary

2015 Eurofound EWCS survey results in Hungary: 81% of people think their safety is not at risk because of their work

Survey results

Satisfaction with quality of life
Data source: 2012 EQLS survey

Ability to choose or change
methods of work

Data source: 2015 EWCS survey

Possibility to accumulate overtime
for days off

Data source: 2013 ECS survey

News and quarterly country updates

Latest news on Hungary working life

Quaterly overwievs

Eurofound contacts in Hungary

Correspondents in Hungary

Correspondents report on topics related to developments in the countries working life and inform Eurofound’s pan-European comparative analysis. Read more

Policy Agenda Kft.

Eurofound governing board members from Hungary

Eurofound's Governing Board represents the social partners and national governments of all Member States, as well as the European Commission. Read more

Katalin Kissné Bencze Ministry for National Economy

Antal Csuport National Association of Strategic and Public Utility Companies (STRATOS)

Melinda Kelemen Democratic League of Independent Trade Unions (LIGA)

Related content

Other country-specific information may be available in certain areas on demand. Please feel free to contact your country contact at Eurofound for this or any other information at information@eurofound.europa.eu

Working life in Hungary

About

  • Author: Ambrus Kiss, Pál Belyó, Annamária Kunert, Máté Komiljovics and Károly György
  • Institution: Policy Agenda

This profile describes the key characteristics of working life in Hungary. It aims to complement other EurWORK research by providing the relevant background information on the structures, institutions and relevant regulations regarding working life. This includes indicators, data and regulatory systems on the following aspects: actors and institutions, collective and individual employment relations, health and well-being, pay, working time, skills and training, and equality and non-discrimination at work. The profiles are updated annually.

Key figures

Key figures

Comparative figures on working life in Hungary

 

2011

2016

% (point) change
2011–2016

Hungary

EU28

Hungary

EU28

Hungary

EU28

GDP per capita

10000

25800

11200

26900

12.0%

4.3%

Unemployment rate – total

11.0

9.7

5.1

8.5

-5.9

-1.2

Unemployment rate – women

11.0

9.8

5.1

8.7

-5.9

-1.1

Unemployment rate – men

11.1

9.6

5.1

8.4

-6.0

-1.2

Unemployment rate – youth

26.0

21.7

12.9

18.7

-13.1

-3.0

Employment rate – total

62.4

71.1

70.1

73.0

7.7

1.9

Employment rate – women

56.6

64.8

63.5

67.4

6.9

2.6

Employment rate – men

68.4

77.5

76.9

78.6

8.5

1.1

Employment rate – youth

24.3

42.5

32.3

41.6

8.0

-0.9

Source: Eurostat - Real GDP per capita (chain linked volumes [2010], in EUR) and percentage change 2011-2016 (both based on tsdec100). Unemployment rate by sex and age - annual average, % [une_rt_a]; Employment rate by sex and age - annual average, % [lfsi_emp_a].

Background

Background

Economic and labour market context

Between 2011 and 2016, Hungarian GDP enjoyed robust growth (12.0%), well above the EU average increase for the same period (4.3%). During this time, unemployment rates decreased for all categories, in particular for young people (-13.1 percentage points), for whom the unemployment rate stood at 12.9% in 2016, below the EU average of 18.7% for that year. Employment rates also increased substantially for the period; total employment stood at 70.1% in 2016, having increased by 7.7 percentage points over five years. The biggest increase was in the male employment rate (+8.5 percentage points). Youth employment grew 8.0 percentage points between 2011 and 2016, when it reached 32.3% but remained below the EU average for that year (41.6%). 

More information on:

Legal context

The overall legal framework was fundamentally revised in 2011–2012, a process completed by the new Civil Code (Act V of 2013) which came into force in March 2014. Act I of 2012 on the Labour Code ( 2012. évi I. törvény a munka törvénykönyvéről ) regulates employment and labour issues in the private sector.

The legal framework of industrial relations has also been profoundly changed, primarily by transforming the institutions of national consultation and negotiation, and by revising the role of and rules on collective bargaining as part of the new Labour Code.

The right to and conduct of strikes is regulated by Act VII of 1989 (1 989. évi VII. törvény a sztrájkról) which was also significantly amended in 2010 and 2012.

Not enough time has yet passed to make it possible to evaluate the effects of all these legislative changes.

Industrial relations context

Over the past two decades Hungarian industrial relations have altered gradually from strong national tripartite cooperation to limited consultation only; from considerable collective bargaining coverage to a rather low and uneven ratio; from new structures (like works councils, sectoral dialogue committees, regional tripartite bodies) to less and weaker institutions. Meanwhile social partners have been struggling to keep their members and their role in the economy and society. Governments have always had a significant political role in forming industrial relations, not only by setting the legal framework, but also as a partner more or less committed to work together with social partners, counting also on their autonomous contribution.

In the early 1990s, the then Labour Code (Act XXII of 1992) established a special co-existence of works councils (for participation) and trade unions (for collective bargaining) at workplaces. They functioned in a special interdependence until 2012 when the new Labour Code (Act I of 2012) reshuffled their roles and powers while keeping their parallel presence, bringing about tangible changes in workplace relations.

In 2004 bipartite sectoral dialogue committees were introduced to address the weakest link of the industrial relations system, although there was no tradition of bipartite social partnership. Currently, they exist in 30 sectors/subsectors and are mainly engaged in discussing sector-related issues. Despite their well-developed legal and institutional framework, the main terrain of collective bargaining remains the enterprise level.

For many years, the National Interest Reconciliation Council ( Országos Érdekegyeztető Tanács, OÉT – also under different names) provided a tripartite framework whose powers were virtually unchanged. Not only the annual agreement on mandatory minimum wages and the recommendations on general wage-increases were concluded here, but the parties also negotiated about various economic issues. The Orbán Government dissolved this central body in 2010, and replaced it with multipartite/tripartite structures with much more limited roles.

Actors and institutions

Actors and institutions

Trade unions, employers’ organisations and public institutions play a key role in the governance of the employment relationship, working conditions and industrial relations structures. They are interlocking parts in a multilevel system of governance that includes the European, national, sectoral, regional (provincial or local) and company levels. This section looks into the main actors and institutions and their role in Hungary.

Public authorities involved in regulating working life

The key ministries regulating working life are the Ministry for National Economy (Nemzetgazdasági Minisztérium, NGM); the State Secretariat for Vocational Training and Labour Market (formerly the State Secretariat for Employment Policy); the Ministry of the Interior (Belügyminisztérium, BM); and the Deputy State Secretariat for Public Works Programmes and Water Management.

NGM has overall responsibility for employment and labour market policy and strategy. NGM prepares the draft laws related to the world of work in general (including labour legislation and setting the legal framework for industrial relations and social dialogue). NGM represents the Government in national tripartite and multipartite dialogue.

BM has a specific role in setting the legal and financial framework for public works programmes as well as managing them involving the local governments.

The Administrative and Labour Courts are courts of first instance. They work with the Labour Arbitration and Mediation Service (Munkaügyi Közvetítői és Döntőbírói Szolgálat, MKDSZ) and the National Labour Office – Labour and OSH Inspectorate (Nemzeti Munkaügyi Hivatal – Munkavédelmi és Munkaügyi Igazgatóság, NMI MMH).

MKDSZ and the Labour and OSH Inspectorate are part of the National Labour Office (Nemzeti Munkaügyi Hivatal, NMH), and thus part of the national Public Employment Service (overseen by NGM). Further to the labour and health and safety inspectorates and the employment service-related functions, NMH manages the administration of vocational education and training as well as adult training. NMH supports and manages the sectoral social dialogue committees (ágazati párbeszéd bizottság, ÁPB), through its special unit, the Centre for Social Dialogue (Társadalmi Párbeszéd Központ, TPK)

Representativeness

Representativeness of social partners at national level is not explicitly incorporated in Hungarian legislation. Nevertheless, the law on the main national civil dialogue body, the National Economic and Social Council (Nemzeti Gazdasági és Társadalmi Tanács, NGTT) stipulates detailed criteria for the social partners’ participation in the NGTT. This is widely considered to function as a sort of representativeness criteria at national level.

NGTT was established by Act XCIII of 2011. The members of NGTT include six trade union confederations and nine employers’ organisations. Other members are listed in the relevant tables below, representing the national chambers, the foreign chambers which operate in Hungary, science experts and historic churches. Union and employer confederations are invited to participate in NGTT (according to Article 9) if they meet the following set of criteria:

For unions, if they have:

  • a member organisation in at least four economic sectors and at least 12 subsectors;
  • a member organisation in at least eight counties (or its member organisations have regional organisations);
  • plant organisations at a minimum of 150 employers;
  • affiliation to the European Trade Union Confederation (ETUC).

