Working life in Hungary

Notes: Values for real GDP per capita are chain-linked volumes (based on 2010 data; €). The unemployment rate for men and women is the annual average as a percentage of the active population aged 15–74 years, and the youth unemployment rate is the annual average as a percentage of people aged 15–24 years. The employment rate for men and women is the annual average as a percentage of the active population aged 15–64 years, and the youth employment rate is the annual average as a percentage of people aged 15–24 years. GDP, gross domestic product.

Source: Eurostat [sdg_08_10], for real GDP per capita and percentage change 2012–2022; [une_rt_a], for unemployment rate by sex and age; [lfsi_emp_a], for employment rate by sex and age

Economic and labour market context

Between 2012 and 2022, Hungarian gross domestic product (GDP) per capita enjoyed robust growth (41.8%), and this growth rate was well above the EU average increase for the same period (15.3%). This led to record high employment levels, record high employment rates and record low unemployment rates around the final quarter of 2019. In 2020, as a result of the pandemic, GDP fell by 4.7% compared with 2019. Unemployment increased, most significantly for young people. However, strong economic growth returned in 2021 and much of 2022. As a result, the number of those in employment returned to the previous record level early in 2022 and reached a new high after that. The employment rate recovered quickly due to the decreasing working-age population. At the same time, the unemployment rate reached the pre-pandemic low (3.6%) in 2022. It should be noted, however, that the post-pandemic improvement was not uniform: the youth unemployment rate has never reached the pre-pandemic low. The post-pandemic recovery of the employment rate was faster for female than for male employees.

Legal context

The overall legal framework was fundamentally revised in 2011–2012. Act I of 2012 on the Labour Code (2012. évi I. törvény a munka törvénykönyvéről) regulates employment and labour issues in the private sector.

The legal framework of industrial relations has also been profoundly changed, primarily through the transformation of the institutions of national consultation and negotiation and by revising the role of and rules on collective bargaining as part of the new Labour Code.

Act VII of 1989 (on the right to strike) was also significantly amended in 2010 and 2012.

A major change to the regulation of working time was adopted through an amendment to the Labour Code in 2018 (2018. évi CXVI. törvény a munkaidő-szervezéssel és a munkaerő-kölcsönzés minimális kölcsönzési díjával összefüggő egyes törvények módosításáról).

During the COVID-19 pandemic, temporary provisions were enacted to allow deviations from the Labour Code and other legislation, namely to extend employers’ unilateral decision-making on issues such as the work schedule, reference periods and teleworking.

Further amendments to the Labour Code were adopted at the end of 2022 (Act LXXIV of 2022). These covered, most importantly, the regulation of paid leave, employees’ right to information on their working conditions (for example, work schedules) and the conditions for employees unable to perform their work obligations due to ill health.

Industrial relations context

Over the past two decades, Hungarian industrial relations have altered gradually from strong national tripartite cooperation to limited consultation only, from considerable collective bargaining coverage to a rather low and uneven ratio, and from new structures (such as works councils, sectoral dialogue committees and regional tripartite bodies) to fewer and weaker institutions. Meanwhile, social partners have been struggling to retain their members and to maintain their role in the economy and society. Governments have always had a significant political role in forming industrial relations, not only by setting the legal framework, but also as a partner with varying levels of commitment to working together with social partners, counting also on their autonomous contribution.

In the early 1990s, the then Labour Code (Act XXII of 1992) established a particular form of co-existence of works councils (for participation) and trade unions (for collective bargaining) in workplaces. They functioned in this particular scenario of interdependence until 2012 when the new Labour Code (Act I of 2012) amended their roles and powers while retaining their parallel presence, which brought about tangible changes to workplace relations.

In 2004, bipartite sectoral dialogue committees were introduced to address the weakest link in the industrial relations system, although there was no tradition of bipartite social partnership. Currently, they exist in 24 sectors/subsectors and are mainly engaged in discussing sector-related issues. Despite their well-developed legal and institutional framework, the main form of collective bargaining happens at enterprise level.

For many years, the National Interest Reconciliation Council (Országos Érdekegyeztető Tanács, OÉT), which has had different names in the past, provided a tripartite framework whose powers were virtually unchanged. Not only were the annual agreement on mandatory minimum wages and the recommendations on general wage increases concluded here, but the parties also negotiated on various economic issues. The Orbán government dissolved this central body in 2010 and replaced it with multipartite/tripartite structures with much more limited roles.

There was no change in the institutional set-up regarding industrial relations during or after the COVID-19 crisis. The government continued to ignore the social dialogue forums when making important decisions. During the pandemic, various provisions of the Labour Code were temporarily suspended – mostly to the detriment of employees – by government decree, without previous consultations with the trade unions. Similarly, the unions protested in vain against a number of provisions in the amendment of the Labour Code in December 2022.

Trade unions, employer organisations and public institutions play a key role in the governance of the employment relationship, working conditions and industrial relations structures. They are interlocking parts in a multilevel system of governance that includes European, national, sectoral, regional (provincial or local) and company levels. This section looks at the main actors and institutions and their role in Hungary.

Public authorities involved in regulating working life

Since the dissolution of the Ministry for Innovation and Technology (Innovációs és Technológiai Minisztérium, ITM) at the end of 2022, the key public authorities regulating working life have been the State Secretariat for Employment Policy within the Ministry for Economic Development (Gazdaságfejlesztési Minisztérium, GFM), from 1 January 2024 renamed the Ministry for National Economy (Nemzetgazdasági Minisztérium, NGM), the Deputy State Secretariat for Vocational Training within the Ministry of Culture and Innovation (Kulturális és Innovációs Minisztérium, KIM) and the Deputy State Secretariat for Public Works Programmes and Water Management within the Ministry of the Interior (Belügyminisztérium, BM).

