Sectoral collective agreement signed in the construction industry

Three employers’ associations and two trade union federations in the industry signed the sectoral collective agreement on 16 November 2005. The agreement, which includes a wage tariff system as well, will come into force when the Minister of Employment and Labour promulgates his decision on extension.

The trade unions and the employers' organisations in the Hungarian construction industry started negotiations for a sectoral collective agreement in 1995. After a series of failures, a new impetus was gained when the sectoral bipartite social dialogue committee for the construction industry was set up within the framework of a PHARE project designed to strengthen autonomous social dialogue (HU0212106F). Another, and yet more important encouragement came from the government campaign called '100 steps' launched in June 2005, with measures to tackle undeclared work. (HU0506101N) The bargaining parties renewed negotiations to seal a sectoral collective agreement which, especially if it is extended to the whole industry, will be an important step in reducing undeclared work in the industry. (HU0506105F)

Following ten years of negotiations, finally three employers’ associations ((National Federation of Hungarian Contractors (Építőipari Vállalkozók Országos Szövetsége, ÉVOSZ), National Federation of Craftsmen Boards (Ipartestületek Országos Szövetsége, IPOSZ) and National Association of Entrepreneurs and Employers (Vállalkozók és Munkáltatók Országos Szövetsége, VOSZ)) and two trade union federations (Federation of Building, Wood and Material Workers’ Unions (Építő, Fa- és Építőanyagipari Dolgozók Szakszervezeteinek Szövetsége, ÉFÉDOSZSZ), and National Federation of Construction and Associated Trade Unions (Építőipari és Társult Szakszervezetek Országos Szövetsége, ÉTSZOSZ)) signed the sectoral collective agreement on 16 November 2005. The novelty of the agreement is that its clause stipulates that the agreement will come into force only on the date of the promulgation of the extension decision by the Minister of Employment and Labour, expected in mid-2006.

The new agreement envisages a wage tariff system with altogether 20 brackets for blue-collar and white-collar employees. As far as manual workers are concerned, gross monthly wage thresholds of HUF 63,000 (EUR 250), HUF 70,000 (EUR 278), and 80,000 (EUR 317) are set for unskilled workers, semiskilled workers, and skilled workers, respectively. These figures are slightly higher than the levels of the recently introduced three-tier national minimum wage system, negotiated at the same time as the sectoral agreement by the National Interest Reconciliation Council (Országos Érdekegyeztető Tanács, OÉT). (HU0512104F) Additionally, the sectoral agreement introduces a new bracket for skilled manual workers with 'master' certificate and requires a higher than HUF 100,000 (EUR 397) monthly wage for them. As a rule, the higher a worker’s educational attainment is the bigger is the difference between the agreement and the national minimum wage - especially in the case of white-collar employees.

Other major stipulations of the agreement regulate the issues of working conditions and the organisation of working time, especially ones that are characteristic for the industry, such as the definition of seasonal work, posting/transferring workers, working time account (reference period) and flexible scheduling of paid holidays. Also the agreement exploits the authorisation of the Labour Code to increase the amount of compulsory annual overtime hours.

The overall membership of signatory employer’s associations comprises 18,000 undertakings employing 140 to 150 thousand, while with the extension the agreement will cover the whole industry employing 309 thousand. According to a newspaper article, a similar agreement is expected to be concluded soon in the construction material industry, too.

This information is made available through the European Industrial Relations Observatory (EIRO), as a service to users of the EIROnline database. EIRO is a project of the European Foundation for the Improvement of Living and Working Conditions. However, this information has been neither edited nor approved by the Foundation, which means that it is not responsible for its content and accuracy. This is the responsibility of the EIRO national centre that originated/provided the information. For details see the "About this record" information in this record.

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