Employment & Benefits, Hungary updates

'Slave act': changes to working time rules
Schoenherr
  • Hungary
  • 23 January 2019

In Hungary, as is the case in other EU countries, recent economic growth has been accompanied by a labour shortage. Under pressure to find a solution, the government introduced a new law to amend the working time rules. Since its adoption, the new law has come under close scrutiny from opposition parties and trade unions, and in December 2018 thousands of people took to the streets to protest what has become known as the 'slave act'.

How will new EU directive on work-life balance affect family-related leave in Hungary?
Schoenherr
  • Hungary
  • 19 September 2018

The European Commission has proposed to implement a directive on work-life balance for parents and carers which aims to increase the number of dual-earning families and help women return to work, while also requiring more flexibility from employers. Should the proposed directive enter into force, it will set minimum standards regarding parental and carer leave and will thus bring about considerable change for the Hungarian employment and social systems.

Decline in turnover as grounds for dismissal
Schoenherr
  • Hungary
  • 27 June 2018

Hungarian law generally requires employers to justify the termination of an employment relationship, and economic grounds generally serve as valid grounds for dismissal. A recent Supreme Court case clearly shows that even when an employer has a rightful interest in dismissing certain employees for economic grounds, the justification of the dismissal must be formulated correctly in accordance with the law. Otherwise, employers may have difficulties protecting themselves in court.

Use of electronic documents in employment relationships
Schoenherr
  • Hungary
  • 11 April 2018

With the constant development and advancement of digital technologies, the use of paper-based documents is gradually decreasing in all areas of life. This trend has inevitably affected the employment sector, as both employers and employees have an increasing need to reduce the volume of paper-based documents used in employment relationships. At the same time, the use of electronic documents has raised several practical questions.

Procedural aspects of equal treatment claims
Schoenherr
  • Hungary
  • 31 January 2018

The Supreme Court recently issued a reasoned opinion on certain legal and procedural aspects of employment-related suits involving equal treatment claims. The reasoned opinion addresses, among other things, the interpretation of the burden of proof in such suits, the equal pay principle, the concept of discrimination based on other grounds and the way of hearing and deciding anti-discrimination claims in suits initiated on the grounds of unlawful dismissal.

Incapacity to work – what can employers do?
Schoenherr
  • Hungary
  • 22 November 2017

Employers are often frustrated by employees' incapacity to work for health reasons, but they must act with care when addressing such situations. In an attempt to protect employee interests, legal regulations provide certain restrictions on what employers can do if an employee is unable to work for health reasons. A recent Supreme Court decision has further clarified some of these restrictions.

Intragroup transfers of HR data
Schoenherr
  • Hungary
  • 20 September 2017

Organisations with legal entities and employees in several EU member states often try to centralise their human resources (HR) functions to some extent, which occasionally requires them to share employee and HR data within their group. Although existing Hungarian law provides a stable legal environment with clear rules for employers as data processors, there is a general feeling of uncertainty around this topic, which is partly due to the upcoming entry into force of the EU General Data Protection Regulation.

Conflicts of interest in employment relationships
Schoenherr
  • Hungary
  • 28 June 2017

Although the Labour Code fails to define a 'conflict of interest', its general principles prohibit employees from engaging in conduct which could jeopardise their employer's rightful economic interests. Depending on the circumstances, a conflict may constitute a severe violation of the employee's employment terms and can be punished appropriately. In other cases, a conflict may arise that is not the employee's fault, which can therefore be appropriately rectified without penalties.

Consultation duties in event of collective redundancy
Schoenherr
  • Hungary
  • 12 April 2017

The existing Labour Code amended employers' consultation duties in the event of a collective redundancy. When the code entered into force, this change seemed technical and went somewhat unnoticed among other more significant changes. However, the change is important, as it simplifies employers' consultation duties in the absence of employee representative bodies. Simultaneously, the new rule's compliance with EU law has raised questions around how employers should act.

Workforce reorganisation under anti-discrimination rules
Schoenherr
  • Hungary
  • 15 February 2017

In Hungary, employers have significant freedom to change their organisational structure and reorganise their workforce, which includes dismissing employees. However, there are some limitations – both generally and in the context of anti-discrimination rules. Even if the courts respect employers' freedom in organising their workforce, employers must be careful not to exceed the limits of this freedom in order to prevent disputes.