At present, the Ministry for National Economy has overall responsibility for employment and labour market policy and strategy. It prepares the draft laws related to the world of work in general (including labour legislation and the legal framework for industrial relations and social dialogue). It represents the government in national tripartite and multipartite dialogue. In addition, the Minister for National Economy is entitled to make decisions regarding the extension of collective agreements to economic sectors if requested by sectoral social dialogue committees (ágazati párbeszéd bizottság) (see Act LXXIV of 2009, Article 4(2)(b)).

The Ministry of the Interior has a specific role in setting the legal and financial framework for public work programmes and in managing them through local government. Work-related health issues are the responsibility of the Directorate of Occupational Hygiene and Occupational Health within the National Public Health Centre (Munkahigiénés és Foglalkozás-egészségügyi Főosztály, Országos Közegészségügyi Intézet), overseen by the Ministry of the Interior.

The administrative and labour courts were courts of first instance until they were abolished on 31 March 2020 by Act CXXVII of 2019. The general successors are the courts with the same territorial jurisdiction as those of the labour courts. An alternative dispute settlement route has been provided by the Labour Consultation and Dispute Resolution Service (Munkaügyi Tanácsadó és Vitarendező Szolgálat, MTVSZ) since 2016. Unlike its predecessor – the Labour Arbitration and Mediation Service (Munkaügyi Közvetítői és Döntőbírói Szolgálat) – the MTVSZ takes the labour law approach as the dominant approach, and the most prominent procedure is counselling. The MTVSZ is organised regionally, with a strong local presence.

The National Employment Service (Nemzeti Foglalkoztatási Szolgálat) is currently overseen by the Ministry for National Economy, as is the area of occupational safety and health (OSH). The employment departments of the county-level (and Budapest) government offices operate a network of employment offices at district-level government offices. In addition, the labour and OSH sections of the Budapest government office and the country-level government offices serve as OSH inspectorates.

Representativeness

The representativeness of social partners at national level is not explicitly incorporated in Hungarian legislation. Nevertheless, the law on the main national civil dialogue body, the National Economic and Social Council (Nemzeti Gazdasági és Társadalmi Tanács, NGTT), sets out detailed criteria for the social partners’ participation in the NGTT. This is widely considered to function as a form of representativeness criteria at national level.

The NGTT was established by Act XCIII of 2011. The members of the NGTT (as of 2020) include 6 trade union confederations and 14 employer organisations. Other members are listed in the relevant tables below and represent the national chambers, the foreign chambers that operate in Hungary, science experts, art representatives and traditional churches. The NGTT cannot be considered a social dialogue body; instead, it is more of a symbolic consultative civil dialogue body without any negotiation function.

Union and employer confederations are invited to participate in the NGTT (according to Article 4 (8) of Act XCIII of 2011) if they meet the following set of criteria.

Union confederations are invited if they have:

• member organisations in at least 4 economic sectors and at least 12 subsectors
• member organisations in at least 8 counties (or member organisations with regional organisations)
• company-level organisations in place at a minimum of 150 employers

Employer confederations are invited if they have:

• member organisations in at least 2 economic sectors and at least 6 subsectors
• member organisations in at least 10 counties
• affiliated members or member organisations representing at least 1,000 companies or companies employing 100,000 employees in total

In the main tripartite social dialogue body, the Permanent Consultative Forum of the Private Sector and the Government (Versenyszféra és a Kormány Állandó Konzultációs Fóruma, VKF), no representativeness criteria are applied. The VKF is based on an agreement that does not refer to representativeness, but provides a list of the social partners involved, based on the parties’ mutual recognition. Three trade union confederations – the Democratic League of Independent Trade Unions (Független Szakszervezetek Demokratikus Ligája, LIGA), the National Confederation of Workers’ Councils (Munkástanácsok Országos Szövetsége, Munkástanácsok) and the Hungarian Trade Union Confederation (Magyar Szakszervezeti Szövetség, MASZSZ) – and three employer organisations – the Hungarian Federation of Consumer Co-operative Societies and Trade Associations (Általános Fogyasztási Szövetkezetek és Kereskedelmi Társaságok Országos Szövetsége, ÁFEOSZ), the Confederation of Hungarian Employers and Industrialists (Munkaadók és Gyáriparosok Országos Szövetsége, MGYOSZ) and the National Association of Entrepreneurs and Employers (Vállalkozók és Munkáltatók Országos Szövetsége, VOSZ) – participate in the VKF, all of which are also members of the NGTT.

Trade unions

About trade union representation

Under the Labour Code (Act I of 2012), every worker has the right to join – or not to join – a trade union in order to promote their economic and social interests (Article 231). The detailed rules on how this right can be exercised are set out in Act CLXXV of 2011 on the right of association, Act CLXXXI of 2011 on administrative procedures and the Civil Code (Act V of 2013). Public sector employees also have the right to organise, but their right to collective bargaining is limited (for public employees) or absent (for civil servants in public administration).

The unionisation rate in Hungary is around 7.4% (as of Q1 2020). Workplace trade unions are affiliated to various sectoral or regional federations and, through these federations (or sometimes directly), are affiliated to six national trade union confederations. Pluralisation is also found in workplaces.

The new Labour Code amended the rules on collective labour law, including modifications to the right to collective bargaining at company and higher levels.

