19/Jul/2023
A new Hungarian law requires the introduction of an internal whistleblowing system for specific employers. In this newsletter we summarise the most important information on this.
The law allows all entities to set up an internal whistleblowing
system. Employers with 50 or more employees must set up a reporting system until 17 December 2023. Employers with up to 250 employees and employers that are subject to the Act on the Prevention
and Combating of Money Laundering and Terrorist Financing must have an
internal whistleblowing system in place until 24 July 2023.
The internal whistleblowing system is a legal and
organisational forum, which shall be completely independent of the entity. By
using the system, whistleblowers can lodge complaints about the operation of
the company or their legal relation with the company in a manner that complies
with GDPR rules and protects the identity of the whistleblower.
The system may be operated by a designated person or
department within the employing company who cannot be instructed concerning
this activity, or by a whistleblower lawyer or other external organisation.
The above requirement is in line with relevant EU
legal trends and international trends; several multinational companies
currently have such a whistleblowing system in place, but this shall be
operated in accordance with mandatory Hungarian legal requirements. The
competent government agency will monitor compliance with the requirements for
the establishment and operation of the whistleblowing system.
Once a notification is received by the whistleblowing system,
the designated body has 30 days to investigate it, which may be extended if reasonably
justified. The employer shall ensure that the infringing situation and the
reasons for it are remedied and that any damage related to this is also remedied.
*
This summary is intended to
raise awareness and does not constitute legal advice.
If you have any questions or
need further information, please do not hesitate to contact us.
30/Jan/2023
- CHANGES CONCERNING HUNGARIAN EMPLOYEES
As of January 1st 2023, the minimum basic salary of full-time employees has been increased to HUF 232,000. In accordance with this, the minimum of the contribution payment has been increased to HUF 69,600. Based on these numbers, the social contribution has to be paid after HUF 69,600, at the lowest.
Another change, which came into force on the 1st of January is that if an employee is being employed at a place and by an employer that differs from the one written in her/his employment agreement, or if she/he is under secondment, the original employer determined in the employment agreement remains the official employer of the employee, even if the employee, based on the agreement of the parties, receives her/his salary, and bonuses from the employer at the temporary workplace.
- The amendment states that those properties that had their function converted shall be deemed new properties in addition to those that are already new properties by virtue of the law. Based on this, the sale of a converted property is not VAT free anymore, the seller is obliged to pay VAT after the sale in cases where the statutory certificate stating the conversion is not older than 2 years. Reduced VAT of 5% for the sale of brand-new property is in force until December 31st 2024 (in special circumstances until December 31st, 2028), after that the general 15% VAT shall apply.
- In the case of installation and construction works the reverse charge of VAT will become applicable even if the conversion is subject to other form of statutory authorization other than construction permit and simple notification requirement.
- The requirements of data collection in regards of receipt data will now expand to the receipts issued by methods bound to the permit of the authorities and the technical methods that differ from using a cash register.
- The rules of reverse charge will remain in use until December 31st, 2026 regarding selected cereal products, the sale of steel industry products and the granting of the right to emit greenhouse gases (emission allowance).
- TRANSFER OF PROPERTY BETWEEN RELATED UNDERTAKINGS
Based on the amendment, from
now on, only those transfers will be free of duty in which the acquiror’s net income in the previous
tax year derives from the leasing, operation, or sale of their own property at
least in a 50 % ratio.
We would like to emphasize that the legislation summarized above has
differing dates for when they come into force.
The amendment of
the accounting law (based on the 2021/2101 directive of the European Parliament
and of the Council) obliges specific companies to draw up, publish and make
accessible a report as follows:
- Ultimate parent undertakings and
standalone firms governed by their national laws, shall draw up, publish and
make accessible a report on income tax information if the consolidated revenue
on their balance sheet date exceeded for each of the last two consecutive
financial years a total of EUR 750 000 000, as reflected in their
consolidated financial statements, as regards the latter of those two
consecutive financial years.
- Member States shall provide for an
undertaking to no longer be subject to the reporting obligations set out where
the total revenue on its balance sheet date falls below EUR
750 000 000 for each of the last two consecutive financial years as
reflected in its financial statements.
By definition an ultimate parent undertaking is the highest
parent investment firm undertaking of the investment firm licensee or the holding
company whose predominant investment are shares of the investment firm(s)
(wherever established) that is not itself the subsidiary of another
undertaking, while a standalone undertaking is an undertakingwhich
is not part of any group.
*
This summary is intended to
raise awareness and does not constitute legal advice.
If you have any questions or
need further information, please do not hesitate to contact us.
28/Nov/2022
The Hungarian government has introduced a new regulation on the rate of late payment interest, which entered into force on 10th November, 2022.