For employers, if they have:

  • a member organisation in at least two economic sectors and at least six subsectors;
  • member organisations in at least ten counties;
  • affiliated members or member organisations representing at least 1,000 companies or companies employing altogether 100,000 employees;
  • affiliation to a European employer organisation.

In the main tripartite social dialogue body, the Permanent Consultative Forum of the Private Sector and the Government (Versenyszféra és a Kormány Állandó Konzultációs Fóruma, VKF), no representativeness criteria is applied. VKF is based on an agreement, which does not refer to representativeness, but provides the list of social partners involved, based on the parties’ mutual recognition. Three trade union confederations (LIGA, MOSZ, MSZOSZ) and three employer organisations (ÁFEOSZ, MGYSZ, VOSZ) participate in VKF, all of them are members of NGTT as well.

More information on representativeness of the main social partner organisations can be found in Eurofound’s representativeness study of the cross-industry social partners or in Eurofound’s sectoral representativeness studies.

Trade unions

About trade union representation

According to the Labour Code (Act I of 2012), every worker has the right to join a trade union in order to promote his/her economic and social interests, or not join a union (Art. 231). The detailed rules how this right can be exercised is stipulated by Act CLXXV of 2011 on the right of association, the status of general public benefit, and on the functioning and support of civil organisation; Act CLXXXI of 2011 on the registration of civil organisations and the related administrative procedure; and by the new Civil Code (Act V of 2013). Public sector employees also have the right to organise, but their right of collective bargaining is limited (for public employees) or is absent (for civil servants in public administration).

The unionisation rate is around 10%. Workplace trade unions are affiliated to various sectoral or regional federations, and through them (or sometimes directly) to six national trade union confederations. Pluralisation appears also in workplaces.

The new Labour Code (Act I of 2012) amended the rules on collective labour law, including modifying the right to collective bargaining at company and higher level.

No information is available on the effect of the above legal modifications on the unionisation rate, but presumably it has not changed the confederations’ relative weight, or the national unionisation rate. Nor is there information about how the new collective labour law has affected the national collective bargaining coverage, since the last available administrative data are from 2010 (at that time the coverage ratio was 23%, which corresponds to the data of ECS 2013.)

According to the new Labour Code, works councils also have the right to negotiate and agree on the regulation of working conditions (except wages, or wage-related issues), if the employer has not yet concluded a collective agreement, or if there is no trade union eligible to conclude a collective agreement at the given employer (Art. 268 Sec 1). An agreement concluded in this way is called a plant agreement. A plant agreement with this wider content is, however, not considered to be a collective agreement and is beyond the scope of mandatory reporting, even though parties may negotiate as for collective bargaining over the normative content (for instance, parties can agree on a longer working time reference period or more annual overtime). Since there is no obligation to report on plant agreements to the Ministry, no information is available on the number and content of this type of agreement in effect.

Trade union membership and trade union density

 

2010

2011

2012

2013

2014

2015

Source

Trade union density in terms of active employees

12.5%

11.4%

10.6%

11.3%

no data

9%

OECD/Visser (2014), Hungarian Central Statistical Office (2015 )

Trade union membership in 1000s

420

410

380

360

no data

351

OECD/Visser (2014), Hungarian Central Statistical Office (2015)

Main trade union confederations and federations

There are six trade union confederations at national level, all affiliated to ETUC.

Formerly all of them acted on the worker side of the National Interest Reconciliation Council (Országos Érdekegyeztető Tanács, OÉT). Since 2011, all are members of the multipartite civil dialogue forum, the NGTT, while only LIGA, MOSZ and MSZOSZ participate in the VKF, the tripartite national body for the private sector.

Regarding membership, MSZOSZ was still the largest national organisation in 2012 (when the latest comparative data are available), when it had 186,000 members (125,000 active).

The effect of the new Labour Code, the decline of social dialogue in general, the unfavourable political climate and a long-standing need for integration has begun a merger process among some national trade union confederations since 2013. The Alliance of Autonomous Trade Unions (Autonóm Szakszervezeti Szövetség, ASZSZ), Forum for the Co-operations of Trade Unions (Szakszervezetek Együttműködési Fóruma, SZEF) and National Confederation of Hungarian Trade Unions (Magyar Szakszervezetek Országos Szövetsége) announced their integration on 1 May 2013. The plan was to create a new confederation – and this was accomplished – but the process took longer than planned and in the meantime the Forum for the Co-operations of Trade Unions stepped back. At present, the new confederation is operating as the Hungarian Trade Union Confederation (Magyar Szakszervezeti Szövetség, MASZSZ).

National trade union confederations are not directly involved in collective bargaining in the traditional understanding of the term, in a bipartite manner. They are, however, involved in tripartite negotiations on the minimum wage and wage recommendation in the framework of VKF, as indicated in the table below.

Main trade union confederations and federations

Long name

Abbreviation

Members (2016)

Involved in collective bargaining

Hungarian Trade Union Confederation (Magyar Szakszervezeti Szövetség)

MASZSZ

115,000

Yes (if tripartite consultation on the minimum wage and negotiation on wage increases in the framework of VKF is considered as collective bargaining)

Forum for the Co-operation of Trade Unions (Szakszervezetek Együttműködési Fóruma)

SZEF

92,000

No

Confederation of Unions of Professionals (Értelmiségi Szakszervezeti Tömörülés)

ÉSZT

52,300

No

National Confederation of Workers’ Councils (Munkástanácsok Országos Szövetsége)

MOSZ

50,000

Yes (if tripartite consultation on the minimum wage and negotiation on wage increases in the framework of VKF is considered as collective bargaining)

Democratic League of Independent Trade Unions (Független Szakszervezetek Demokratikus Ligája)

LIGA

112,000

Yes (if tripartite consultation on the minimum wage and negotiation on wage increases in the framework of VKF is considered as collective bargaining)

In 2014, two confederations – the Autonomous Trade Union Confederation (Autonóm Szakszervezetek Szövetsége) and National Confederation of Hungarian Trade Unions (Magyar Szakszervezetek Országos Szövetsége) – announced their intention to merge by establishing the Hungarian Trade Union Confederation (Magyar Szakszervezeti Szövetség, MASZSZ), creating in effect the country’s biggest confederation. Based on their announcement, the new organisation would have approximately 115,000 members (active employees) and intends to represent unity and solidarity in the trade union movement.

Employers’ organisations

About employers’ representation

Affiliation to employer organisations is voluntary.

At national level, nine employer organisations play a role – they were also the members of the employer side of the former OÉT. Due to historical reasons, some of them are actually sectoral organisations, which are active both at national and sectoral level.

The elimination of OÉT created a serious challenge for employer organisations, since for many of them the main function of the body was to take part in national social dialogue and it had the expertise, staff and infrastructure to do this. Furthermore, being a member of OÉT was an additional reason for members when deciding to affiliate to the given employer organisation. Similarly to trade union confederations, only three national employer confederations (please see below) are members of VKF, while all nine organisations participate in NGTT.

Since 1 January 2012, companies and entrepreneurs have to register at the relevant economic chamber to comply with Act CXXI of 1999 (as modified by Act CLVI of 2011). This mandatory registration costs 5000 HUF (around €16) annual registration fee, but does not provide the same rights and obligations as those of full members of chambers. Employer organisations were hostile to the mandatory registration, since it does not give companies any benefit and could simply be considered as a tax. It weakens companies’ willingness to join employer organisations, which are based on the freedom of association.

Employers’ organisations - membership and density

 

2012

2013

2014

Source

Employers’ organisation density in terms of active employees

no data

21%

no data

Visser (2014)

Employers’ organisation density in private sector establishments*

no data

no data

no data

European Company Survey 2013

*Percentage of employees working in an establishment which is a member of any employer organisation that is involved in collective bargaining.

Main employers’ organisations

The two most significant employer organisations are MGYOSZ and VOSZ in the private sector. Together with ÁFEOSZ, they are members of VKF. These three employer organisations have managed to keep their role in national level consultation and negotiation, while the others tend to boost their activity in sectoral social dialogue, or are forced to look for different ways of adaptation to the changed structure of social dialogue.

Main employers’ organisations and confederations

Long name

Abbreviation

Members

Year

Involved in collective bargaining

Confederation of Hungarian Employers and Industrialists (Munkaadók és Gyáriparosok Országos Szövetsége)

MGYOSZ is the Hungarian member of BusinessEurope. Its members are mainly sectoral federations (more then 50), but it affiliates companies directly as well (mainly multinationals, large employers).

MGYOSZ

6,000

2013

Yes (if tripartite consultation on the minimum wage and negotiation on wage increases in the framework of VKF is considered as collective bargaining)

Hungarian Federation of Consumer Co-operative Societies and Trade Associations ( Általános Fogyasztási Szövetkezetek és Kereskedelmi Társaságok Országos Szövetsége )

Members are largely retail cooperatives, but it has members from the catering and the tourism sector as well.