The new Labour Code also gives works councils the right to negotiate and agree on working conditions (except wages or wage-related issues) if the employer has not yet concluded a collective agreement or if there is no trade union eligible to conclude one (Article 268(1)). An agreement concluded in this way is called a plant agreement (üzemi megállapodás). A plant agreement with this wider content is, however, not considered to be a collective agreement and is beyond the scope of mandatory reporting, even though parties may negotiate some of the content in the same way that they would if collective bargaining was in place (for instance, parties can agree on a longer working time reference period or more annual overtime). As there is no obligation to report plant agreements to the authorities, no information is available on the number and content of this type of agreement.

Trade union membership and trade union density, 2010–2021

Notes: * Proportion of employees who are members of a trade union. ** Trade union membership of employees derived from the total union membership and adjusted, if necessary, for trade union members outside the active, dependent and employed labour force (i.e. retired workers, self-employed workers, students and unemployed people). n.a., not available.

Main trade union confederations and federations

There are five trade union confederations at national level that are affiliated to the European Trade Union Confederation (ETUC) and one trade union confederation at national level that is not affiliated to the ETUC.

Formerly – with the exception of one – all of them acted on the worker side of the OÉT. Since 2011, five of them have been members of the multipartite civil dialogue forum, the NGTT, and the sixth became a member in 2016. In 2011, the Seventh Confederation was formed by a merger of the healthcare unions, the Democratic Trade Union of Hungarian Employees, Healthcare and Social Workers (Magyarországi Munkavállalók Szociális és Egészségügyi Ágazatban Dolgozók Demokratikus Szakszervezete, MSZ EDDSZ) and the Healthcare and Social Workers’ Union of Hungary, the trade union of Veszprém County Hospital (Magyarországi Dolgozók Egészségügyi és Szociális Szakszervezete, MDESZSZ), and it was later admitted as a member of the NGTT. At the same time, only LIGA, Munkástanácsok and MASZSZ participate in the VKF, the tripartite national body for the private sector.

The National Confederation of Hungarian Trade Unions (Magyar Szakszervezetek Országos Szövetsége, MSZOSZ) – which has now been integrated into MASZSZ – used to be the largest national organisation in terms of membership numbers. In 2020, it had 104,000 active members and around 150,000 members in other categories, such as pensioners and apprentices; LIGA comes a close second.

Main trade union confederations and federations

Since 2013, some of the national trade union confederations have been merging in response to the effects of the new Labour Code, the decline in social dialogue in general, the unfavourable political climate and a long-standing need for integration. The Alliance of Autonomous Trade Unions (Autonóm Szakszervezeti Szövetség, ASZSZ), the Trade Union Cooperation Forum (Szakszervezetek Együttműködési Fóruma, SZEF) and MSZOSZ announced their integration on 1 May 2013, but later SZEF backtracked. In 2014, ASZSZ and MSZOSZ merged as MASZSZ, creating in effect the country’s largest confederation.

National trade union confederations are not directly involved in collective bargaining in the traditional sense, that is, in a bipartite manner, but they are involved in tripartite negotiations on the minimum wage and wage recommendations within the framework of the VKF.

Employer organisations

About employer representation

Affiliation to employer organisations is voluntary.

Nine employer organisations have played a role at national level – they were also the members of the employer side of the former OÉT. For historical reasons, some of them are actually sectoral organisations that are active at both national and sectoral levels.

The elimination of the OÉT created a serious challenge for employer organisations, as, for many of them, the main function of the body was to take part in national social dialogue, and it had the expertise, staff and infrastructure to do this. Furthermore, being a member of the OÉT provided an additional reason for members to affiliate to the given employer organisation. Similarly to trade union confederations, only three national employer confederations (see below) are members of the VKF, while all nine national employer organisations and five other employer organisations participate in the NGTT.

Since 1 January 2012, companies and entrepreneurs have been required to register at the relevant economic chamber to comply with Act CXXI of 1999 (as modified in November 2011). This mandatory registration costs an annual registration fee of HUF 5,000 (around €16), but does not provide the same rights and obligations as those of full members of chambers. Employer organisations were hostile to the idea of mandatory registration, as it does not give companies any benefit and could simply be considered as a tax. It weakens companies’ willingness to join employer organisations, which are based on the freedom of association.

Employer organisation density, 2012–2020

Note: * Percentage of employees working in an establishment that is a member of any employer organisation involved in collective bargaining. n.a., not available.

Main employer organisations

The two most significant employer organisations are MGYOSZ and VOSZ in the private sector. Together with ÁFEOSZ, they are members of the VKF. These three employer organisations have managed to maintain their role in national-level consultation and negotiation, while other employer organisations tend to boost their activity in sectoral social dialogue or are forced to look for different ways of adapting to the altered structure of social dialogue.

Main employer organisations and confederations

Note: SMEs, small and medium-sized enterprises.

Tripartite and bipartite bodies and concertation

Since 2012, the only forum of tripartite dialogue at national level has been the VKF. It cannot be considered a replacement for the OÉT (which ceased to exist in 2011), as the operation of the VKF is not regulated by law and its sessions are organised on an ad hoc basis, without an annual agenda and in a way that does not enable parties to have profound debates. Its meetings are not usually open to the public. Annual consultations and negotiations on national minimum wages and wage recommendations, and on the subsequent agreements, have been the only constant topics of national-level tripartite dialogue recently.

The NGTT is a multipartite forum for consultation on a wide range of socioeconomic issues involving a large number of actors. It cannot be considered as a social dialogue body; it is a symbolic consultative civil dialogue body, without any negotiation function. This set-up has not changed in recent years.

