Victorious MSZP promises comprehensive reform of industrial relations system

Following Hungary's April 2002 election, the victorious Hungarian Socialist Party (MSZP) is forming a coalition government with the Alliance of Free Democrats (SZDSZ). MSZP's campaign programme promised a comprehensive reform of the Hungarian industrial relations system, which includes revoking almost all of the controversial decisions to abolish a number of institutions taken by the previous right-wing government. The MSZP programme consists of four major package, which aim to: reinforce the state institutional network dealing with labour market issues; reconstruct the national-level tripartite social dialogue; reinforce the sectoral social dialogue and collective bargaining; and strengthen the position of workplace-level trade union sections.

In the parliamentary elections hold in April 2002, the conservative right-wing coalition government led by Viktor Orbán was defeated and the victorious Hungarian Socialist Party (Magyar Szocialista Párt, MSZP) is now forming a coalition government with the liberal Alliance of Free Democrats (Szabad Demokraták Szövetsége, SZDSZ). The MSZP campaign programme promised a comprehensive reform of the Hungarian industrial relations system, which, in part, will revoke almost all of the controversial decisions taken by the previous right-wing government in order to tear apart the web of 'neocorporatist'-style institutions set up in the wake of democratic institution-building in the 1990s.

The MSZP programme consists of four major packages, aimed at: reinforcing the state institutional network dealing with labour market-related issues; reconstructing the national-level tripartite social dialogue; reinforcing the sector-level social dialogue and collective bargaining; and strengthening the position of workplace-level trade union sections.

State institution-building

In the field of state institution-building, the most important measure in the MSZP programme is the re-establishment of the Ministry of Labour, which was disbanded by the previous Orbán government. The new ministry will be responsible for overseeing labour market policies and developing a social dialogue. The program also envisages the strengthening of the Labour Mediation and Arbitration Service (Munkaügyi Közvetítő és Döntőbirói Szolgálat, MKDSZ) by introducing a compulsory mediation procedure before any strike action. There is a plan to set up a legal service which would provide legal assistance to citizens in general on various issues, including labour law. Furthermore, recognising the weaknesses of the social partners, MSZP intends to help create the financial and administrative context for tripartite and sector-level bipartite joint committees, and to contribute to the expenses of hiring experts on behalf of social partners represented in these bodies.

Reconstruction of national-level social dialogue

In the area of the national-level social dialogue, the MSZP programme envisages the reversal of all major measures introduced by the previous government. It promises to re-establish the tripartite Interest Reconciliation Council (Érdekegyeztető Tanács, ÉT) with an extended responsibility covering not only narrowly understood labour market issues, but all major policies having an impact on working life and the social situation of employees. Furthermore, the authority of the new ÉT will be extended to the conclusion of binding agreements over various issues. The Interest Representation Council of Public Institutions (Közalkalmazotti Érdekegyeztető Tanács, KIÉT) - the tripartite consultation body for the public sector - would also be re-established.

Furthermore, the programme promises to include employers’ associations and trade unions in regional development councils, the supervisory boards of social security (pension and health) funds, and a number of decision-making bodies in charge of education, training and retraining programmes. Unions will be involved in labour inspection and in controlling health and safety issues. Finally, a new bill will be drafted to regulate social dialogue procedures and rules on interest representation.

Facilitating sectoral social dialogue and bargaining

As for the sector-level social dialogue, MSZP promises to set up sectoral bipartite joint committees to conclude sectoral collective agreements. These joint committees will be provided with the necessary infrastructure, and monitoring activity will be organised so as to provide reliable data-sets for the social partners. Finally, through a planned relaxation of the rules on extension procedures for multi-employer collective agreements, it is hoped to increase the coverage of voluntary multi-employer agreements in their respective sectors.

Strengthening workplace-level union organisations

In the area of strengthening workplace-level trade union organisations, MSZP goes far beyond simply revoking amendments to the Labour Code in this area passed during the previous, right-wing dominated parliament. It envisages revising some of the basic legal principles of the Labour Code enacted in 1992. First, it promises to accept unions as representatives of all employees, not only of union members. As a consequence of this shift, the information and consultation rights of workplace-level union sections would also be extended. Unions will be granted co-determination rights concerning the use of company social funds, company-run welfare facilities, training funds and employees' career plans. In order to speed up local conflict resolution, mediation in individual legal disputes would be made a possibility.


Evaluation of the MSZP proposals indicates that they indeed break with the governing principles of the previous right-wing conservative government, which sought to dismantle the neocorporatist-style institutional network that emerged after the transition to democracy. The proposals promise to re-establish all major national-level tripartite bodies which have been disbanded, and seek to reintegrate employers’ associations and trade unions into a host of decision-making bodies and institutions dealing with labour market-related issues. The strengthening of the national-level social dialogue has been welcomed both by trade unions and employers' associations. However, a meaningful social dialogue is not only a matter of institutions, but also depends on the actual policy pursued by the government in the negotiations that take place in these institutions.

The programme goes beyond restoration and seeks to reshape the current trends towards decentralised collective bargaining by promoting sector-level social dialogue and collective bargaining. The proposed actions are in line with recent efforts to introduce the practices of sector-level social dialogue, supported by an ongoing project under the EU's PHARE programme.

The strengthening of workplace-level trade union organisations, which is a pivotal demand of trade unions seeking to underpin their workplace presence and to provide their workplace sections with more legal 'bargaining chips', seems to be the most controversial issue on the MSZP agenda. The repeal of some of the rights of local union sections by the 1992 Labour Code was underpinned by decisions of the Constitutional Court (Alkotmánybiróság). It is also not clear what would happen to works councils with their similar rights, introduced by the 1992 Labour Code. Moreover, this move is likely to meet with resistance from employers' associations in the tripartite negotiating process. (András Tóth and László Neumann, Institute of Political Science, Hungarian Academy of Science)

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