Hungary holds first meeting of its labour consultation council since election in May
Hungarian Minister of National Economy György Matolcsy has convened the National Interest Reconciliation Council (OÉT), a tripartite body representing employees’ and employers’ associations and the government, for the first time since the new government came to power in May. The council has not met for four months and the trade unions have been urging the government to convene a meeting, as many relevant changes in labour-related legislation have already taken place.
About the OÉT
Tripartite cooperation at national level has been a tradition since 1988 in Hungary although its form has changed several times. The current format was adopted in 2002 and called the National Interest Reconciliation Council (OÉT). The OÉT is the national forum for tripartite cooperation between workers’ and employers’ representatives and the government.
The OÉT provides a framework for consultations among social partners on economic, social, employment and other labour-related laws, as well as on underlying policies and political priorities. It is also the main forum for discussion on economic and social issues that are of national relevance and interest for the main players in the world of work. Its competencies and rights are set out in detail in its statute, while some aspects of its work are governed by relevant laws, including the Labour Code, the Act on Employment Promotion, the Act on Vocational Training and the Act on Labour Protection. Social partners have a fundamental right to information, consultation and consent.
Social partners call for council meeting
After the inauguration of the new government and during the summer of 2010, both trade unions and employers’ associations asked for a meeting of the council, as the previous one had taken place four months earlier (May 2010) and many relevant decisions had been taken by the government in the meantime. According to current legislation, the new government should convene a meeting of the OÉT within one month of inauguration, yet this government had been in office since the end of May.
At the beginning of September, the government finally launched a written consultation with its social partners on the future framework of the OÉT. Hungarian government spokeswoman Anna Nagy said the government wanted to replace the current system with a more efficient and streamlined one. Both the trade unions and employers refused to agree to any changes without consultation and asked for the OÉT to be convened as soon as possible. In response to their request, Minister of National Economy György Matolcsy announced the first meeting of the OÉT with the new government would be held on 22 September 2010.
Meeting attended by Prime Minister
It has been a tradition of the OÉT that the Prime Minister attends the first meeting after a national election. In this instance, Hungarian Prime Minister Viktor Orbán was accompanied by Minister of Public Administration and Justice Tibor Navracsics, Minister of Economy György Matolcsy and State Secretary for Employment Policy Sándor Czomba.
Prime Minister Orbán said the government’s focus was on job creation and reiterated its aim to create one million new jobs in the coming 10 years. He declared his general commitment to social dialogue but said the current form of representation, as well as agreements reached with the previous government, might be subject to change or amendments. He said the new government would not overrule any of these agreements automatically, but will examine them to ensure they meet the demands of voters. The Prime Minister warned that the government could easily amend the laws on the OÉT, but reassured the council that changes would not be imposed unilaterally. The government encouraged both partners to draw up proposals for amendments and reform of the current tripartite system.
Outlining the government’s plans, Mr Orbán said it wanted to make profound changes to the way labour and politics are conducted in Hungary, closing a chapter that has lasted 20 years and starting a new phase.
In concrete terms, this will mean reforming the current tax system which, according to the Prime Minister, is neither labour nor family friendly. To counter speculation about why the government delayed the OÉT meeting, he said that there had simply been too much work to do during the summer, leaving no space for consultation with social partners on a national level. The next plenary meeting of the OÉT, due to take place between 10 and 15 October 2010, aimed to discuss the state of the public budget and the tax system.
Reactions of the social partners
The Prime Minister’s speech was followed by remarks from representatives of the three main union confederations. The employees’ side did not formulate a joint statement, but each representative welcomed the green light given for the OÉT to start work. At the same time, they criticised the government’s failure to convene the council and meet social partners earlier.
István Gaskó, President of the Democratic League of Independent Trade Unions (LIGA), said many acts and decisions had been made by the government in the previous 110 days, on which it had failed to consult the social partners. This, he said, gave employees the impression that they had no chance to influence these acts. President of the Alliance of Autonomous Trade Unions (ASZSZ) János Borsik warned the government to respect the fundamental right to collective bargaining, and said there were no alternatives to negotiation, as the face-to-face exchange of views and information is extremely important and cannot be replaced by the publication of policy drafts on ministry websites. Péter Pataky, President of the National Association of Trade Unions (MSZOSZ), called on all parties to keep in mind the interests of the country, which are best served by the OÉT, as a unique forum to discuss and mediate between different interests and find appropriate solutions. According to him, the government is obliged to ensure the necessary preconditions for social dialogue and consult social partners not only on the law on the OÉT, but on the entire system of social dialogue. In conclusion, he said the message of this first meeting was that the work had finally started.
On behalf of the employers, Zoltán Zs. Szőke from the National Federation of Consumer Cooperatives (ÁFEOSZ) welcomed the legislative decisions taken by the government so far, including the reduction of corporate tax from 19% to 10% up to a taxable income of HUF 500 million (€1.8 million at October 2010). He agreed with the workers’ representatives that now is the time to begin real work and talk about wages, taxes and the budget. However, before that the social partners should be acquainted with the economic and financial expectations and plans of the government for 2011, such as inflation, revenue and related matters. Only once this background is provided, can negotiations about minimal wages meaningfully begin.
Ferenc Dávid, General Secretary of the National Association of Entrepreneurs and Employers (VOSZ), said he hoped the meeting was not an empty gesture from the government. He reminded the ministers that it had taken a long time to convene the OÉT and that it should now get to work as soon as possible.
After a long delay in convening the OÉT meeting, the social partners were quite happy with the information they received from the government. Based on the Prime Minister’s words, it appears there will be some fundamental changes in the structure and working of the council. The government did not deny its obligation to engage in consultations, but is definitely intent on changing the form and content of social dialogue. However, the forum will probably continue to exist in the present format until the adoption of a new Labour Code.
It is questionable whether the social partners will be able to exert any real influence on government decisions – the new government has an overwhelming majority of two thirds in the Hungarian parliament, and its warning that it can make any changes it finds compliant with the ‘will of the voters’ should be heeded.
The Prime Minister has already said on several occasions that he and his party understand social dialogue as a dialogue taking place among different social groups, but not exclusively as a dialogue between employers and employees. The Hungarian government should therefore be monitored carefully, to ensure it continues to observe European laws on information and consultation when changing the constitution, Labour Code and other laws.
Máté Komiljovics and Ildikó Krén, Solution4.org