The sectoral social dialogue committees (of which there were 18 in January 2023, as well as 24 lower-level subsectoral dialogue committees) have existed since 2004. They were established to facilitate sectoral dialogue in general, including sectoral collective bargaining, although sectoral collective bargaining has not yet been fully integrated into the system of collective bargaining. Sectoral social dialogue committees are governed by legislation (Act LXXIV of 2009), which regulates the operation of sectoral and mid-level social dialogue. Legislation also stipulates in detail the criteria for representativeness at sectoral level. Legislators had the explicit intention when drawing up the new Labour Code of fostering trade unions’ bargaining activity and shifting collective bargaining from the traditional level (company level) to sectoral level. So far, the new code has not resulted in an increase in the number of sectoral-level collective agreements.

Main tripartite and bipartite bodies

Workplace-level employee representation

Trade unions and works councils coexist in Hungarian workplaces. Their roles, rights and obligations, as well as their relationship with management/employers, are regulated by the Labour Code (Act I of 2012), namely Part 3 on industrial relations.

Roles, rights and obligations of trade unions and works councils

The new Labour Code (Act I of 2012) introduced specific modifications in relation to industrial relations at workplaces. The key points are as follows.

• Prior to 2012, trade union representativeness at enterprise level depended on the number of their members elected to the works council. In the new Labour Code, this rule was replaced by a 10% threshold (if 10% of the total number of workers at the employer are trade union members) set in relation to the right to collective bargaining.
• If there is no ‘representative’ trade union at the employer (that is, a trade union empowered to enter into collective bargaining) and no collective agreement is in force, the works council has the right to conclude a plant agreement with the employer, which regulates working conditions (except wages).
• Works councils possess an ‘inspection’ function and have the right to follow the lawful operation of the employer; however, only a union has the right to represent workers in complaints of unlawfulness or other disputes.
• An employer has information and consultation obligations only towards a works council (under the former legislation, enterprise-level trade unions also had this right).

Regulation, composition and competences of the bodies

The central concern of employment relations is the collective governance of work and employment. This section looks at collective bargaining in Hungary.

Bargaining system

The Labour Code (Act I of 2012) provides the legal basis for the collective bargaining system, especially Part 3, Chapter XXII (Articles 276–284). These provisions mainly regulate collective bargaining in the private sector, but also at state-owned enterprises (typically public utility companies).

Under former legislation, the works council’s election functioned also as the measurement of representativeness of trade unions, and the acquired collective bargaining rights remained valid until the next works council’s election. Based on the new Labour Code, a trade union loses its right to collective bargaining (and thus its legally unspoken representativeness) when its number of members decreases below the 10% threshold.

Another modification of the Labour Code has empowered works councils to conclude a plant agreement with similar content to a collective agreement under specific conditions (see the section ‘Workplace-level employee representation’).

In 2004, Hungary introduced sectoral social dialogue committees to promote sectoral dialogue in general, including collective bargaining at that level, in the private sector. This institutional development has been successful in some sectors but has not resulted in a growing number of sectoral-level collective agreements. Most committees use the institutional framework for discussing economic, labour and social issues of mutual concern without entering into binding negotiations.

Collective bargaining is not possible for civil servants (employees of the state administration at various levels and public officials) according to Act CXCIX of 2011 on civil servants. For public employees (who are employed by the various budgetary institutions in areas such as education, healthcare and social services) collective bargaining is possible. Any derogation from the relevant acts and the implementation decrees by a collective agreement is, however, possible only if it is allowed by Act XXXIII of 1992 on public employees.

Collective agreements are legally binding.

Wage bargaining coverage

Databases that allow the calculation of coverage ratios do not exist in Hungary. Experts consider the coverage ratio to be low in Hungary, based on the assumed number of collective agreements and the organisation level of trade unions.

According to the European Company Survey 2019, wage bargaining coverage stands at about 16% of employees. At sectoral level, wage bargaining coverage is relatively poor, with only three sectors having collective agreements, namely electricity, construction and tourism/hospitality. There is no national cross-sectoral level.

Collective wage bargaining coverage of employees from different sources, all levels

Note: * Percentage of employees working in local units where more than 50% of the employees are covered under a collective pay agreement against the total number of employees who participated in the survey.

Sources: Eurofound, European Company Survey 2013 and 2019 (including private sector companies with establishments with >10 employees (NACE codes B–S); the question in the survey was a multiple choice question and multiple responses were possible); Eurostat [earn_ses10_01], [earn_ses14_01], [earn_ses18_01], Structure of Earnings Survey 2010, 2014 and 2018 (including companies with >10 employees (NACE codes B–S, excluding O), with a single answer for each local unit).

Bargaining levels

The predominant level of collective bargaining in Hungary is company level.

Although the Labour Code (Act I of 2012) does not distinguish between bargaining levels, the Hungarian system can be considered as a two-tier bargaining structure, with single or multi-employer (enterprise-level) agreements and agreements that are signed by an employer organisation. The latter is loosely (and not consistently) determined as an ‘agreement with wider scope’. It refers in practice to sectoral-level bargaining, which could cover a part of the sector only.

At national level, social partner confederations are not involved in collective bargaining in the traditional understanding of the term, that is, in a bipartite manner, as indicated earlier. They are involved in tripartite and multipartite consultation and discussion on the minimum wage (within the framework of the VKF and the NGTT). They are also parties to the tripartite recommendation on the average wage increase agreed within the framework of the VKF. There is no obligation to follow this recommendation and there are no data available on the degree to which the recommendation is used by bargaining parties in practice.

