SUMMARY OF LABOUR LAW CHANGES IN HUNGARY AS OF DECEMBER 12, 2011
ACT CV OF 2011 ON VARIOUS MODIFICATIONS OF THE LABOUR CODE
This act introduced several amendments, most of which are in favour of the employer, in the following fields:
Working time
According to the new rules, the employer may decide unilaterally, without the employee’s consent, whether to give extra payment for overtime, or let the employee take rest time as compensation.
The temporary rules that allowed for reallocating working time due to the crisis has been extended. It means that companies can operate on a reduced working time schedule (minimum of 36 hours/week), and then increase this beyond the normal maximum (to a maximum of 44 hours/week), when the economy picks up and workload increases.
Mothers returning from childcare leave
Under the new rules, mothers on childcare leave may accumulate paid vacation days only during the first 6 months of their childcare leave (originally there was no such limited period, the paid vacation days were accumulating during the entire term of the childcare leave). Also, the vacation days can be allocated within 183 days after the return to work (previously it had to be done within 30 days). What is more, financial compensation can be offered for these vacation days, which was not possible under the old rules.
Management positions
Normally, labour contract of persons fulfilling management positions can be terminated without any justification, with no regard to the periods “protected” against termination (i.e. sickness, pregnancy, childcare leave etc.). However, this provision was considered to be too unfavorable for pregnant women, and consequently amended. Under the new rules, in case of pregnant women in management positions, a justification for termination needs to be given.
Temporary agency work
The regulations on temporary agency work have been harmonized with the relevant directive (2008/104/EC), and as a result, it was clarified that temporary agency work is temporary in nature and therefore cannot last longer than 5 years. Furthermore, it was finally explicitly stated that foreign temporary agencies can send employees to Hungary (previously it was not explicitly stated, which caused a lot of confusion).
NEW LABOUR CODE
The text of the new Labour Code is hotly debated and is still being discussed, before it is submitted to the Parliament. We can only give definite information on its contents once it passes into law, which is scheduled to happen early next year, although this time schedule may seem slightly optimistic.
The points concerning the rights of trade unions, which are curbed by the proposal, are the most widely criticised ones. We summarise the most salient points of the planned contents of the Labour Code. In the coming months these rules are likely to change, but the text has yet to be submitted to the Parliament.
Amount of paid holidays per year
The new proposal significantly reduces the amount of holidays per year, it will start at 20 days per year, and between 25 and 50 it will increase 2 days every five years (instead of the current increase every three years), finally reaching a maximum of 30 days by the age of fifty-one.
Extra holiday is still due for the parents of children under 16. However, under the proposed rules, the parents can “divide” these days between them. Until now the parents had to decide which of them takes the extra days. In the first 6 months of employment, the employee cannot take holidays in his/her preferred periods.
Termination of an employment contract
The proposal reformulates the rules on termination and introduces a new terminology for termination with immediate effect. Moreover, the employer would no longer be under the obligation to give the employee the chance to defend himself against the complaints about his work performance, behavior etc., before terminating him on these grounds.
The current practice of “reinstating the employment” of an employee whose employment contract has been wrongfully terminated will cease to exist. Currently, at the time of judgment, the judge “reinstates the employment” of the employee (if he/she so wishes), and then his/her unpaid wages for the whole duration of the lawsuit will be payable. The proposal contains a right to indemnification, which is limited to a maximum of 18 months of the average salary of the employee.
Salary supplement
The new proposal completely rewrites the system of salary supplements: no supplement would be due for persons working several shifts, but all employees working at night would be entitled to a 15 % supplement (now it is 30 %). For work performed on Sundays, there would be a 50 % supplement, for work on national holidays, a supplement of 100 %.
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