ÁFEOSZ

5,300

2013

Yes (if tripartite consultation on the minimum wage and negotiation on wage increases in the framework of VKF is considered as collective bargaining)

National Association of Entrepreneurs and Employers ( Vállalkozók és Munkáltatók Országos Szövetsége)

VOSZ also has large enterprises amongst its members, but it mainly affiliates SMEs, as direct members.

VOSZ

53,000

2013

Yes (if tripartite consultation on the minimum wage and negotiation on wage increases in the framework of VKF is considered as collective bargaining)

Association of Agriculture Employers ( Agrár Munkaadói Szövetség)

Members come from agriculture, they are both single producers and companies.

AMSZ

1,500

2013

No

National Federation of Traders and Caterers ( Kereskedők és Vendéglátók Országos Érdekképviseleti Szövetsége )

KISOSZ organises Hungarian-owned self-employed and family entrepreneurs – thus its members are micro, small and medium-sized companies.

KISOSZ

40,000

2013

No

Hungarian Industrial Association (Magyar Iparszövetség)

Members are Hungarian-owned SMEs.

OKISZ

1,950

2013

No

Hungarian Association of Craftsmen’s Corporation (Ipartestületek Országos Szövetsége)

Members are small craft and artisan businesses.

IPOSZ

279

2013

No

National Federation of Agricultural Co-operators and Producers ( Mezőgazdasági Szövetkezők és Termelők Országos Szövetsége )

The largest employer organisation in the agricultural sector, the only one which affiliates agricultural enterprises and subsectoral organisations. With the cessation of OÉT, it is active in the agricultural sectoral social dialogue committee.

MOSZ

62

2013

No

National Association of Strategic and Public Utility Companies ( Stratégiai és Közszolgáltató Társaságok Országos Szövetsége )

STARTOSZ affiliates state-owned – mainly public utility – companies.

STRATOSZ

34

2013

No

Tripartite and bipartite bodies and concertation

Since 2012, the only forum of tripartite dialogue at national level is the Permanent Consultative Forum of the Private Sector and the Government (Versenyszféra és a Kormány Állandó Konzultációs Fóruma, VKF). It cannot be considered a replacement for OÉT (which ceased to exist in 2011). The operation of VKF is not regulated by law. Its sessions are organised on an ad hoc basis, without an annual agenda, and in a way that does not enable parties to have profound debates. Its meetings usually are not open to public. Annual consultations and negotiations on national minimum wages and the wage recommendations, and on the subsequent agreements, have been the only constant topics of national level tripartite dialogue recently.

The National Economic and Social Council (Nemzeti Gazdasági és Társadalmi Tanács, NGTT) is a multipartite forum to consult on wide-range of socio-economic issues, involving large number of actors as detailed earlier. It cannot be considered as a social dialogue body. It is a symbolic consultative civil dialogue body, without any negotiation function.

Sectoral social dialogue committees (30 altogether) have existed in Hungary since 2004. They have been established to facilitate sectoral dialogue in general, including sectoral collective bargaining which has not yet been fully integrated into the system of collective bargaining. Sectoral social dialogue committees are governed by legislation (Act LXXIV of 2009) which regulates the operation of sectoral and mid-level social dialogue. Legislation also stipulates in detail the criteria for representativeness at sectoral level. Legislators had the explicit intention when drawing up the new Labour Code (Labour Code) to foster trade unions’ bargaining activity and shift collective bargaining from the traditional company level to the level of sectors. According to experience so far, the new code has not resulted in the multiplication (or increase) of the number of sectoral level collective agreements.

Main tripartite and bipartite bodies

Name

Type

Level

Issues covered

National Economic and Social Council (Nemzeti Gazdasági és Társadalmi Tanács, NGTT)

multipartite

national

Overall social-economic issues, strictly for information and consultation without the right to negotiating (or collective bargaining)

Permanent Consultative Forum of the Industry and the Government (Versenyszféra és a Kormány Érdekegyeztető Fóruma, VKF).

tripartite

national

Minimum wage, annual recommendation for general wage increase, for negotiation; labour-law related issues for consultation. Other issues in the area of work-related taxation or health and safety, sometimes EU-related legislation, but only on an ad hoc basis, and for information or consultation only

Sectoral social dialogue committees (Ágazati Párbeszéd Bizottságok, ÁPB)

bipartite

sectoral

Issues covered agreed by the parties. Committees have the right to collective bargaining

Workplace-level employee representation

Trade unions and works councils coexist in Hungarian workplaces. Their role, rights and obligations, as well as their relationship with the management/employer are regulated by the Labour Code (Act 1 of 2012), Part 3. on Industrial Relations

Role, rights and obligations of unions and works councils

Trade union

Szakszervezet

Works council/ body of worker participation

Promoting workers’ economic and social interests

Monitoring compliance with legislation at the workplace.

Right of collective bargaining

Right to conclude a plant agreement: regulating also working conditions (except wages), if there is no representative trade union or an already concluded collective agreement at the employer (considered as a quasi-collective bargaining right).

When a collective agreement or a trade union eligible for collective agreement is in place at the employer the plant agreement should strictly cover issues related to the original mission of works councils.

Right to seek employers’ information related to workers’ employment contract, economic and social interests. The employer is not obliged to inform them.

An employer is obliged to inform the works council regularly about:

- basic economic situation of the employer

- wage-related issues, working time schemes, basic employment situation of the employer

- number and working position of tele-workers and agency workers at the enterprise.

Right to provide its opinion and initiate consultation with the employer about the employer’s planned decisions/measures.

Employer is obliged to seek the opinion of works council on each of his/her decisions/measures which concern the large number of workers, 15 days prior to decision.

Right to represent members’ interests at court, authorities and other institutions

Co-determination right on the use of companies welfare funds.

Right to strike

Ban on organising strike.

The new Labour Code (Act I of 2012) has introduced specific modifications in relation to industrial relations at workplaces. Key points are as follows.

  • Prior to 2012, trade unions’ representativeness at enterprise level depended on the number of their members elected to the works council. In the new Labour Code this rule is replaced by a 10% threshold (number of trade union members/total number of workers at the employer) set in relation to the right of collective bargaining.
  • If there is no ‘representative’ trade union at the employer (a trade union empowered to enter into collective bargaining) and no collective agreement is in force, the works council has the right to conclude a ‘plant agreement’ with the employer which also regulates working conditions, except wages.
  • Works councils possess an ‘inspection’ function and have the right to follow the lawful operation of the employer; however, only a union has the right to represent workers in complaints of unlawfulness or other disputes.
  • An employer now has information and consultation obligations towards a works council only (under the former legislation, the enterprise-level trade union also had this right.)

Regulation, composition and competences of the bodies

 

Regulation

Composition

Competences of the body

Involved in company level collective bargaining?

Thresholds/rules when they need to be/can be set up

Works council (üzemi tanács, ÜT)

Labour Code

Art. 230–Art. 234 and especially Art. 235–Art. 268

Members elected by workers

Right to conclude ‘plant agreement’ which under specific conditions can also regulate working conditions, except wages or wage-related issues stipulated in the relevant chapter of the Labour Code

50 employees (non-mandatory).

Plant representative (üzemi megbízott)

Labour Code

Art. 269

One elected representative, in case the number of employees is below 50.

Worker participation in the absence of works council.

Enterprises under 50 employees (non-mandatory).

Conciliation committee (egyeztető bizottság)

Labour Code

Art. 291–Art. 293

Bipartite body (representatives of employer, and trade union or works council in the same number) under the chairpersonship of a jointly selected independent person.

Solving disputes between trade unions and the employer or between works council and the employer.

No threshold, ad hoc or permanent body (in the latter case it has to be stipulated by the plant agreement or the collective agreement).

Employee representation at establishment level

In the figure, we see a comparison between Hungary and European Union for the people with 'Establishment size : All' when asked 'Official structure of employee representation present at establishment'. For the 'Yes' answer, Hungary's score is lower than the European Union score. For the 'No' answer, Hungary's score is higher than the European Union score. The National comparisons visualisation presents a comparative overview for the values of all answers between two selected countries.

Source: ECS 2013. Private sector establishments with more than 10 employees. Eurofound data visualisation.

Collective bargaining

Collective bargaining

Bargaining system

The Labour Code (Act I of 2012) provides for the legal basis of the collective bargaining system, especially Part XXII (Art. 276–Art. 284). These provisions regulate collective bargaining in the private sector, including state-owned enterprises (mainly public utility companies).

Under former legislation, the works council’s election functioned also as the measurement of representativeness of trade unions, and the acquired collective bargaining right remained valid until the next works council’s election. Based on the new Labour Code, a trade union loses its right of collective bargaining (and thus its legally unspoken representativeness) at the moment when the number of its members decreases below the 10% threshold.

The other modification of the Labour Code has empowered works councils to conclude a plant agreement with a rather similar content as a collective agreement under specific conditions. (See Workplace-level employee representation section.)