The
payment on default interest is regulated in the Hungarian Civil Code (Act). Pursuant
to the rules applicable in the absence of the parties’ deviating agreement, the
rate of the late payment interest, depending on the currency of the debt, shall
be calculated as follows:
- the base rate of
the Central Bank of Hungary applicable on the first day of the calendar half
year affected by the default increased by 8%;
- if the debt is in foreign currency, the base rate set for the relevant currency by the
issuing central bank increased by 8%;
- if the bank issuing the foreign
currency has no base interest rate, then the interest rate of the financial
market increased by 8%.
It
is very usual that the parties agree on a different default interest’s rate,
eg. we often see stipulated the double of the base rate applied by the Central
Bank of Hungary.
The
obligor shall be required to pay default interest, even if the pecuniary debt
was otherwise interest. When calculating the late payment interest, the central
bank’s base rate applicable on the first day of the calendar half-year in which
the first day of the delay falls shall be taken into account as a starting
point, and thus, if the default lasts for a longer period, the rate of the late
payment interest may change each calendar half-year, depending on the actual
applicable central base rate.
Compared to the rules mentioned above, from 10th November the late payment interest rate is maximised at 25%. The government decree states that the late payment interest – irrespective of whether it was based on the law or the agreement of the parties – may only be 25% at maximum, and all the exceeding rate above the 25% should be seen as if the parties had not agreed upon it at all.
We would like to emphasize that this regulation has only a temporary effect, during the period of state of danger determined by the Hungarian parliament. Currently the end of the state of danger period shall be 1st of December 2022, if it will not be extended.
*
This summary is intended to
raise awareness and does not constitute legal advice.
If you have any questions or
need further information, please do not hesitate to contact us.
16/Mar/2022
1. THE
RIGHTS AND OBLIGATIONS OF THE EMPLOYER
Under the current regulations,
working from home – in legal terminology, “teleworking” – can be
legally continued if it is stated in the employment agreement or if the
employment agreement is amended accordingly
When regulating telework, the
parties shall regulate the following circumstances in particular:
- They must agree
on how much of the employee’s working hours will be carried out by teleworking,
and also by what means. If the work is carried out using the employee’s
equipment, the employer must inspect the equipment whether it is suitable for
safe and healthy work.
- The parties may,
but are not obliged to, specifically stipulate a place of work other than the
employer’s premises.
- The parties must
specify the proportion of teleworking.
- The parties must
define the extent of the employer’s power to give instructions: this may cover
only the tasks to be carried out, but also the scheduling of working hours.
- It must be addressed
how the employer will monitor the employee’s performance: 1) the
employer does not want to monitor it; 2) the employer monitors it by
using IT tools; or 3) the employer personally monitors the employee at
the place where he or she works by teleworking (for example, at home).
- The parties must
agree on the term of teleworking (fixed or flexible working hours).
2. CRITERIAS OF WORKING ENVIRONMENT
It
is crucial that the workplace is properly enclosed, clean, and free from
distractions. Sufficient space must be available to carry out the working tasks.
An adequate monitor-eye distance is important, ideally it is about 50-75 cm depending
on the screen diagonal. The top edge of the monitor should be at eye level or
slightly below. It is also required, to have sufficient space for working (at
least 2-4 m2), which also allows free movement as well.
3. SAFETY REGULATIONS
Emergency procedures have a great importance in connection with telework. In the event of an emergency, employees shall be able to leave the workplace quickly and easily, and first-aid kits must be easily accessible.
Regarding electronic safety, it is important that all connection cables are in good condition and positioned in such a way that there is no risk of slipping or tripping over them. Wires and cables shall not be damaged or destroyed. The electronic outputs shall not be overloaded.
Regarding fire protection, it is important that all storage surfaces are designed to minimise the risk of fire and spontaneous combustion; laptop and PC vents shall not be blocked. Printers, laptops, PCs and other electronic equipment shall be protected from foreign intrusions, in particular from ‘attacks’ by pets and children.
*
This summary is intended to raise awareness and does not constitute legal advice.
We are standing at your disposal in preparing the amendment of the employment contract regarding teleworking and the related regulations. We trust that the above was of assistance to you and remain at your disposal for the case of any further queries.
19/Nov/2021
Due to the continuous development of technical
possibilities and the emerging epidemic situation, the use of various
electronic services, including electronic signatures is becoming more and more
popular.
In our newsletter we provide information about the possibilities and conditions of validity of electronic signatures.
