Hungary: Latest working life developments Q4 2018

Protests against a new overtime law, discontent over public sector layoffs, and disagreement over the outcome of wage negotiations are the main topics of interest in this article. This country update reports on the latest developments in working life in Hungary in the fourth quarter of 2018.

Overtime law elicits negative response from employees

In November 2018, a bill proposing far-reaching amendments to the Labour Code was introduced to parliament. The bill envisaged extending the maximum duration of the cumulative working time arrangement from 12 months to 36 months, provided that trade unions agreed to change the collective agreement to that effect. The bill also proposed extending the maximum overtime period to 400 hours per year (from 250 and 300 hours, respectively, per year, depending on the existence of a company collective agreement). This change to overtime hours could be implemented by the employer without the consent of any employee representation body.

The overtime bill was drafted in response to the country’s general labour shortage. Rather than facilitate a mass inflow of foreign workers, the government sought to let employers be able to request more overtime and more flexible working patterns from their existing employees.

The reaction of trade unions to the bill was overwhelmingly negative. If the 400 hours of maximum overtime is fully implemented, it will be possible either to extend each employee’s working day by more than one and a half hours or to make employees work for almost five hours every Saturday. The latter would mean the end of the five-day working week. As a result, the overtime bill was quickly dubbed ‘the slave bill’.

The bill was introduced as an individual motion, rather than a government proposal, which meant that it could be brought forward without prior consultation or impact studies.

In late November, the authors of the bill – two representatives from the governing party – met with trade union representatives and agreed to soften the bill. However, it became clear by early December that the final version of the bill would not differ substantially from the original version. [1] This led to demonstrations and roadblocks throughout the country. The number of demonstrators was significant (although not overwhelming), but the atmosphere of the demonstrations was unusually combative, especially after the bill was adopted by parliament. The wave of protests subsided during the Christmas holidays, but resumed in January 2019.

Tensions in the public sector fuelled by layoffs and new government law

A total of 3,400 employees lost their jobs in the mass layoff of central public administration personnel. The layoff, which affected staff within the ministries and their auxiliary institutions, had been announced in mid-August and was implemented in late October.

A lack of communication about the layoff, which was already perceived as unreasonable by the overburdened employees, caused a high level of tension. The government claimed that consultation was unnecessary because the need to reduce bureaucracy had been repeatedly acknowledged for several years and so the layoff was not unexpected. Shortly before the distribution of redundancy notices at the end of October, government and trade union representatives met, but the unions were unsuccessful in their efforts to obtain information about how workers would be selected for redundancy.

Tensions were further heightened by the adoption of a new law on government administration, which will be detrimental for the majority of government administration employees. Among other things, the law will cut the number of basic paid leave days by five for government officials without children. It will also introduce a centralised system of staff management, allowing the central government to decide unilaterally on the number of staff to be employed at governmental institutions and official bodies. This is likely to reinforce the present situation in which the remaining staff are burdened with excessive workloads. During consultations with the trade unions, only token concessions were made.

Trade unions split over wage negotiations

The negotiations over minimum wage levels in 2019 – led by the Consultative Forum of the Private Sector and the Government (VKF) – were marked by strong disagreements between employer organisation and trade union representatives.

The trade union confederations wanted the minimum wage level (€433 in 2018) to be increased significantly, until it was closer to the average minimum wage level of the other Visegrad countries (which were 11.5% higher than in Hungary in 2018). Employer organisations stressed that smaller firms were struggling to accommodate the rapid wage rises seen in recent years and offered a 5% rise in both the basic minimum wage and the guaranteed wage minimum for qualified workers, later revised to 8%. The unions rejected these offers and insisted on a higher rise.

Instead of making a unilateral decision to break the deadlock, the government convened another session of the VKF on 30 December. This time, two of the three participating trade union confederations – the Democratic League of Independent Trade Unions (LIGA) and the National Federation of Workers’ Councils (MOSZ) – signed a two-year agreement about raising both types of minimum wage by 8% as of 1 January 2019 and by another 8% as of 1 January 2020.

The third confederation, the Hungarian Trade Union Confederation (MASZSZ), refused to sign the agreement, claiming that the government had sided with the employers in the previous session.

Commentary

The unions held mass demonstrations on 5 January 2019 in many cities to protest against the so-called ‘slave bill’, and announced preparations for strike action. A new list of demands demonstrates the widening scope of the objectives of the trade unions: [2]

  • a general overhaul of the Labour Code, including the withdrawal of the overtime law
  • an overhaul of wages, including a double-digit rise in the minimum wage
  • an overhaul of the strike law and the return of substantive and regular social dialogue
  • more flexible retirement regulations, including the reintroduction of early retirement

Whether workers will be sufficiently motivated to strike remains to be seen. If not, then worker resentment is likely to express itself in a more familiar way: by a further increase in labour fluctuations and another wave of outward migration.


Footnotes

  1. ^ Mérce (2018), Nem engedett a Fidesz a rabszolgatörvény feltételeiből , 3 December
  2. ^ Index (2019), Megvan a szombati szakszervezeti tüntetés négy követelése , 3 January

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