In the case of public employees only, ‘institutional-level’ collective bargaining (that is, single-employer bargaining) is stipulated by Act XXXIII of 1992. Special agreements with a wider scope can be concluded by the government and sectoral trade unions, but neither their content nor the negotiation procedure follows the overall collective bargaining pattern.

Levels of collective bargaining, 2022

Articulation

The various levels of collective bargaining in the private sector are not systematically linked, primarily because sectoral collective agreements are rare. At national level, the only relevant output is a tripartite recommendation on wage increases and its role in the bipartite collective bargaining machinery is limited.

In the public sector, single-employer collective agreements are fairly distinct outcomes of local bargaining and only the relevant legal framework provides an overall framework.

Timing of the bargaining rounds

In the private sector, bargaining rounds usually occur at the end of the year. In some years, bargaining has been postponed due to the late agreement of the VKF to the recommended average wage increase or delayed due to difficulties in the bargaining process.

In the public sector, collective bargaining has to be scheduled according to the availability of reliable information on the state budget for the subsequent year (if not according to the approved law).

Coordination

Coordination of single-employer collective bargaining is weak in both the private and the public sector. Coordination is considered to be an internal affair of those sectoral trade unions and employer organisations to which the bargaining parties are affiliated. There is no pace or trendsetting tradition in Hungary.

Extension mechanisms

Collective agreements concluded at sectoral level can be extended by the resolution of the minister responsible for employment policy. The extension is regulated by Act LXXIV of 2009 on the sectoral dialogue committees and by its implementation decree (SZMM Decree 22/2009 (IX. 30.)). According to Article 17 of the act, the two sides of the sectoral dialogue committees, as the signing sectoral social partners, can jointly initiate the binding extension. An extension is an administrative procedure that takes place after due consultation with national social partner confederations and the relevant line minister, and the minister’s resolution can be challenged in the labour and administrative courts.

Since the amendment of 1 January 2023 concerning Act LXXIV of 2009, extensions can be requested only if the members of the signatory employer organisation employ, jointly, the majority of workers in the sector for which the extension is requested and if at least one of the signatory trade unions is representative of the sector according to the legal requirements.

Derogation mechanisms

In the Hungarian context, derogation mechanisms should be discussed in two senses, namely in:

• collective agreements at different levels
• the relationship between collective agreements and legislation

The lower-level collective agreements may derogate from the higher-level collective agreements, but only in favour of workers. The few higher-level collective agreements have opt-out options – mainly regarding the organisation of working time.

The Labour Code has a unique regulation on the derogation of the collective agreements vis-a-vis legislation. In principle, the collective agreements can derogate from the rules of the Labour Code not only in favour of workers but also to their detriment. The closing part of each chapter of the Labour Code precisely defines those provisions from which no derogation is allowed by a collective agreement or from which derogation is allowed only in favour of workers. Regarding all other provisions, derogation is possible in a way that could be unfavourable or harmful for workers. Opening the derogation in both directions, according to the legislator, is intended to provide more room for bargaining. There is no doubt, however, that the influence of employers has been strengthened by this new regulation.

Expiry of collective agreements

Collective agreements can be concluded for an indefinite or definite period. If the most recent one has expired, it loses its force immediately and is repealed.

A new Labour Code regulation states that if the membership of the contracting trade union has dropped below the 10% threshold, the collective agreement negotiated by it is repealed. When one employer takes over from another, the successor is required to apply the rules of the existing collective agreement for one year (if it is still valid for a year or more: Articles 281 and 282 of the Labour Code).

Peace clauses

Collective agreements do not usually include peace clauses.

Other aspects of working life addressed in collective agreements

According to experts, collective agreements have continued to focus on traditional bargaining issues, including interpretations of the Labour Code. Contemporary challenges (such as gender equality, lifelong learning and flexibility) are often missing, as they are mainly dealt with by employers only and have not yet become the subject of comprehensive bargaining packages.

The main issues regulated by collective agreements are:

• wages and fringe benefits (contributions to the meals of workers, contributions to their transport needs, contributions to voluntary pensions and health and recreation services)
• working time schedules, taking into consideration in particular the situation of workers with children
• the rights of workers’ representatives.

Legal aspects

The Fundamental Law of Hungary of 25 April 2011 guarantees workers, employers and their organisations the right to collective bargaining and the right to take collective action to defend their interests, including the right to discontinue work (Article XVII, Section 2).

While industrial actions initiated by workers or their organisations are regulated in a fairly detailed way, especially strikes, the legislation is silent on the most obvious possible industrial action by employers: lockouts.

The right to strike is regulated by Act VII of 1989. The right to strike is guaranteed to individual workers in pursuit of their own demands, while the right to organise a solidarity strike is granted only to trade unions. As a basic rule, a strike can be called only after attempts to resolve conflicting interests have been made for at least seven days (Article 2).

There are some limitations regarding both possessing and exercising the right to strike. No right to strike is given to the staff of law enforcement agencies, armed forces or the judiciary. Civil servants working in public administration have the right to strike but may exercise it only according to the special regulations fixed in the agreement between the government and the relevant trade unions.

Act VII of 1989 lists the circumstances when strike action is unlawful (Article 3).

In the case of activities of fundamental public concern – in particular, mass transportation, telecommunications, electricity, water, gas and other energy supply – the right to strike may be exercised only to the extent that it does not impede the provision of services at a level deemed sufficient. The ‘sufficient level’ can be defined by an act of parliament (according to the amendments to Act VII in 2010 and 2012), which has already happened in some areas. These regulations strongly limit the right to strike in the certain public services.

