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Recent amendments of the Hungarian labour law

  • Hungary

    07-02-2019

    Recent amendments of the Hungarian labour law

    The rules of overtime work and the working-time banking period have been changed


    The Parliament adopted the amendments of the Hungarian Labour Code on 10 December 2018. Since then the modifying law has been often criticized and several demonstrations took place against its paragraphs pertaining to extended overtime work. The modifying law entered into force on 1 January 2019.
    In the following we highlight the most relevant changes effective as of 1 January 2019.

    According to the previous regulation, the upper limit of extraordinary work (most commonly used as ‘overtime work’) was 250 hours a year and based on a collective bargaining agreement this could be increased up to 300 hours – these were the maximum limits of overtime work and the employers were not allowed to order more than that, even if they had the employees’ consents to it. As per the new regulation, from 1 January 2019, it is possible to increase the overtime work up to 400 hours (from 250/300) per calendar year if the employee and the employer conclude an agreement on it. Meaning that plus 150/100 overtime work can be ordered by the employer if the employee gives his/her consent to the ‘voluntarily undertaken overtime work’. The agreement on the extended overtime work can only be terminated by the employee, effective as of the end of the calendar year – meaning that the employee will be bound by this agreement in the given year. The modifying law also states that the termination of this agreement cannot constitute a basis for the employer to dismiss the employee.
    The modifying law also affects the maximal extent of the working-time banking period. This might be used instead of standard daily working hours (= 8 hours per day on weekdays), and the aim is to allow for the employers to apply more flexible working-time schedule.

    According to the previous regulation, if the collective bargaining agreement allows, the maximum length of the working-time banking period could be 12 months. Now, with the coming into force of the amendment, the maximum length of working-time banking period can be extended up to 36 months, if this is stipulated in a collective bargaining agreement.

    The extension of maximum length of working-time banking period influences the date of payment for the extraordinary work exceeding that are available for the period. This might cause a disadvantage to employees, because the compensation for the extraordinary working-time exceeding the period must be paid only after the expiry of the working-time banking period, which can happen to be even a 36-months-long period. However, the rule which sets an average limit with overtime work, stating that the amount of weekly working hours cannot exceed 48 hours on a 12 months average (including the ordered overtime work) is still applicable, irrespective whether the employer applies a longer, e.g. 36 months-long working-time banking period.


    Definition of certain legal notions

    The modifying law clarified the notions of “working day” and “week”. Instead of the “employer’s operation” the “work schedule” became the basic legal concept when organizing the employees’ working hours. According to the new rules “working day” means a calendar day or an uninterrupted 24-hour period defined by the employer, if the beginning and end of the daily working hours can be organized on different calendar days according to the work schedule. ‘Week’ means a calendar week, or an uninterrupted 168-hour period defined by the employer, if the beginning and end of the daily working hours can be organized on different calendar days according to the work schedule.

    The modifying law also clarified the notion of “general work schedule” to facilitate the uniform interpretation of law. According to the general work schedule, the employer schedules the work for 5 days a week equally from Monday to Friday. Every other type of work schedule detailed in the modifying law will be deemed as unequal work schedule and the application or working time banking period or payroll period is needed.


    The minimum wage is raised

    As of 1 January 2019, the rates of minimum wage and guaranteed wage minimum were raised with about 8 percent. From 1 January 2019, the amount of minimum wage is HUF 149,000 and the amount of guaranteed wage minimum – payable to employees who are qualified to at least secondary school level and working in a position that requires such level – is HUF 195,000.


    Amendment of the Labour Safety Act and Labour Inspections Act
    The Hungarian Parliament has also amended the Labour Safety Act and the Labour Inspections Act as part of the employment legislative package. The new rules entered into force also on 1 January 2019.
    It is mentionable that according to a new provision of the Labour Inspections Act, in case the employment authority finds out as an outcome of a follow-up inspection that the employer has failed to comply with the authority’s obliging decision, the authority must impose a fine (up to HUF 10,000,000) and also order the execution of its decision.


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    Please contact your usual Eversheds contact for any additional information in this respect.

    Note: The above is intended only to provide general information. Therefore, the present summary is not a substitute for professional advice. Although it was prepared with due care and diligence, we are not responsible or liable for any mistake, incomplete information or opinion.

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    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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