Changes to working time provisions in Labour Code

After years of non-compliance of Hungarian companies with European Court of Justice rulings on working time, the government brought in legislation to modify several working time provisions of the country’s Labour Code. The provisions in Act LXXIII of 2007 include on-call work, the duration of working time breaks, the mandatory duration of the reference period, and the annual maximum amount of overtime. The social partners’ reactions to the new provisions have been mixed.

Background

Modification of working time provisions in the Labour Code became necessary after years of non-compliance with the European Court of Justice (ECJ) rulings in the Simap case (C-303/98) on 3 October 2000 and the Jaeger case (C-151/02) on 9 October 2003 (EU0310202N). Until the new act was drafted – namely Act LXXIII of 2007 – Hungarian law did not consider ‘on-call’ work as part of working time, except for the time actually spent working during the period of being on-call. This part of the country’s labour law was criticised by lawyers specialised in the field, trade unions and especially by the Hungarian Chamber of Physicians (Magyar Orvosi Kamara, MOK). Doctors working in public healthcare facilities filed the first demands to regard on-call work as regular working time in May 2004 – the same month Hungary joined the EU.

The first court decisions were issued in 2005, thereby declaring the entire duration of on-call work as regular working time. Two years later, this stipulation was carried over to the Labour Code, as the existing system of on-call work was no longer sustainable following a decision on the matter by the Constitutional Court (Alkotmánybíróság, AB).

New provisions

Working hours on-call

The most recent modification of the Labour Code did not embrace the working time concept of EU law, declaring instead that the entire period of on-call work – spent at the place of work – shall be taken into account when calculating working time. Although, by definition, being on-call is not considered as being part of working time, the result of this approach is in line with community law in practice.

The new provisions declare that the aggregate length of on-call and working time, including overtime, may not exceed 24 hours for each shift. Furthermore, on-call working shall also be taken into consideration in the calculation of an average weekly working time of 48 hours over a reference period. Unlike the other articles of the new act, these provisions came into force only on 1 January 2008.

Duration of work breaks

The act also amended provisions of the Labour Code on issues not related to community law conformity, such as working time breaks. Previously, the Labour Code set the minimum length of the work break at 20 minutes, while the maximum duration of breaks was undefined. As a result, some employers took this opportunity to order workers to take breaks of up to three to four hours’ duration, thus practically introducing split shifts, which seriously threatened workers’ interests. However, the new law sets the maximum length of the work break at one hour.

Length of reference period

The modification increased the maximum length of the working time reference period without any collective agreement in place from two to three months. The provision allowing annualisation in certain cases remained unchanged. In the case of cumulating rest days, the amendment harmonised the reference periods for weekly rest and working time. Previously, the maximum reference period for weekly rest was six months, while it was one year – under certain circumstances – for working time.

Overtime

Provisions on overtime have also been modified. Under the previous legislation, the annual maximum amount of overtime was 200 hours or 300 hours if agreed in a collective agreement (see also the 2003 EIRO comparative study on Overtime in Europe and the Hungarian contribution (114Kb MS Word doc) to the study). This provision was criticised by small and medium-sized enterprises (SMEs), who were not in a position to conclude collective agreements. The latest modification in this regard makes it possible for every employer to require 300 overtime hours annually if the following strict preconditions are met:

• a written agreement is drawn up with each worker affected;

• the affected worker is employed in a job for which the employer had filed a vacancy notice at the local labour office but no suitable worker was found within 30 days;

• the worker has specialist knowledge and/or qualifications essential for the employer’s line of work;

• an increase of overtime may only affect 10% of the total workforce.

Social partner positions

During consultations on the modification act within the National Interest Reconciliation Council (Országos Érdekegyeztető Tanács, OÉT) and its Labour Law Committee (Munkajogi Bizottság), employers generally welcomed the extension of the reference period and the opt-out provision for overtime hours. Nevertheless, they demanded further flexibilisation allowed by EU law – for example, to extend the reference period up to four months. However, employers criticised the initial draft of the act for focusing on the healthcare sector only, as on-call work is widespread also in other sectors of the economy.

Although trade unions initiated the new provisions on the daily break duration, they rejected the new act, claiming that it undermined the regulatory function of collective agreements and seriously weakened employees’ position, particularly by introducing opt-out provisions for longer periods of overtime. The trade unions emphasised that Hungarian employees were not in the position to conclude voluntary agreements with employers as ‘independent parties’ due to the low level of average basic wages, which are generally insufficient for ensuring a decent livelihood.

Commentary

The act did not fully resolve the problem of non-compliance with Council Directive 93/104/EC concerning certain aspects of the organisation of working time, leaving serious issues unresolved. For example, under Hungarian labour law, employers can still require workers to work overtime during their weekly rest days. Furthermore, non-compliance with EU law remained regarding opt-out provisions in relation to the so-called ‘stand-by jobs’ such as, for example, porters and nightwatches. Although stand-by jobs are officially enumerated as examples for the opt-out provision, the warranties of the directive – non-discrimination, keeping appropriate records of workers, health and safety inspection, authorities’ control – are lacking in the country’s current Labour Code.

However, as the new provisions on extending the overtime period demand relatively strict preconditions, it is unlikely that many employers will be able to make use of the new option.

Many of the modified provisions are generally employer-friendly; nonetheless, the new overtime regulations and extension of the mandatory length of the reference period are favourable for non-unionised employers. This contradictory situation was reflected in the social partners’ views, who could not reach a compromise in this case.

Gábor T. Fodor and László Neumann, Institute for Political Science, Hungarian Academy of Sciences