Hungary introduced sectoral social dialogue committees to promote sectoral dialogue in general, including collective bargaining at that level in 2004 in the private sector. This institutional development has been successful in some sectors but, however, has not resulted in a growing number of sectoral level collective agreements. Most committees use the institutional framework for discussing economic, labour and social issues of mutual concern without entering into binding negotiations.

Collective bargaining is not possible for civil servants (employees of the state administration at various levels, public officials) according to Act CXCIX of 2011 on civil servants. For public employees (who are employed by the various budgetary institutions in areas such as education, health care, social services) collective bargaining is possible. Any derogation from the relevant acts and the implementation decrees by a collective agreement is, however, only possible if it is allowed by Act XXXIII of 1992 on public employees.

Collective agreements are legally binding.

Wage bargaining coverage

Databases that allow the calculation of coverage ratios do not exist in Hungary. Experts consider the coverage ratio low, based on the assumed number of collective agreements and the organisation level of trade unions.

According to the European Company survey, wage bargaining coverage stands at about 21% of employees. The sectoral level is relatively poor, with only three sectors which have collective agreements. The three sectors are the following: electricity, construction and tourism–hospitality. The national cross-sectoral level does not exist.

Collective wage bargaining coverage of employees at different levels

Levels

 

Source

All levels

21%

2013 – ECS

All, excluding national level

20%

2013 – ECS

All levels

31%

2010 – SES

Sources: Eurofound, European Company Survey 2013 (ECS), private sector companies with establishments >10 employees (NACE B-S) – multiple answers possible; Eurostat, Structure of Earnings survey, companies >10 employees (NACE B-S), single answer: more than 50% of employees covered by such an agreement.

Bargaining levels

The company level is the predominant level of collective bargaining in Hungary.

Although the Labour Code (Act I of 2012) does not distinguish between bargaining levels, the Hungarian system can be considered as a two-tier bargaining structure, with the single or multi-employer (enterprise level) agreements and the agreements which are signed by an employer organisation. The latter one is loosely (and not consistently) determined as an ‘agreement with wider scope’. It refers in practice to sectoral level bargaining which could cover a part of the sector only.

At national level, social partner confederations are not involved in collective bargaining in the traditional understanding of the term, in a bipartite manner – as indicated already earlier. They are involved in tripartite as well as multipartite consultation and discussion on the minimum wages (within the framework of VKF and NGTT). They are also parties to the tripartite recommendation on the average wage increase agreed in the framework of VKF. There is no obligation to follow this recommendation and there are no data available on the degree to which the recommendation is used by bargaining parties in practice.

Nevertheless, since the tripartite recommendation on the average wage increase is meant to guide lower level collective bargaining, especially wage bargaining, it is indicated – in brackets – in the table below.

In case of public employees only, ‘institutional level’ collective bargaining (single employer bargaining) is stipulated by the relevant Act XXXIII of 1992. Special agreements with a wider scope can be concluded by the government and sectoral trade unions, but neither their content nor the negotiation procedure follows the overall collective bargaining pattern.

Levels of collective bargaining 2016

 

National level (Intersectoral)

Sectoral level

Company level

Wages

Wages

Working time

Wages

Working time

Wages

Working time

Principal or dominant level

       

x

x

Important but not dominant level

x

         

Existing level

   

x

x

   

Articulation

The various levels of collective bargaining in the private sector are not systematically linked, due primarily to the fact, that sectoral collective agreements are rare; and at national level, the only relevant output is a tripartite recommendation on wage increases and its role in the bipartite collective bargaining machinery is limited.

In the public sector, the single employer collective agreements are fairly distinct outcomes of local bargaining, and only the relevant legal framework provides an overall framework.

Timing of the bargaining rounds

In the private sector, bargaining rounds usually occur at the end of the year. In some years, bargaining has been postponed due to the late agreement of VKF to the recommended average wage increase, or delayed due to difficulties in the bargaining process.

In the public sector, collective bargaining has to be scheduled according to the availability of reliable information on state budget for the subsequent year (if not according to the approved law).

Coordination

Coordination of single employer collective bargaining is weak both in the private and public sector. Coordination is considered to be an internal affair of those sectoral trade union and employer organisations to which the bargaining parties are affiliated. There is no pace or trend-setting tradition in Hungary.

Extension mechanisms

Collective agreements concluded at sectoral level can be extended by the resolution of the minister responsible for employment policy. The extension is regulated by Act LXXIV of 2009 on the Sectoral Dialogue Committees and by its implementation decree (SZMM Decree 22/2009 (IX. 30.)). According to Article 17 of Act, the Sectoral Dialogue Committees as well as the signing sectoral social partners can initiate the binding extension. An extension is an administrative procedure after due consultation with national social partner confederations and the relevant line minister, as stipulated by Act, and the resolution of the minister can be challenged at the Labour and administrative courts.

Derogation mechanisms

In the Hungarian context, derogation mechanisms should be discussed in two senses:

  • in collective agreements at different levels;
  • in the relationship between collective agreements and legislation.

The lower level collective agreements may derogate from the higher level collective agreements, but only in favour of workers. The few higher level collective agreements have opt-out options – mainly regarding the organisation of working time.

The Labour Code has a unique regulation on the derogation of the collective agreements vis-a-vis legislation. In principle, the collective agreements can derogate from the rules of the Labour Code not only in favour of workers but also to their detriment. The closing part of each chapter of the Labour Code precisely defines those provisions from which no derogation is allowed by a collective agreement, or allowed only in favour of workers. Regarding all other provisions, derogation is possible in a way which could be unfavourable or harmful for workers. Opening the derogation in both directions, according to the legislator, is intended to provide more room for bargaining, leading also to package type agreements. There is no doubt, however, that the influence of employers has been strengthened by this new regulation.

Expiry of collective agreements

Collective agreements can be concluded for an indefinite or definite period. If the most recent one has expired it loses its force immediately and is repealed.

A new regulation of the Labour Code is that if the membership of the contracting trade union has dropped below the 10% threshold, the collective agreement negotiated by it is repealed. Where one employer takes over from another, the new employer is required to apply the rules of the existing collective agreement for a one-year-period if it still has a year or more of validity to run (Art. 281 and Art. 282 of Labour Code).

Other aspects of working life addressed in collective agreements

According to experts, collective agreements have continued to focus on traditional bargaining issues, including interpretations of the Labour Code. Contemporary challenges (such as gender equality, life-long learning, flexibility) are often missing as they are mainly dealt with by employers only and have not yet become the subject of comprehensive bargaining packages.

The main issues regulated by collective agreements are:

  • wages and fringe benefits (contributions to the meals of workers, contributions to their transport needs, contributions to voluntary pensions, and health and recreation services);
  • working time schedules, taking into consideration especially the situation of workers with children;
  • the rights of worker’s representatives.

Industrial action and disputes

Industrial action and disputes

Legal aspects

The Fundamental Act (of 25 April 2011) guarantees workers, employers and their organisations, along with the right to collective bargaining, the right to take collective action to defend their interests, including the right to discontinue work (Act XVII Section (2)).

While industrial actions initiated by workers or their organisations are regulated in a fairly detailed way, especially the strikes, legislation is silent on the most obvious possible industrial action by employer, the lock-out.

The right to strike is regulated by Act VII of 1989. The right to strike is guaranteed to individual workers in pursuit of their own demands, while the right to organise a solidarity strike is granted only to trade unions. As a basic rule, a strike can be called only after attempts to resolve conflicting interests have been made for at least seven days (Art. 2).

There are some limitations both regarding possessing and exercising the right to strike. No right to strike is given to the staff of law enforcement agencies, armed forces and the judiciary. Civil servants of the public administration have the right to strike but may only exercise it according to the special regulations fixed in the agreement between the Government and the relevant trade unions.

The Act lists the circumstances when strike action is unlawful (Art. 3).

In case of activities of fundamental public concern – such as, in particular, mass transportation, telecommunications, electricity, water, gas and other energy supply – the right to strike may only be exercised so as not to impede the provision of services at a level deemed sufficient. The ‘sufficient level’ could be defined by an Act of the Parliament (according to the amendments of Act on strike action in 2010 and 2012), which already has happened in some areas. These regulations strongly limit the right to strike in the certain public services.

Other forms of industrial action are much more common in Hungary than strikes. Such actions are: protest meetings and protest rallies, demonstrations, petitions and collecting signatures. The first two are regulated by Act III of 1989 on the right of assembly, while the third is regulated by Act CLXV of 2013 on complaints and by Act CXXXVIII of 2013 on referendums, European initiatives and the procedure of the referendum.

Industrial action developments 2012–2015

 

2012

2013

2014

2015

Working days lost per 1000 employees

0.15

1

n.a.

n.a.

Number of strikes

3

1

n.a.