Other forms of industrial action (other than strikes) are much more common in Hungary, such as protest meetings and protest rallies, demonstrations, petitions and collecting signatures. The first two are regulated by Act LV of 2018 on the right to assembly. This new law is more restrictive than its predecessor: demonstrations must be notified months in advance and the police are given relatively broad discretion about banning assemblies. Complaints and public interest disclosures (whistleblowing) were regulated by Act CLXV of 2013 until its replacement by the enhanced Act XXV of 2023. Petitions and the collection of signatures are regulated by Act CCXXXVIII of 2013 on referendums, European initiatives and the procedure of the referendum.

Developments in industrial action, 2013–2021

Note: n.a., not available.

Source: Hungarian Central Statistical Office, 2022.

Dispute resolution mechanisms

Collective dispute resolution mechanisms

The collective dispute resolution mechanisms are regulated by the Labour Code (Act I of 2012, Articles 291–293).

It is important to note that the Labour Code uses the term ‘collective labour disputes’, which is interpreted as referring solely to collective interest disputes.

Depending on the parties in disagreement, the employer and the works council or the employer and the trade union may set up an ad hoc conciliation committee (egyeztető bizottság) to resolve their disputes (see also the section ‘Workplace-level employee representation’). The plant agreement or the collective agreement may contain provisions for a standing conciliation committee as well.

The conciliation committee is composed of an equal number of members delegated by the employer and by the works council or trade union, as well as an independent chairperson. The employer and the works council/trade union may agree in writing in advance to abide by the decision of the committee. In this case, the committee’s decision is binding. In the case of a tied vote, the chairperson’s vote is decisive.

Some collective disputes specified by the Labour Code (Article 236(4) and Article 263) should be decided by an arbitrator.

Since November 2016, it has been possible for the MTVSZ – as an alternative dispute resolution body – to be invited by the parties to the dispute to assist (through conciliation or mediation) or to arbitrate.

Individual dispute resolution mechanisms

According to the Labour Code (Article 285), the main individual dispute resolution bodies are the courts. Individual labour disputes are decided by specialised courts, namely the administrative and labour courts (which are at district court level, but operate only in the county seat towns). These courts provide for the first instance, while cases not settled are presented to the civil courts in the second instance.

Use of alternative dispute resolution mechanisms

The MTVSZ is responsible for collective, not individual, disputes. However, an explicit intention behind the establishment of the MTVSZ was to provide an opportunity to transform, if possible, individual disputes into collective disputes by consolidating several individual disputes around the same issue.

Use of dispute resolution mechanisms, 2014–2021

Notes: *The classification of labour dispute cases was significantly narrowed under changes enacted in Act I of 2017 on the Code of Administrative Court Procedure as of 1 January 2018, which reduced the number of employment disputes. ** Due to the abolishment of labour courts as of 31 March 2020, the numbers in 2020 are not comparable with the corresponding numbers of the previous and subsequent years. n.a., not available.

Source: National Judicial Office, 2022

‘Individual employment relations’ refers to the relationship between the individual worker and their employer. This relationship is shaped by legal regulation and by the outcomes of social partner negotiations over terms and conditions. This section looks at the start and termination of the employment relationship and entitlements and obligations in Hungary.

Start and termination of the employment relationship

Requirements regarding an employment contract

According to the Labour Code, an employment relationship is established by entering into an employment contract (Article 42). In some cases, a medical examination is required to certify fitness to work.

Employment contracts may only be concluded in writing. If the employment was not agreed in writing, it is invalid and can only be invoked by the worker within 30 days.

The minimum working age is 16 years (Labour Code, Article 34(2)). By way of derogation from the above, any person of at least 15 years of age receiving full-time school education may enter into an employment relationship during school holidays. By authorisation of the relevant authority, young people under 16 years may be employed for the purposes of performance in cultural, artistic, sports or advertising activities (Labour Code, Article 34(2) and (3)).

There are special requirements in the public sector set by the relevant law (especially Act CXCIX of 2011 on civil servants, Act XXXIII of 1992 on public employees, Act CCV of 2012 on the armed forces and Act XLII of 2015 on the professional staff of law enforcement agencies). One special requirement is that secondary education is required for civil servants and law enforcement officers. Most government sector jobs require no criminal convictions. The minimum working age in the public sector is usually 18 years. Specific jobs in the government sector require appropriate educational attainment, which is regulated by the relevant acts and the implementation decrees of the given acts.

Dismissal and termination procedures

The Labour Code (Article 64) stipulates three major forms of termination of the employment relationship:

• termination by notice
• termination with immediate effect
• termination by mutual agreement

Termination by notice (Labour Code, Articles 65–70) can be initiated by either the worker or the employer. There are various bans on dismissal linked to pregnancy, maternity and childcare. Employers are required to justify the dismissal. A worker may be dismissed only for reasons connected with their behaviour in relation to the employment relationship, with their ability or with the employer’s operations. Workers are not required to give reasons for terminating their employment relationship. The basic notice period is 30 days, which has to be extended by between 5 and 60 days in proportion with the length of service if employment is terminated by the employer. A dismissed worker with at least three years of service is also entitled to severance payment. Severance payment is also due in some other cases (Labour Code, Article 77), such as if the employment relationship is ended without just cause.

There are special provisions regarding collective dismissals (Labour Code, Articles 71–76) in line with the Collective Redundancies Directive (98/59/EC). For example, negotiation with the works council is compulsory and the employer has to inform the works council in writing about the reason for the collective dismissal.

