Living and working in Hungary

According to the 2023 national wage agreement, if inflation were to exceed the expected level, additional compensation would be paid to low earners. A proposal for one-off compensation was not endorsed, and resolution was left to the regular wage negotiations. During those negotiations under the auspices of the VKF (the Permanent Consultation Forum of the Private Sector and the Government), the representatives of employers and employees agreed on the minimum wage for 2024 and the compensation for 2023. A minimum wage increase of 15% for unskilled labour and a 10% rise for skilled labour were decided, and, as compensation, the increased wages were paid out in December 2023. Reaching an agreement was not easy, although the government's position was simple: agreement should not burden the state budget. A recommendation to maintain or increase real wages in the bargaining process in future was made.

Employers’ and employees’ representatives also agreed on the need to develop a longer-term, four-year improvement of wage agreements, including a motion to merge the two types of minimum wages. According to this, the minimum wage for skilled labour should be agreed within the framework of sectoral agreements instead, although this is the weakest level, with low representation at present. To increase the coverage of sectoral collective agreements, several decisions and legislative amendments are needed, creating capacity and readiness for both workers and employers to conclude sectoral collective agreements. This could be developed in the VKF.

Social dialogue in general has been weak in Hungary since 2010, and the government has shown no willingness to improve this. The existing institutions are insufficient for conducting relevant social dialogue, except the wage negotiations on minimum wages. Amid the circumstances of a prolonged state of emergency in the legislative process in recent years (explained by the refugee crisis, COVID-19, and war in Ukraine), regulation through government decrees intensified and the involvement of the social partners further weakened.

Many aspects of the Labour Code have been affected by amendments from January 2023 to transpose EU directives, including those on transparent and predictable working conditions affecting working time (Directive (EU) 2019/1152). In addition to the transposition, other new rules concerned working time and rest periods and the postponement of approval of leave. The changes were not preceded by consultation, and the concerns of employee representatives were not heard.

Due to the high inflation, labour disputes aimed at inflation-compensating wage increases occurred. At Bosch Hungary, the desired wage increase was secured after a protest and warning strike. Vocal protests were also held in the public sector. The longest protest was for better working conditions and higher wages for teachers, which started in 2022. Instead of accepting teachers’ demands, in spring 2023 the government framed a ‘status law’ for teachers, which significantly changed their working conditions. In response to the teacher shortage, working hours were increased and the ability to strike curtailed. Protests were unsuccessful.

There were also protests in public services during 2023, including a two-day strike at the coach operator Volánbusz in December, demanding a wage offer for 2024. In Hungary, rules require the provision of a minimum level of services even during a strike, which diminishes the pressure power of trade unions (80% of services were running on the first day of the strike and 55% on the second day).