2

Source: Hungarian Central Statistical Office

Dispute resolution mechanisms

Collective dispute resolution mechanisms

The collective dispute resolution mechanisms are regulated by the Labour Code (Act I of 2012), Art. 291 – Art. 293.

Important to note that the Labour Code uses the term ‘collective labour disputes’, which is interpreted as solely collective interest disputes.

Depending on the parties in argument or disagreement, the employer and the works council or the employer and the trade union may set up an ad hoc conciliation committee (egyeztető bizottság) to resolve their disputes (see also earlier under workplace-level employee representation). The plant agreement or the collective agreement may contain provisions for a standing conciliation committee as well.

The conciliation committee is composed of an equal number of members delegated by the employer and the works council/the trade union, and an independent chairperson. The employer and the works council/ the trade union may agree in writing in advance to abide by the decision of the committee. In this case the committee’s decision is binding. In the case of a tied vote, the chairperson’s vote is decisive.

Some collective disputes specified by the Labour Code (Art. 236 Sec 4; Art. 263) should be decided by an arbitrator.

The Labour Arbitration and Mediation Service (Munkaügyi Közvetítői és Döntőbírói Szolgálat, MKDSZ) – as an alternative dispute resolution body – can be invited by the parties in dispute to assist (through conciliation or mediation) or to arbitrate.

Individual dispute resolution mechanisms

According to the Labour Code (Art. 285), the main individual dispute resolution bodies are the courts. Individual labour disputes are decided by specialised courts, by the administrative and labour courts (which are on the district court level, but they operate only in the county seat towns). These courts provide for the first instance, while cases not settled are presented to the Civil courts in the second instance.

Regarding the use of dispute resolution mechanisms, data are available on employment disputes at courts. The number of these disputes is relatively constant, between 140,000–150,000 cases per year. The vast majority of cases are resolved in the first instance, and fewer than 2% go to appeal.

Use of dispute resolution mechanisms

 

2012

2013

2014

2015

Court

18,299

16,023

14,186

14,273

Mediation

n.a.

n. a.

n. a.

n.a.

Labour Arbitration and Mediation Service

latest statistics are from 2009

   

-

Source: Court Statistics

Individual employment relations

Individual employment relations

Individual employment relations are the relationship between the individual worker and their employer. This relationship is shaped by legal regulation and by the outcomes of social partner negotiations over the terms and conditions governing the employment relationship. This section looks into the start and termination of the employment relationship and entitlements and obligations in Hungary.

Start and termination of the employment relationship

Requirements regarding an employment contract

According to the Labour Code, an employment relationship is established by entering into an employment contract (Art. 42). In some cases a medical examination is required, to certify fitness to work.

Employment contracts may only be concluded in writing. If the employment was not agreed in writing it is invalid and can only be invoked by the worker within 30 days.

The minimum working age is sixteen (Labour Code, Art. 34 Sec (2)). By way of derogation from the above, any person of at least 15 years of age receiving full-time school education may enter into an employment relationship during school holidays. By authorisation of the relevant authority, young persons under 16 may be employed for the purposes of performance in cultural, artistic, sports or advertising activities (Labour Code, Art. 34 Sec (2) and (3)).

There are special requirements in the public sector set by the relevant law (especially Act CXCIX of 2011 on civil servants; Act XXXIII of 1992 on public employees; and Act XLIII of 1996 on the armed forces). One special requirement is, for example, that secondary education is required for civil servants and law enforcement officers. Most government sector jobs require no criminal convictions. The minimum working age in the public sector is usually 18. Specific jobs in the government sector require appropriate educational attainment which is regulated by the relevant acts and the implementation decrees of the given acts.

Dismissal and termination procedures

The Labour Code (Art. 64) stipulates three major forms of termination of employment relationship:

  • termination by notice,
  • termination with immediate effect,
  • termination by mutual agreement.

Termination by notice (Labour Code, Art. 65–Art. 70) can be initiated by both the worker and the employer. There are various bans on dismissal linked to pregnancy, maternity and childcare. Employers are required to justify the dismissal. A worker may be dismissed only for reasons in connection with his/her behaviour in relation to employment relationship, or with his/her ability or in connection with the employer’s operations. Workers are not required to give reasons for terminating their employment relationship. The basic notice period is 30 days which has to be extended by between five and 60 days in proportion with the length of service, if employment is terminated by the employer. A dismissed worker with at least three years of service is also entitled to a severance payment. Severance payment is also due in some other cases (Labour Code Art. 77) such as if the employment relationship is ended without just cause.

There are special provisions regarding collective dismissals (Labour Code Art. 71 – Art. 76) in line with the EU directive. For example, negotiation with the works council is compulsory and the employer has to inform the works council in writing about the reason of the collective dismissal.

Both the employer and the worker can terminate an employment relationship with immediate effect and without notice if the other party:

  • willfully or by gross negligence commits a grave violation of any substantive obligations arising from the employment relationship;
  • otherwise engages in conduct that would render the employment relationship impossible. (Labour Code Art. 78 – Art. 79)

The employment relationship can be terminated by mutual agreement. The term mutual agreement is loosely regulated by the Labour Code: the parties have considerable freedom and only the general principles have to be followed.

Some special groups – for example executive officers, temporary agency workers – are subject to less stringent regulations.

In the public sector, termination of employment has specific, often more specific and binding rules; the notice period is different and the severance payment is higher. The specific rules are regulated by the relevant acts (primarily in Act CXCIX of 2011 on civil servants; Act XXXIII of 1992 on public employees).

See also further information on unemployment benefit provisions in Hungary.

Entitlements and obligations

Parental, maternity and paternity leave

Although the social system has been transformed in Hungary relatively significantly, radical changes have not occurred in this field. One of the main changes is that the uptake of paternity leave is growing and from 2014 people who receive GYED and GYES (see below) can work after the first birthday of the child.

The table below gives an overview of the main characteristics of the statutory leave arrangements in Hungary. Specific rules (on adoptive parents, foster parents, twins and so forth) can be found in Act LXXXIII of 1997 on health insurance allowances and Act LXXXIV of 1998 on family support as amended for the given years.

Parental leave in Hungary is a family entitlement, so parents can choose whether the father or the mother will stay with the child, although usually it is the latter.

Regarding the amount of benefits provided, and the financing institution, there is a difference between ‘insured” and ‘non-insured’ people. They can be considered insured if they have at least 365 days of employment within two years of the birth of a child. The abbreviations for the various benefits are as follows:

  • TGYÁS – Pregnancy and Confinement Benefit (Terhességi-gyermekágyi segély)
  • GYED – Childcare fee (Gyermekgondozási díj)
  • GYES – Child home care allowance (Gyermekgondozási segély)

Statutory leave arrangements

Maternity leave (for insured mothers only)

Maximum duration

24 weeks, out of which 4 weeks could be pre-natal (non-mandatory).

Reimbursement

TGYÁS - 70% of the previous average daily earning.

Who pays?

Social insurance (Health Insurance Fund, Egészségbiztosítási Alap www.oep.hu

Legal basis

Act LXXXIII of 1997

Parental leave (for insured parents)

Maximum duration

a) After the maternity leave, until the child’s second birthday,

b) After the second birthday of the child until his/her third birthday

(non-mandatory)

Reimbursement

a) GYED

70% of the previous average daily earning, but capped at a given percentage of the statutory minimum wage (in 2017: HUF 178,500/month, about EUR 585)

b) GYED

Flat-rate benefit equal to the amount of the minimum old-age pension (in 2017: monthly gross HUF 28,500, about EUR 94)

Who pays?

a) social insurance (Health Insurance Fund)

b) Treasury

Legal basis

a) Act LXXXIII of 1997

b) Act LXXXIV of 1998

Parental leave (for non-insured parents)

Maximum duration

Until the child’s third birthday

Until the first birthday of the child, this entitlement is only for mothers (sort of maternity leave).

(non-mandatory)

Reimbursement

GYED

Flat-rate benefit equal to the amount of the minimum old-age pension (in 2017 monthly gross HUF 28,500 which is EUR 94).

Flat-rate benefit equal to the amount of the minimum old-age pension (in 2017: monthly gross HUF 28,500, about EUR 94)

Who pays?

Treasury

Legal basis

Act LXXXIV of 1998

Paternity leave

Maximum duration

5 days, to be taken in the first two months following the birth

All employed fathers are eligible.

(non-mandatory)

Reimbursement

Absence fee (an additional benefit for fathers)

Who pays?

Social insurance (Health Insurance Fund)

Legal basis

Act I of 2012

Additional paid leave to the annual paid leave for workers having more children

Maximum duration

Length depends on the number of children: 1 child = 2 days; 2 children = 4 days;

3 or more children; 7 days.

For both employed mothers and fathers.

(non-mandatory)

Reimbursement

Absence fee

Who pays?

The employer

Legal basis

Act I of 2012

Sick leave

Sick leave and the related payment are regulated by Act LXXXIII of 1997.