Both the employer and the worker can terminate the employment relationship with immediate effect and without notice if the other party (Labour Code, Articles 78–79):

• wilfully or by gross negligence commits a grave violation of any substantive obligations arising from the employment relationship
• otherwise engages in conduct that would render the employment relationship impossible

The employment relationship can be terminated by mutual agreement. The term ‘mutual agreement’ is loosely regulated by the Labour Code: the parties have considerable freedom and only the general principles have to be followed.

Some special groups – for example executive officers and temporary agency workers – are subject to less stringent regulations.

In the public sector, termination of employment has specific (often more specific than in the private sector) and binding rules; the notice period is different and the severance payment is higher. The specific rules are regulated by the relevant acts (primarily Act CXCIX of 2011 on civil servants and Act XXXIII of 1992 on public employees).

Entitlements and obligations

Parental, maternity and paternity leave

Although the social system has been transformed in Hungary relatively significantly, radical changes have not occurred in this type of leave. There are no data available about the trends in the uptake of paternity leave – a 2022 survey suggests that, in recent decades, about one-fifth of eligible fathers have taken paternity leave. From 2014, people who received the childcare fee (gyermekgondozási díj, GYED) and the child home care allowance (gyermekgondozást segítő ellátás segély, GYESE; see below) could work after the first birthday of the child. Since 2016, the recipients have been able to work after the child reaches the age of six months.

Owing to a change in the Labour Code adopted in December 2022, the duration of paternity leave increased from 5 to 10 days as of 1 January 2023 (Act I of 2012, Article 118(4)). Another amendment introduced into the Labour Code at the same time established parental leave. Both parents are entitled to this type of paid leave. Each parent is entitled to a total of 44 days of parental leave until the child reaches 3 years of age (Act I of 2012, Article 118A(1)).

This short-term parental leave, based on the Labour Code, is entirely unrelated to the long-established, long-term parental leave arrangement that is enshrined in Act LXXXIV of 1998 on family support, which entitles one of the parents to stay at home until the third birthday of the child while receiving financial support from the state.

Under the latter parental leave arrangement, parents can choose whether the father or the mother will stay with the child, although usually it is the latter. After the child is six months old, staying home is optional: the recipient of state assistance may go back to work if they so choose.

Regarding the number of benefits provided, and the financing institution, there is a difference between ‘insured’ and ‘non-insured’ people. People can be considered insured if they have at least 365 days of employment within two years of the birth of the child. The various benefits are as follows:

• maternity care fee (csecsemőgondozási díj, CSED)
• GYED
• GYESE

The table ‘Statutory leave arrangements’ gives an overview of the main characteristics of the statutory leave arrangements in Hungary. Specific rules (on adoptive parents, foster parents, twins and so forth) can be found in Act LXXXIII of 1997 on health insurance allowances and Act LXXXIV of 1998 on family support, as amended for the given years.

Statutory leave arrangements

Sick leave

Sick leave and the related payment are regulated by Act LXXXIII of 1997.

For the duration of sick leave, 60% of the absence fee – which is based on the average wage of the worker and is defined by the Labour Code – is paid if the employee has been insured under social insurance for at least 730 days. Otherwise, the sick leave payment is 50% of the absence fee. The daily allowance of sick leave payment may not exceed the one-thirtieth of twice the monthly minimum wage.

Retirement age

Retirement age is regulated by Act LXXXI of 1997 on social security pension benefits.

The retirement age for old-age pension benefits under the social security system has been 65 years since 2022. The retirement age has been gradually increasing since 2010. The other eligibility criterion for a full old-age pension is at least 20 years of service. A partial retirement pension is granted to people who have reached the relevant retirement age for the old-age pension and have at least 15 years of service.

There is a gender difference: the full old-age pension benefit is due to any woman having at least 40 years of service, irrespective of age.

In the public sector, civil servants and some other officers are obliged to retire at the age of 70. There is a new regulation that a government sector employee should not have a parallel pension and salary; if they are past retirement age, they have to choose whether the pension is suspended or the paid public sector employment is terminated.

From 1 September 2022 to 31 August 2023, the application of the above rule was suspended for those above the retirement age working in the public sector for social, child protection and child welfare services and in the sectors of public education and vocational education as public employees or officials (Government Decrees 268/2022 and 269/2022). For the relevant period, the employees affected could receive both their wage/salary and their pension.

In the armed forces and law enforcement agencies, employees can retire five years earlier.

For workers, pay is a reward for their work and their main source of income; for employers, it is a cost of production and a focus of bargaining and legislation. This section looks at minimum wage setting in Hungary.

Between 2018 and 2022, wages grew at a dynamic pace in Hungary – at least in national currency terms. The average yearly growth rate of real wages was 7.4% between 2018 and 2020. Fast wage growth continued even in 2020, amid an economic contraction, but slowed down in 2021, with employers becoming more cautious after the pandemic and inflation picking up pace. The slowdown continued in 2022 despite the strong rise in nominal wages and a record payment of bonus payments in some segments of the public sector as inflation skyrocketed. In real euro terms, however, gross wages have risen at a slower pace and have not been able to catch up with the EU average since 2018 due to the ongoing weakening of the national currency.

Minimum wages

The statutory minimum wage is set by the government after consultation with the multipartite national civil dialogue body, the NGTT (Act I of 2012 on the Labour Code, Labour Code, Article 153(1), and Act XCIII of 2011 on the NGTT).

Prior to this consultation, the government also consults the social partners in the private sector within the national tripartite body, the VKF. This consultation has no basis in law beyond the agreement of the parties to the VKF (agreement on the establishment of the VKF and its standing order, dated 22 February 2012).