Due to the epidemic, we have a limited number of different travel options, and we also have to reckon with significant costs during a longer business trip. These circumstances are holding back the momentum of business. An electronic signature can be of great help in bridging this problem. Its use can facilitate everyday business, but there are strict conditions for the validity of a signature, as the signature is not technically personal, so the provability of that the electronic signature was actually placed on the electronic document by an authorized person is particularly important.
| The uniform EU regulation defines three types of electronic signatures: (i) electronic signatures, (ii) electronic signatures with advanced security, and (iii) qualified electronic signatures. The three different categories mean different degrees of security of the electronic signature, to which the Hungarian regulations assign different probative force. Thus, in the case of a document with a qualified electronic signature, the courts presume that the document was signed by the person named in the signature, while in the case of a simple electronic signature, the document is only considered as written, but is not associated with the legal effect of a private document with full probative value. The reason for the differentiation is the usability in different situations; for example, an electronic signature with advanced security may be appropriate for issuing a statement within an organization, but the use of a qualified electronic signature may be required towards third parties. |
| In order to enable an executive officer of the company to sign in the name of the company, by an authorised electronic signature, it is necessary to register the electronic signature of the given person at the court registry. |
| Pursuant to the relevant law, in connection with the entitlement of authorised signature in the name of a company the registration of the specimen of signature of the executive officer or the enpowered person shall be issued by the public notary for the traditional (paper-based) representation of a company by authorised signature. For this a submission of a specimen of signature countersigned by an attorney-at-law is adequate as well. |
In connection with the recording of an electronic
signature, the preparation of the specimen of the electronic signature is
required under current legislation, which can only be made by a public notary.
Based on this, at the request of the company, the Company Register may also
contain the specimen of the electronic signature of the person entitled to
register the company, which certifies that the given certificate is an authorised
electronic signature. It is important to emphasize that an electronic signature
is only considered as authorised signature after it has been registered in the Company
Register.
In the framework of the uniform regulation of the
European Union, a specific register lists the service providers that are
mutually recognized by the Member States for cross-border authentication, so
that electronic signature services provided by these service providers even provides
opportunity for electronic court registration, subject to appropriate court
proceedings; thus, in the course of company proceedings in Hungary, even a
qualified electronic signature provided by a trust service provider governed by
the law of another Member State may be used. The list of these service
providers is available at https://webgate.ec.europa.eu/tl-browser/#/. In
Hungary, three service providers provide qualified electronic signatures, these
are NISZ Zrt., Netlock Kft., and Microsec Zrt.
The registration of an electronic authorised signature
of a company therefore requires three steps: 1. concluding a contract with the
appropriate service provider; 2. preparation of an electronic specimen of
signature certified before a public notary; and 3. conducting the registration
procedure at the Court Registry.
The possibility of electronic signatures and company signatures greatly facilitates the stationary case management and the uninterrupted course of the proceedings caused by the epidemic situation.
*
This summary is intended to
raise awareness and does not constitute legal advice.
If you have any questions or
need further information, please do not hesitate to contact us.
17/Nov/2021
On order to protect the working places against COVID
pandemic, the Hungarian Government gave the right to require vaccination as a
working condition from the employees by the Government Decree 598/2021. (X.28).
In our newsletter we provide information about the most
important rules of the new Government Decree.
1. THE
RIGHTS AND OBLIGATIONS OF THE EMPLOYER
The
employer may prescribe the vaccination to those employees who have not been
vaccinated yet as a precondition of performing work. The employer must take
into account the conditions of the working place and the scope of activities of
the employment when prescribing this obligation. In our interpretation, this
provision should be interpreted in a way that the conditions of the working
place and the scope of activities of the employment have to establish the
justification of prescribing the vaccination.
The minimum term given for the vaccination
must be at least 45 days for taking the first dose (or in case of single dose
vaccines, for taking the vaccine). The employer must notify the employees on
the consequences of failing to be vaccinated in the prescribed term, together
with the term given for the first vaccination.
If
the employee does not vaccinate herself/himself in the prescribed time and the
employee is not exempted, the employer is entitled to allocate non-paid holiday
to the employee. After one year, the employment relation may be terminated, if
the employee does not prove that he/she has complied with the vaccination
obligation during this term.
2. THE
RIGHTS AND OBLIGATIONS OF THE EMPLOYEE
The
employee is exempt from the vaccination obligation (if prescribed by the
employer) if the vaccination is medically contraindicated, and this is
strengthened by a medical expert opinion.
This
expert opinion must be given by the employment health doctor competent by the
seat of the employer or in the absence of this, the doctor who is entitled to
verify the medical conditions of the employee in connection with her/his
working activity. Solely in the absence of these, the family doctor of the
employee may give the medical expert opinion.
The employee
shall certify the vaccination by presenting (together with her/his ID) any of
the following documents:
- European
Digital Covid Certificate;
- Hungarian Immunity Card (“védettségi igazolvány”);
- certification by the vaccinating doctor on the form of the National
Public Health Center (“Nemzeti Népegészségügyi Központ”);
- International Vaccination Card of the WHO;
- Immunity Certification of any country, which is approved by Hungary (the
list of this countries is given in the Decree of the Hungarian Foreign Ministry
and the Ministry of Defence).
*
This summary is intended to
raise awareness and does not constitute legal advice.
If you have any questions or
need further information, please do not hesitate to contact us.
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