For the duration of sick leave, 70% of the absence fee, which is based on the average wage of the worker and is defined by the Labour Code, is paid.

Retirement age

Retirement age is regulated by Act LXXXI of 1997 on Social Security Pension Benefits.

The retirement age for old-age pension benefits under the social security system will be 65 years from 2022. The retirement age has been gradually increasing since 2010. The other eligibility criterion for a full old-age pension is at least 20 years of service. A partial retirement pension is granted to people who have reached the relevant retirement age for the old-age pension and have at least 15 years of service.

There is a gender difference: full old-age pension benefit is due to any woman having at least 40 years of service, irrespective of age.

In the public sector civil servants and some other officers are obliged to retire at the age of 70. There is a new regulation that a government sector employee should not have a parallel pension and salary; if past retirement age, he/she has to choose whether the pension is suspended or the paid public sector employment has to be terminated.

In the armed forces and law enforcement agencies, employees can retire five years earlier.

Pay

Pay

Pay: For workers, the reward for work and main source of income; for employers, a cost of production and focus of bargaining and legislation. This section looks into minimum wage setting in Hungary and guides the reader to further material on collective wage bargaining.

Minimum wages

The statutory minimum wage is set by the Government after consultation with the multipartite national civil dialogue body, the National Economic and Social Council (Nemzeti Gazdasági és Társadalmi Tanács, NGTT) (Act I of 2012 on Labour Code, Labour Code, Art. 153. Sec (1) and Act XCIII of 2011 on NGTT).

Prior to this consultation, the Government also consults the social partners of the private sector within the national tripartite body, the Permanent Consultative Forum of the Private Sector and the Government (VKF). This consultation has no basis in law beyond the agreement of the parties to VKF (agreement on the establishment of VKF and its standing order, dated 22 February 2012.)

In practice, VKF is the terrain of wage negotiations, partly as a legacy of the National Interest Reconciliation Council (Országos Érdekegyeztető Tanács, OÉT), the former national tripartite body, which used to have a co-determination right on the minimum wage. If the parties to VKF agree on the minimum wage, this decision becomes a proposal to be presented by the Government to NGTT for consultation. If no agreement is achieved within VKF, the Government can put forward its own proposal. In both cases the final decision on the minimum wage rests with the Government, taking into consideration the outcome of the usually rather formal discussion within NGTT.

The minimum wage is legally binding on all workers, and is implemented by annual government decrees. There are two specific exceptions.

  • Workers employed in jobs which require at least secondary educational attainment should get the so-called guaranteed wage minimum, which is higher. The guaranteed wage minimum is set by the general procedure as described above.
  • Workers employed in public works programmes, whose wage is determined separately by the Government only, without any consultation with social partners. Their wages are implemented by programme-related government decrees.

Sectoral collective bargaining could in theory lead to higher minimum wages for each sector’s respective area. However, in practice there are only a small number of sectoral agreements, and most reiterate the statutory minimum wage.

For more information regarding the level and development of minimum wages, please see Eurofound’s topical update on statutory minimum wage in the EU 2017 or visit Eurostat.

Collectively agreed pay outcomes

For more detailed information on the most recent outcomes in terms of collectively agreed pay, please consult Eurofound’s collectively wage bargaining portal.

Working time

Working time

Working time: ‘Any period during which the worker is working, at the employer’s disposal and carrying out his activities or duties, in accordance with national laws and/or practice’ (Directive 2003/88/EC). This section briefly summarises regulation and issues regarding working time, overtime, part-time work as well as working time flexibility in Hungary.

Working time regulation

The Labour Code (Act 1 of 2012, Labour Code) regulates working time in Hungary.

The standard normal working time is eight hours a day (Labour Code Art. 92 Sec 1) or 40 hours a week (calculated on the basis of the standard work pattern of five days a week (Labour Code Art. 97 Sec 2), and eight hours daily working time).

In two specific circumstances (Labour Code Art. 92 Sec 2), parties may agree on a longer maximum daily working time, up to 12 hours (or 48 total weekly working hours). This so-called extended daily working time could only apply to workers:

  • working in stand-by jobs;
  • who are relatives of the employer or the owner.

The Labour Code provides a specific list of those provisions where derogation from the working time statutory regulations by collective agreement is: not allowed at all (Art. 135 Sec 1); allowed only for the benefit of workers (Art. 135 Sec 2); or for specific groups of workers (Art. 135 Sec 3).

In two cases collective agreements could provide workplaces with significantly more flexibility than the basic rules of the Labour Code allow.

  • While the so-called working time frame (Par 93) – that is, the reference period for calculating the average weekly and daily working time – is capped at four months, it can be extended in special circumstances (like shift work, continuous work, stand-by jobs) to six months, or it can be extended up to 12 months by collective agreement.
  • While overtime (Par 113) is capped at 250 hours annually, it can be increased to a maximum of 300 hours by collective agreement (Par 135).

For more detailed information on working time (including annual leave, statutory and collectively agreed working time), please consult Eurofound’s report on Working time developments in the 21st century: Work duration and its regulation.

Overtime regulation

Overtime is defined by the Labour Code (Act I of 2012), Par 107 as:

  • working time which exceeds daily working hours – if neither the so-called working time frame nor the so-called longer settlement period is applied;
  • working time which exceeds the total working time set for the period of working time frame;
  • working time which exceeds the total working time calculated for the longer settlement period;
  • on-call time (partially or entirely if the time spent actually on work cannot be measured).

The term ‘working time frame’ (munkaidő keret) is synonymous with the reference period in the meaning of the 2003/88/EC Directive on the management of working time. The ‘longer settlement period’ (elszámolási időszak) (Par 98 of Labour Code) can be applied in the absence of a working time frame. This working time arrangement is used to ‘settle’ the plus or minus (credit and debit) working hours accrued or not worked in the first week of the settlement period. The employer is thus entitled to require the worker to complete his/her weekly standard normal working time over a longer period. Both the length (up to 16 weeks) and the starting date of the settlement period are determined by the employer.

The annual limit on overtime is 250 hours (Art. 113 of Labour Code), which could be increased to 300 hours by collective agreement (Art. 135). The employer can request overtime not only in reasonable circumstances (as prior to 1 July 2014) but in any circumstances with some sort of justification.

Overtime is compensated by:

  • 50% wage supplement or time in lieu, according to the parties’ agreement;
  • 100% wage supplement on weekly rest days (not necessarily Sundays but according to the working time schedule) and on public holidays or 50% wage supplement if time in lieu is also granted.

On-call time has special compensatory provisions.

The maximum total working weekly and daily hours are as follows:

  • for standard normal working time – 48 hours and 12 hours (Labour Code Art. 99 Sec 2);
  • extended daily working time – 72 hours and 24 hours (Labour Code Art. 99 Sec 3);
  • in the health sector – 60 hours and 12 hours (Act LXXXIV of 2003 /as modified by LXXIX of 2012/ Art. 12/F).

There are further specific provisions in cases where health workers only perform on-call duties during the working time beyond the normal working hours.

Part-time work

According to the Labour Code (Act I of 2012), the employer and the worker may agree on a shorter daily working time (Labour Code Art. 92 Sec 5), establishing a part-time employment contract, or they can modify an already existing full-time employment contract to a part-time one if both wish to do so. The Labour Code does not contain further detailed rules on part-time work. The general employment rules apply for part-time work along with the principle of pro rata temporis, especially in respect of worker benefits offered directly or indirectly, in cash or in kind. A special regulation applies to workers with children under 3 years. In their case the employer has no right to refuse modifying the employment contract for part-time work (for as reduced daily hours as half of the normal working day) if requested by the worker (Labour Code Art. 61 Sec 3).

In Hungary, the level of wages is very low on average, and consequently part-time workers' earnings are even worse. Often family income is complemented by the women employed on a part-time basis. The State supports child-rearing, together with the employment of women on a part-time basis. Therefore, the proportion of female part-time workers is higher than men’s proportion. As the table below shows, in the last five years part-time work has decreased for all categories, and the percentage of part-time workers is significantly below EU28 averages.

Persons employed part-time in Hungary and EU28 (% of total employment)

 

2011

2012

2013

2014

2015

2016

Total - EU28

18.2

18.6

19.0

19.0

19.0

18.9

Total - HU

6.4

6.7

6.4

6.0

5.7

4.7

Women - EU28

31.0

31.4

31.8

31.7

31.5

31.4

Women - HU

8.7

9.4

9.0

8.3

7.6

6.7

Men - EU28

7.4

7.7

8.1

8.2

8.2

8.2

Men - HU

4.4

4.3

4.2

4.1

4.0

3.1

Source: Eurostat Labour Force Survey [lfsi_pt_a] – Persons employed part-time (20 to 64 years of age) – total and by sex.