New obligation for employers to elect work safety representative
Schoenherr
  • Hungary
  • 21 December 2016

A recent amendment to the Act on Labour Safety reduced the number of employees who can be employed at a workplace before an employer must elect a work safety representative from 50 to 20. Employers that are affected by the new regulation are advised to ensure that they comply with the requirements governing health and safety at work and elect a work safety representative.

Bonus claims: evolving court practice
Schoenherr
  • Hungary
  • 12 October 2016

Although performance-based compensation has long been an integral part of Hungarian employment law, neither the Labour Code nor the relevant commentaries provide a clear-cut definition of a 'bonus'. As a result, the definition and key legal principles governing bonuses have been developed by court practice, which shifted after the economic crisis and the adoption of the new Labour Code in 2012.

Common problems with non-compete agreements
Schoenherr
  • Hungary
  • 17 August 2016

While the conclusion of non-compete agreements or inclusion of non-compete clauses and other restrictive covenants in employment contracts is common practice in Hungary, a number of issues frequently arise – particularly in regards to statutory compensation, enforceability and unilateral termination. To avoid legal disputes, employers should carefully consider these issues before concluding non-compete agreements.

ECJ judgment shakes up fringe benefit framework
Schoenherr
  • Hungary
  • 22 June 2016

Under the Hungarian fringe benefit framework (the so-called 'cafeteria system'), employers offer employees a choice of different benefits of a set value, which are subsidised by the state and therefore beneficial to both parties. Several amendments to the system are planned, mainly due to a potential amendment to the personal income tax laws and a recent European Court of Justice judgment, which held that the system violated EU law.

Employer representation – who is entitled to communicate dismissal?
Schoenherr
  • Hungary
  • 20 April 2016

Considering the importance of unilateral declarations and commitments in the employment relationship, Hungarian labour law sets out detailed rules regarding the representation of the employer when making such declarations. While the previous legislation raised certain practical issues in this regard, the new Labour Code provides greater freedom for employers in establishing the system for exercising their rights through representatives.

Balancing the right to employer control with employee privacy concerns
Schoenherr
  • Hungary
  • 02 March 2016

Hungarian labour law provides employers with the right to monitor employees' behaviour and actions, provided that such monitoring pertains exclusively to employees' work. The law affords employers a significant degree of flexibility in this regard, but careful consideration of the company's needs and thoughtful legal analysis are required before implementing surveillance systems.

Can overqualification constitute valid grounds for dismissal?
Schoenherr
  • Hungary
  • 27 January 2016

Employing overqualified employees has long been a source of debate among human resources (HR) professionals. However, overqualification has recently become a more prominent issue due to the growing number of graduate workers and the pace of technological development. Several practical HR aspects must be addressed when employing overqualified workers, which often give rise to legal issues.

Restrictions on use of temporary staff agency workers
Schoenherr
  • Hungary
  • 09 December 2015

The use of temporary agency workers is particularly popular among employers whose workforce needs fluctuate or which require employees for short-term or seasonal jobs. As a general rule, employers may employ an unlimited number of agency workers for any job position, for a period of up to five years. However, the law imposes certain restrictions and prohibitions on the use of temporary agency workers.

Unlawful dismissal – additional damages claims after binding court decision?
Schoenherr
  • Hungary
  • 30 September 2015

The 2012 Labour Code introduced significant changes concerning the compensation to be paid by employers in the event of unlawful dismissal. As the previous regime put an unreasonably high burden on employers, the new Labour Code introduced a new penalty regime for unlawful dismissal. The Supreme Court has now issued an opinion addressing the most important questions relating to this new regime.

Labour Code changes related to Sunday work
Schoenherr
  • Hungary
  • 20 May 2015

A new act recently entered into force which introduced new rules governing the opening times of retail shops. The new act brings significant changes, including a prohibition against retail shops opening on Sundays. The new rules are intended to preserve employees' rights and allow them more time to rest, but have nonetheless provoked heated debate.

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