Increased demand for part-time work and ‘annualisation’ of working time

Current labour law in Hungary does not appear to offer sufficient flexibility for employers. There is greater demand for two main forms of flexible work organisation: part-time work and ‘annualisation’ (calculating working time over the year), the latter of which is a useful means of managing seasonal fluctuations. Typical sectors seeking greater flexibility are farming, food processing, construction, commerce, catering and tourism.

A 2004 study, A részmunkaidős foglalkoztatás elterjesztése és az éves munkaidő-elszámolás alkalmazásának lehetőségei a magyar gazdaságban (Possibilities of expanding part-time work and the use of annualisation of working time in the Hungarian economy ), investigated how an increase in part-time work and in calculating working time over the period of a year would affect the Hungarian economy. The study sought to identify current obstacles preventing a more widespread use of these flexible forms of employment.

Part-time work

Generally speaking, part-time work at a level of 5%-6% is much less widely used in Hungary than in the EU15 and other more industrially developed EU countries. During the transformation process experienced in Hungary in the 1990s, the country’s economy needed extensive development and this expansion required more full-time staff.

At the same time, sectors where short-term fluctuations offer a comparatively larger proportion of part-time work also experienced strong growth. The fluctuation of the daily turnover of a retail unit, for example (see table below), makes it a suitable model for part-time work.

Distribution of turnover in different periods of the day in retail units
Distribution of turnover in different periods of the day in retail units
Period of day % of daily turnover
Before 8 am 3
8-9 am 4
9-10 am 10
10 am-12 pm 15
12-2 pm 13
2-4 pm 18
4-5 pm 20
5-6 pm 13
After 6pm 4

Seres, A. (in email correspondence with the EWCO national correspondent for Hungary)

The study concluded that there is more opportunity for part-time work in a mass-market sales environment. In this case, the work process is routine, repetitive, does not require special skills or qualifications, and can be carried out with limited on-the-job training. There is less likelihood of employing part-time workers in jobs where the aim is to provide high quality consumer goods.

In companies investigated as part of the study, the ratio of part-time work was low even when short-term work fluctuations were typical in their economic activities, and when a larger proportion of part-time workers would have been potentially beneficial.

Adjusting to short-term fluctuations of market demand might be resolved most effectively by extensive implementation of part-time work for non-conventional working hours. However, this would require modernising the work organisation as far as part-time work is concerned, and could result in the ratio of part-time jobs increasing within the employment structure while that of full-time jobs may decline, without changing the overall employment level.

Employers may choose to: advertise for part-time workers for a specific job; employ two part-timers instead of one full-timer; or increase the volume of part-time work by turning a full-time job into a part-time one when full-time workers are shifted to part time.

Social and pension regulations within the Labour Protection Act, however, do not always encourage employers to create part-time jobs, as the corresponding contributions are not proportionate to the wages, and thus have a negative impact on business interests in job creation.

Annualisation of working hours

According to the Hungarian Labour Act, the eight-hour workday is the average working time within an eight-week timeframe. Notwithstanding this stipulation, company collective bargaining agreements can set it as a four or even six-month average. The exception is seasonal work, for which neither the four nor the six-month average is valid.

However, labour law sometimes makes it difficult to adjust work to the fluctuations in employment and economic activity within the range of one year. Without such adjustments, capacities are not used efficiently and labour costs increase because, at peak times, the workforce has to be expanded and paid overtime, while, during quiet periods, companies are forced to keep on staff surplus to their needs. Furthermore, hiring, training and dismissing temporary workers also incurs additional costs. Ultimately, the costs of production increase, efficiency indices deteriorate, and profitability and competitiveness decline.

There are a number of advantages to seasonal work in agriculture, for example:

  • work time can be adjusted to match actual work demand;
  • tractors and other pieces of farming equipment can be used to full capacity;
  • operation costs (heat, lighting, etc) can be reduced if workdays are kept short in winter;
  • labour costs go down as increased working hours during peak time reduce the need for overtime.

However, the National Union of Farmer Circles and Farmer Cooperatives (GGOSZ) argues that seasonal work benefits employers more than employees and that it shifts all the disadvantages to the employees.

Although the study suggests that the construction sector is another key area where current legislation on work organisation is becoming obsolete, the lack of definition of the term ‘seasonal’ raises numerous problems in this sector because, like farming, some of its activities are weather dependent.

The lack of annualisation of working time makes it more difficult to improve efficiency. If actual fluctuations occur at significantly different times than anticipated, it becomes impossible to plan the work schedule for the workforce. The greater flexibility enabled by calculating working time over the year would be beneficial in this regard.

To summarise, when businesses are seasonal in their nature, four or six-month time frames are too rigid to accommodate annual fluctuations or to adjust to changing market conditions. Generally speaking, businesses have outgrown the present labour law in many ways. It is likely that there will continue to be significant changes in the structure of employment status. Businesses will most likely combine various options of non-conventional forms of employment, and for a number of workers, the basic units of work may no longer be calculated by the day or the week.

Reference

Seres, A., A részmunkaidős foglalkoztatás elterjesztése és az éves munkaidő-elszámolás alkalmazásának lehetőségei a magyar gazdaságban, Munkaügyi Szemle 2004/6, pp. 11-15.

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