Night work

Night work is defined by the Labour Code (Act I of 2012), Par 89:

‘Night work’ shall mean work carried out between twenty-two hours (22:00) and six hours (6:00).

Shift work

Shift work is defined by the Labour Code (Act I of 2012), Par 90 and Par 141:

Section 90

The method of organising the employer’s work is:

b) shiftwork, if its duration reaches eighty hours in a week;

Section 141

(1) If the beginning of the scheduled daily working time of employees changes frequently, for work performed between eighteen hours (18:00) and six hours (6:00) a thirty per cent wage supplement (special payment for shift work) shall be paid.

(2) For the purposes of Subsection (1), changes shall be considered frequent if – on a monthly basis – the beginning of the scheduled daily working time differs for at least one-third of all working days, and if the earliest and the latest start time are at least four hours apart.

Weekend work

Weekend work is defined by

Section 101

(1) Work on Sundays may be scheduled within the framework of regular working time:

a) if the employer generally operates on Sundays by the nature of its business, or in jobs normally performed on Sundays;

b) in seasonal work;

c) if working in continuous shifts;

d) for workers working in shifts;

e) in stand-by jobs;

f) for part-time workers working Saturdays and Sundays only;

g) in connection with the provision of basic public services or transfrontier services, where it is necessary to work on that day owing to the nature of the service;

h) in the case of work performed abroad; and

i) at employers engaged in commercial activities covered by the Trade Act, and at providers of services auxiliary to commercial activities and providers of tourist services of a commercial nature.

(2) As regards Paragraph a) of Subsection (1) the provision of Subsection (3) of Section 102 shall be duly applied.

(3) *

Section 102

(1) Public holidays are: 1 January, 15 March, Easter Monday, 1 May, Whit Monday, 20 August, 23 October, 1 November and 25-26 December.

(2) Regular working time may be scheduled for public holidays in the cases defined in Paragraphs a)-c), g)-h) of Subsection (1) of Section 101.

(3) An employer shall be considered to operate on public holidays by the nature of its business or a specific job shall be approved to operate or to be carried out on public holidays:

a) if the service provided is required on that particular day by way of local tradition or commonly accepted social custom directly connected to the public holiday; or

b) if provided in the interest of the prevention or mitigation of any imminent danger of accident, natural disaster or serious damage or of any danger to health, the environment or property.

Section 140

(1) Employees working on Sundays shall be entitled to a fifty per cent wage supplement (Sunday premium):

a) if the employee can be ordered to work in regular working time only under the conditions referred to in Paragraph d), e) or i) of Subsection (1) of Section 101, and

b) for overtime work:

ba) for the employees referred to in Paragraph a),

bb) if the employee cannot be ordered to work in regular working time under Subsection (1) of Section 101.

(2) Employees required to work on public holidays shall be entitled to a one hundred per cent wage supplement.

Rest and breaks

Rest and breaks are defined by the Labour Code (Act I of 2012), Par 103 and 104:

Section 103

(1) If the scheduled daily working time or the duration of overtime work performed under Paragraph a) of Section 107:

a) exceeds six hours, twenty minutes of break-time shall be provided;

b) exceeds nine hours, and additional twenty-five minutes of break-time shall be provided.

(2) The duration of overtime work performed under Paragraph a) of Section 107 shall be included in the scheduled daily working time.

(3) The break-time provided to employees by agreement of the parties or in the collective agreement may not exceed sixty minutes.

(4) During the break-time work must be interrupted.

(5) The break-time shall be provided after not less than three and before not more then six hours of work.

(6) The employer shall be entitled to schedule break-times in several lots. In this case derogation from Subsection (5) is allowed, however, the duration of the break provided within the timeframe referred to in Subsection (5) must be at least twenty minutes.

Section 104

(1) At least eleven hours of uninterrupted rest period shall be provided after the conclusion of daily work and before the beginning of the next day’s work (hereinafter referred to as “daily rest period”).

(2) The daily rest period shall be at least eight hours for employees working:

a) split shifts;

b) continuous shifts;

c) multiple shifts; or

d) in seasonal jobs.

Working time flexibility

In the Hungarian context, it is worth making a distinction between flexibility in the terms of the length of working time and flexibility in the organisation of working time.

Regarding the flexibility in the length of working time, the Labour Code (Act 1 of 2012) provides detailed and fairly high maximum limits (daily, weekly hours, overtime), allowing derogation (by collective bargaining or individual contracts) to the benefit of workers only. Flexibility towards reduced hours has also its legislative framework.

As regards flexibility in the organisation of working time, the Labour Code provides discretional right to employers. Employers decide on the actual work schedule (Labour Code Art. 96 Sec 1). While employers have to observe the statutory rules on the various elements of working time, they can schedule actual working hours within a broad framework, especially when a working time frame or longer settlement period (as described earlier) is applied.

The employer may transfer the right to set a work schedule to the worker. In that case the worker fully determines his/her personal working schedule (Labour Code Art. 96 Sec 2).

Flexible working time schedules, when workers have the opportunity to fix the start and end of a working day, are not legislated for by the Labour Code but left to collective agreements and individual contracts. Workers do not have a legal right to flexitime arrangements, staggered hours, working time banking or a compressed work week, but they can agree on any of these options with their employer. Collective agreements can also cater for such requests.

As the table below shows, flexitime policy is not yet widely applied in Hungary, while small businesses have been taking the lead.

Do you have fixed start and finishing time in your work?

In the figure, we see a comparison between Hungary and European Union for the workers with 'Age : All' when asked 'Do you have fixed starting and finishing times in your work?'. For the 'No' answer, Hungary's score is lower than the European Union score. For the 'Yes' answer, Hungary's score is higher than the European Union score. Data is based on question 39d from the sixth "European Working Conditions Survey (2015)The National comparisons visualisation presents a comparative overview for the values of all answers between two selected countries.

Source: Eurofound’s European Working Conditions Survey 2015.

More detailed figures are available from Eurofound’s European Working conditions survey.

Health and well-being

Health and well-being

Maintaining health and well-being should be a high priority for workers and employers alike. Health is an asset closely associated with a person’s quality of life and longevity, as well as their ability to work. A healthy economy depends on a healthy workforce: organisations can experience loss of productivity through the ill-health of their workers. This section looks into psychosocial risks and health and safety in Hungary.

Health and safety at work

Generally, in Hungary, reporting on workplace accidents and their consequences and the statistical data gathered on this subject is often considered not fully reliable (especially for micro and small companies).

Data on accidents at work show considerable fluctuation. The 2008–2009 economic crisis has resulted in a significant drop in economic output – especially in the construction sector where, traditionally, there is high OSH risk. This can be seen in the declining number of workplace accidents.

During the recovery period, many enterprises have gone out of business, while new enterprises have started up. New enterprises often consider OSH to be a low priority, striving exclusively for economic results, while newly employed workers also need time to learn and comply with OSH regulations.

It is important to note that when inspectors find violations of OSH regulations, they first give a warning and do not issue fines. This has led to a loosening of rules and their observance, especially for micro and small enterprises.

Accidents at work, with four days’ absence or more – working days lost

 

2008

2009

2010

2011

2012

2013

2014

All accidents

19,291

15,326

16,326

14,277

16,717

15,401

15,918

Percentage change on previous year

n.d.

-20.6

6.5

-12.6

17.1

-7.9

3.4

Per 1,000 employees

5.7

4.7

5.0

4.3

4.9

4.5

4.4

Source: Eurostat, [hsw_mi01] and [lfsa_eegaed]

Psychosocial risks

In Hungary, the mapping of psychosocial risk factors is regulated by legislation.

Workplace stress is addressed by Act XCIII of 1993 on Labour Safety, consolidated with MüM Decree 5/1993 (XII. 26.) issued by the Ministry of Labour, and its amendment (on 1 January 2008). This legislation makes it clear that the employer has the duty to assess and reduce psychosocial risks. The Act defines the concept of psychosocial risk and its consequences (stress, workplace accidents, psychosomatic illnesses).

Act XCIII of 1993 provides for the reduction of high stress risks, and safety inspections to monitor and prevent stress. The relevant articles are:

  • Par 54 Sec (1) Sub-sec d): Duties of the employer regarding avoidance of stress, effects of work related psychosocial risks;
  • Par 87 Sec 1/H: Interpretative provisions: Psychosocial risks;
  • Par 87 Sec 1/D: Occupational illnesses.

Act CXCI of 2011, Par 175 Sec (1) amends Act XCIII Par 54 Sec (3) of 1993 on risk assessment. The employer is now obliged to do a risk assessment at least every three years.

To facilitate better management and reduction of psychosocial risks, evidence from studies, informational literature and promotional materials are published on the website of the inspection agency, the National Labour Office – Labour and OSH Inspectorate (NMI-MMH) based on agreement in the tripartite National OSH Committee.

