Telework in Hungary

Currently, the proportion of teleworkers in Hungary is modest, and only slowly increasing. Hungary has implemented the EU framework agreement on telework – concluded by the European social partners in 2002 – through legislation pertaining to the employment relationship; however, the majority of teleworkers are self-employed. Over the next two years, the government intends to offer EU-funded subsidies to encourage job creation in telework.

Definition

In Hungary, the official definition of telework relies very much on the language of the labour law and is incorporated in Act XXVIII of 2004 amending the Labour Code of Hungary and other employment-related acts (HU0410101F). The definition concerns the criteria of qualifying the teleworker rather than telework as an activity; however, the proportion of self-employed teleworkers – that is, having a commercial or civil law contract with an employer – in Hungary is high even by international standards.

In late 2005, the tripartite Telework Council (Távmunka Tanács) initiated the drafting of a so-called White Paper to promote telework. The paper, based on social and civic dialogue, calls for a wider definition of e-work – in other words, to expand its frame of reference from being solely within an employment relationship to various more flexible forms of work using telecommunication tools.

Prevalence of telework

The Hungarian Central Statistical Office (Központi Statisztikai Hivatal, KSH) does not publish data on telework due to the low number of respondents. Nevertheless, since 2002, some questions on telework have been included in the regular questionnaire of the Labour Force Survey (LFS) to keep track of the development of telework. However, evidence based on this large-sample survey should be used and interpreted with caution.

The data outlined below refer mostly to 2004, as KSH has not yet published more recent data on telework. Although based on a far smaller sample, data from 2005 regarding telework penetration are available from the Fourth European Working Conditions Survey (EWCS).

Number and proportion of employees involved

In 2004, the estimated number of teleworkers was 36,000 persons, 60% of whom were men and 40% women. Surprisingly, the breakdown of teleworkers by age corresponds to the proportions for the total employed population.

In the same year, teleworkers – full-time and part-time – represented 2% of the total employed population, or 2.1% among male workers and 1.8% among female workers. Since unemployment was moderate, the proportion of teleworkers in the actual workforce is slightly lower. According to estimates from the 2005 EWCS, 3.1% of the Hungarian workforce carried out ‘telework from home with a PC’.

Influence of occupation and qualification level

The most significant difference between teleworkers and the total employed population is that telework is very much concentrated in non-manual occupations: 20% of teleworkers are senior officials and managers, compared with 7% of the total employed population, and a further 32% of teleworkers are professionals, compared with 13% of the total employed population. Some 10% of teleworkers are clerks, which is about the same as the proportion for the total employed population.

Half of the teleworkers have a higher education, compared with 20% of the total employed population. This percentage is more or less the same among men and women. A significant difference is found in terms of low qualified labour – that is, those who have completed primary school, meaning only eight years of education or less: hardly anyone with a low education level works as a teleworker.

Main sectors using telework

More then half of teleworkers work in the services sector, and 13% of them work in manufacturing. Among the different service branches, the most important areas are: real estate and various business service activities (which employ 19% of all teleworkers); trade (11%); education (10%); and public administration (9.5%). A large difference arises among the sectors with regard to the gender distribution of teleworkers: the proportion of male teleworkers is considerably higher in manufacturing, while more female teleworkers are found in education, health and social work.

Another significant finding is that self-employment is overrepresented in telework. The share of self-employed people is twice as high (about 30%) among teleworkers – particularly among men – as in the total employed population. In an international comparison, based on the Statistical indicators benchmarking the information society (SIBIS) survey of 2002 and 2003, telework penetration in Hungary shows an average proportion among self-employed people while it is lower than the international average among other employment status groups.

Trends since 2000

Currently, the proportion of teleworkers is moderate and is increasing slowly. According to the LFS, the first pilot survey was conducted in 2002 when the share of teleworkers (full-time and part-time) was over 1% of the total employed population. In 2004, the proportion was somewhat less than 2%.

To give some indication of the latest developments, KSH has published new data on internet use. In September 2007, a 40% increase was recorded in the number of broadband internet subscribers, compared with 2006, with the total number of subscribers reaching 1.7 million persons. The statistics do not reveal the proportion of teleworkers among the subscribers; however, low internet penetration was viewed as one of the reasons for an undeveloped state of telework in Hungary. At least the country’s underdeveloped infrastructure has improved by now.