As the table below shows, the number of workers reporting high work intensity is increasing. It is important to note that during the crisis and the subsequent recovery period, many enterprises tried every possible method of avoiding economic and financial collapse. This strategy has included, among others, complying with any kind of market imperative – too often at the expense of their workers. It has contributed to increased pressure and stress on workers.

Work intensity: Do you have enough time to get the job done?

In the figure, we see a comparison between Hungary and European Union for the workers with 'Age : All' when asked 'Do you have enough time to get the job done?'. For the 'Always or most of the time' answer, Hungary's score is higher than the European Union score. For the 'Rarely or never' answer, Hungary's score is lower than the European Union score. For the 'Sometimes' answer, Hungary's score is lower than the European Union score. Data is based on question 61g from the sixth European Working Conditions Survey (2015). The National comparisons visualisation presents a comparative overview for the values of all answers between two selected countries.

Source: Eurofound’s European Working Conditions Survey 2015.

More detailed figures are available from Eurofound’s European Working conditions survey.

Skills, learning and employability

Skills, learning and employability

Skills are the passport to employment; the better skilled an individual, the more employable they are. Good skills also tend to secure better-quality jobs and better earnings. This section briefly summarises the Hungarian system for ensuring skills and employability and looks into the extent of training.

National system for ensuring skills and employability

The place and role of public institutions responsible for skills identification and development has been much debated in recent years, in relation to the need to increase employability in the workforce and better serve the needs of the economy. In the 2010–2012 period, the adequate response seemed to be an overall integration of labour market institutions, VET institutions and labour and OHS institutions to achieve cooperation and synergy. The National Labour Office (Nemzeti Munkaügyi Hivatal) was thus set up, merging all these specialised institutions, including the National Institute of Vocational and Adult Education (Nemzeti Szakképzési és Felnőttképzési Intézet, NSZFI).

In the meantime each of these policy areas has undergone profound reconsideration, and new legal frameworks have been developed leading to structural change. At the end of 2014, the Government decided to abolish NMH to better serve the demands of job seekers and employers. As of 1 January 2015, vocational training and adult education is the responsibility of the new background institution, the National Office for Vocational and Adult Training (Nemzeti Szakképzési és Felnőttképzési Hivatal), overseen by the Ministry for Economics (em>Nemzetgazdasági Minisztérium, NGM).

All state-recognised vocational qualifications awarded within or outside the school system are defined in the National Qualification Register ( Országos Képzési Jegyzék, OKJ).

Non-governmental organisations, such as the Hungarian Chamber of Commerce and Industry (Magyar Kereskedelmi és Iparkamara, MKIK) and the Hungarian Chamber of Agriculture (Magyar Agrárkamara, MA), play a decisive role in the development of professional and examination requirements (szakmai és vizsgakövetelmények, SZVK) of OKJ qualifications, as well as in VET policy in general. Social partners can express their views within the National Vocational and Adult Training Council (Nemzeti Szakképzési és Felnottképzési Tanács, NSZFT), but this consultative body has a limited role.

Training

Since 2010, a complex restructuring of the whole education system has been underway involving all sectors – general/public education, vocational education and training and higher education. The two profound changes are:

  • since 1 January 2013 vocational schools are maintained and governed centrally by the state;
  • the external evaluation / inspection system has been re-introduced in the education sector after almost three decades of absence.

The National Institute of Vocational and Adult Education (Nemzeti Szakképzési és Felnőttképzési Intézet, NSZFI), has been the responsible national authority for development and research activities in vocational education and training. As indicated above, its organisational status has changed over the years, from relative independence as a government background institution, through becoming a section of NMH, to its regained background institutional status as the newly established HSZFH with increased scope and power from 1 January 2015.

In Hungary, VET is governed by Act CLXXXVII of 2011 on Vocational education and training, while adult training is regulated by Act LXXVII of 2013 on Adult training.

Survey data show that the smaller the company, the less workers receive paid time off for training. Small companies are unlikely to be able to afford to train their workers during paid time off.

Training: Have you had any on the job training in the past year?

In the figure, we see a comparison between Hungary and European Union for the workers with 'Age : All' when asked 'Have you had on-the-job training in the last 12 months?'. For the 'No' answer, Hungary's score is higher than the European Union score. For the 'Yes' answer, Hungary's score is lower than the European Union score. Data is based on question 65c from the sixth "European Working Conditions Survey (2015).The National comparisons visualisation presents a comparative overview for the values of all answers between two selected countries.

Source: Eurofound’s European Working Conditions Survey 2015.

More detailed figures are available from Eurofound’s European Working conditions survey.

Work organisation

Work organisation

Work organisation underpins economic and business development and has important consequences for productivity, innovation and working conditions. Eurofound research finds that some types of work organisation are associated with a better quality of work and employment. Therefore, developing or introducing different forms of work organisation are of particular interest because of the expected effects on productivity, efficiency and competitiveness of companies, as well as on workers’ working conditions. Ongoing research by Eurofound, based on EurWORK, the European Working Conditions Survey and the European Company Survey, monitors developments in work organisation.

For Hungary, the European Company Survey 2013 shows that between 2010 and 2013 32.8% of establishments with 10 or more employees reported changes in the use of technology, 24.4% introduced changes in ways to coordinate and allocate the work to workers and 18.4% saw changes in their working time arrangements. No major relevant surveys of studies have been carried out in recent years in Hungary.

Work organisation: Are you able to choose or change your methods of work?

In the figure, we see a comparison between Hungary and European Union for the workers with 'Age : All' when asked 'Are you able to choose or change your methods of work?'. For the 'No' answer, Hungary's score is higher than the European Union score. For the 'Yes' answer, Hungary's score is lower than the European Union score. Data is based on question 54b from the sixth "European Working Conditions Survey (2015).The National comparisons visualisation presents a comparative overview for the values of all answers between two selected countries.

Source: Eurofound’s European Working Conditions Survey 2015.

More detailed figures are available from Eurofound’s European Working Conditions Survey.

Equality and non-discrimination at work

Equality and non-discrimination at work

Act CXXV of 2003 on Equal Treatment and Promotion of Equal Opportunities is the legal basis for ensuring equality and non-discrimination at work.

The Equal Treatment Authority (Egyenlő Bánásmód Hatóság, EBH) is the body that deals with such issues.

Equal pay and gender pay gap

Act I of 2012 on the Labour Code is the legal basis of this subject.

The principle of equal treatment says:

In connection with employment relations such as remuneration of work, the principle of equal treatment must be strictly observed. Remedying the consequences of any breach of this requirement may not result in any violation of or harm to the rights of other workers. The equal value of work for the purposes of the principle of equal treatment shall be determined based on the nature of the work performed, its quality and quantity, working conditions, the required vocational training, physical or intellectual efforts expended, experience, responsibilities and labour market conditions.

According to survey data, the trend is positive: while the wage gap was around 20% in mid-1990s, it has decreased to 10–15% after 2002. This average however conceals much wider gender pay gaps when the figures are broken down by age of workers, depending on which sector is concerned, and whether a company is private or state-owned.

The latest data on gender wage gap published by OECD in 2013 puts the gap in Hungary at 11.33%.

No significant legislative support measures are in place in Hungary to facilitate the implementation of the relevant Act.

It should also be noted that the new constitution, the Fundamental Law of Hungary (25 April 2011) does not include specific provision on equal pay. Article XV stipulates in general that everyone is equal before the law, and that fundamental rights are guaranteed to everyone without discrimination (listing also the most common grounds of discrimination, including sex). When it comes to the supporting measures, the Article only refers to the promotion of equality of opportunity and social inclusion as well as the protection of families, children, women, the elderly and persons living with disabilities.

Quota regulations

Hungarian legislation, for primarily historic reasons, generally tends to avoid using quotas.

For supervisory boards no quotas apply. In the biggest Hungarian companies, the proportion of women on the supervisory boards is 5.3%.

Out of the various disadvantaged groups of workers, Hungary applies a sort of indirect quota system for workers living with disability. As of 1 January 2010, a rehabilitation contribution is payable by employers who have more than 25 workers with a ratio of disabled workers lower than 5%. Employers can choose whether they employ people with disablilities or contribute to the financial resources used by the Government to support their employment and employability (Act CXCI of 2011 on the Allowances of people with disabilities, Art. 23-24).

Bibliography

Bibliography

Berke, G., Kiss, G., Bankó, Z., Kajtár, E., Kovács, E. (2014), Kommentár a munka törvénykönyvéhez, revised edition, Wolters Kluwer, Budapest.

Fodor T. G., Nacsa, B., Neumann, L. (2008), Egy és több munkáltatóra kiterjedő hatályú kollektív szerződések összehasonlító elemzése (in Hungarian, 631 KB PDF), Kende Ügyvédi Iroda, Budapest.

Kogon, M. (2014), Ágazati párbeszéd Magyarországon (in Hungarian, 1.1 MB PDF).

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