Regulatory framework

Hungary is among the few countries to have implemented the 2002 European framework agreement on telework (107Kb PDF) through legislation. The reason for this was the widely held belief that the low penetration and spread of telework was due to the lack of appropriate regulation by law. The ‘telework lobby’ strongly supported legal regulation. However, the main contradiction in the new legislation is that telework is regulated as an employment relationship on the basis of the labour law, although teleworkers are not necessarily employees. In fact, some hidden disagreement lies behind the regulation of the legal form of telework: the Ministry of Social Affairs and Labour (Szociális és Munkaügyi Minisztérium, SZMM) supports the labour relation concept, while other ministries developing e-programmes support other forms of telework/e-work.

Voluntary aspect of telework not included

All aspects of telework are regulated, such as covering costs, compensation and efficiency, working time, health and safety at work, and data confidentiality; however, the spirit of a voluntary agreement is missing. Neither the voluntary character nor the reversibility of telework – which feature in the EU framework agreement – were successfully incorporated in the law (HU0410101F).

The SZMM was involved in developing the regulation and focused on job creation by telework. Changing the form of work either into or from telework was outside the scope of the regulation because it was basically perceived as a regular modification of the employment contract. In addition, the EU framework agreement refers to the question of modalities of reversibility to collective agreements and the law cannot regulate individual employment contracts, by definition. In the Hungarian regulation, hardly any reference is made to the importance of social dialogue and collective agreements. The final language of the Hungarian legislation – as in the case of part-time work – is rather soft: the employee can request a change of work contract for personal or family reasons, but all the employer has to do is make a decision and reply in written form within 15 days (Section 192/E, Paragraph 3 of the Labour Code). The safety of workplaces in cases of telework – that is, in terms of working with computers – was not specifically addressed.

New funding to promote training and job creation in telework

In early 2000, before the legal regulation, some government subsidy programmes were launched with limited success to encourage telework; such measures were introduced as a means of creating new jobs and to promote the employment of unemployed persons belonging to various disadvantaged groups – such as disabled people, women with small children, Roma and those living in rural areas.

By 2007, the promotion of telework was still viewed mainly as a type of public policy initiative for tackling problems in employment through providing employers with subsidies. This was the main message of the annual National Telework Conference held in December 2007, which involved the participation of high-ranking politicians. The only innovation in funding projects in telework is that, for the coming two-year period, the government promises to use EU funds to match the labour market supply and demand of teleworkers, as well as for telework-related training, organisation and communication. The latter includes efforts to convince potential employers that their control over employees carrying out telework can be maintained, although technology will substitute the traditional face-to-face methods of control at the traditional workplace.

Nonetheless, wage subsidy remains central to the incentive projects over the next two years. According to the announcement at the conference, the government wishes to increase the proportion of teleworkers in the total workforce up to 8%–10% by 2015. In the framework of the new project – jointly managed by the Telework Council and the Employment and Social Office (Foglalkoztatási és Szociális Hivatal, FSZH) – some HUF 13 to 15 billion (€51 to €58 million, as at 25 January 2008) will be spent on encouraging 600 undertakings to create some 8,000 jobs for teleworkers in the coming two years.

Employment and working conditions

Little information is available on working conditions for teleworkers, as no specific employment conditions for teleworkers have been defined. If telework is a significant part of the company strategy, involving a considerable number of teleworkers, those workers are more likely to have access to training programmes. In the early telework programmes in 2000, training in computer skills was financed through state subsidies. In terms of health and safety, teleworkers tend to be less protected than other workers are, except for some large, mainly multinational, companies. In theory, teleworkers have the same collective rights as employees working at the employers’ premises.

Views of social partners and government

No clear picture emerges regarding the position of the social partners on the issue of telework. Trade unions and interest groups in telecommunication-intensive sectors oppose the rigid regulation introduced through legislation. Meanwhile, trade unions of public sector employees – for example, the Trade Union of Hungarian Civil Servants and Public Service Employees (Magyar Köztisztviselők és Közalkalmazottak Szakszervezete, MKKSZ) – are in favour of legally regulated telework to ensure employees’ safety.

Ágnes Hárs and László Neumann, Institute of Political Science, Hungarian Academy of Sciences

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