In practice, the VKF is the forum for wage negotiations, partly as a legacy of the OÉT, the former national tripartite body, which used to have a co-determination right on the minimum wage. If the parties to the VKF agree on the minimum wage, this decision becomes a proposal to be presented by the government to the NGTT for consultation. If no agreement is achieved within the VKF, the government can put forward its own proposal. In both cases, the final decision on the minimum wage rests with the government, taking into consideration the outcome of the usually rather formal discussion within the NGTT.

The minimum wage is legally binding on all workers and is implemented by annual government decrees. There are two specific exceptions.

1. Workers employed in jobs that require at least secondary educational attainment should get the ‘guaranteed wage minimum’, which is higher than the minimum wage. The guaranteed wage minimum is set by the general procedure as described above.
2. The wage earned by workers employed in public work programmes is determined separately by the government only, without any consultation with social partners. Their wages are implemented by programme-related government decrees.

Sectoral collective bargaining could in theory lead to higher minimum wages for each sector’s area. However, in practice there are only a small number of sectoral agreements, and most reiterate the statutory minimum wage.

Working time is ‘any period during which the worker is working, at the employer’s disposal and carrying out his activity or duties, in accordance with national laws and/or practice’ (Directive 2003/88/EC). This section briefly summarises the regulation of and issues regarding working time, overtime, part-time work and working time flexibility in Hungary.

Working time regulation

The Labour Code (Act I of 2012) regulates working time in Hungary.

The standard normal working time is 8 hours a day (Labour Code, Article 92(1)) or 40 hours a week (calculated on the basis of the standard work pattern of 5 days a week (Labour Code, Article 97(2)) and 8 hours daily working time).

In two specific circumstances (Labour Code, Article 92(2)), parties may agree on a longer maximum daily working time of up to 12 hours (or 48 total weekly working hours). This ‘extended daily working time’ can apply only to the following workers:

• those working in stand-by jobs
• relatives of the employer or the owner

The Labour Code provides a specific list of those provisions in which derogation from the working time statutory regulations by collective agreement is not allowed at all (Article 135(1)), allowed only for the benefit of workers (Article 135(2)) and allowed for specific groups of workers (Article 135(3)).

In two cases, collective agreements could provide workplaces with significantly more flexibility than the basic rules of the Labour Code allow.

1. While the working time frame (Articles 93–94) – the reference period for calculating the average weekly and daily working time – is capped at 4 months, it can be extended to 6 months in special circumstances (such as shift work, continuous work and stand-by jobs) or it can be extended – according to the amendment in December 2018 – up to 36 months by collective agreement.

2. While overtime is capped at 250 hours annually (Article 109), it can be increased to a maximum of 300 hours by collective agreement (Article 135(3)) or to 400 hours – according to the December 2018 amendment mentioned above which refers to these additional 150 hours as ‘voluntary overtime’ (önként vállalt túlmunka). Such overtime can be arranged by a written agreement between the firm and the individual employees (Article 109).

    

Overtime regulation

Overtime is defined by the Labour Code (Act I of 2012), Article 107, as:

• working time that exceeds daily working hours – if neither the ‘working time frame’ nor the ‘longer settlement period’ is applied
• working time that exceeds the total working time set for the period of the working time frame
• working time that exceeds the total working time calculated for the longer settlement period
• on-call time (partially or entirely if the time spent actually in work cannot be measured)

The term ‘working time frame’ (munkaidőkeret) is synonymous with the reference period in the meaning of Directive 2003/88/EC on the management of working time. The ‘longer settlement period’ (elszámolási időszak) (Labour Code, Article 98) can be applied in the absence of a working time frame. This working time arrangement is used to ‘settle’ the plus or minus (credit and debit) working hours accrued or not worked in the first week of the settlement period. The employer is thus entitled to require the worker to complete their weekly standard normal working time over a longer period. Both the length (up to 16 weeks as a general rule, but up to a maximum of 36 months in certain cases if agreed by collective agreement) and the starting date of the settlement period are determined by the employer.

The annual limit on overtime is 250 hours (Labour Code, Article 109), which can be increased to 400 hours by written agreement between the employee and the employer. The employer can request overtime not only in reasonable circumstances (as was the case prior to 1 July 2014) but in any circumstances with some sort of justification.

Overtime is compensated by:

• a 50% wage supplement or time in lieu, according to the parties’ agreement
• a 100% wage supplement on weekly rest days (not necessarily Sundays but according to the working time schedule) and on public holidays or a 50% wage supplement if time in lieu is also granted

On-call time has special compensatory provisions.

The maximum total working weekly and daily hours are as follows:

• for standard normal working time, 48 hours weekly and 12 hours daily (Labour Code, Article 99(2))
• for extended daily working time, 72 hours weekly and 24 hours daily for stand-by jobs, or the owner/employer’s family members (Labour Code, Article 99(3)) based on a written agreement
• in the health sector, 60 hours weekly and 12 hours daily (Act LXXXIV of 2003, Article 12/F, as modified in June 2012)

There are further specific provisions in cases in which health workers perform only on-call duties during their working time beyond their normal working hours.

Part-time work

According to the Labour Code (Act I of 2012), the employer and the worker may agree on a shorter daily working time (Labour Code, Article 92(5)), thereby establishing a part-time employment contract, or they can modify an already existing full-time employment contract to make it a part-time contract if both wish to do so. The Labour Code does not contain further detailed rules on part-time work. The general employment rules apply for part-time work along with the principle of pro rata temporis, especially in respect of worker benefits offered directly or indirectly, in cash or in kind. A special regulation applies to workers with children under four years of age, or under six years in the case of families with three or more children. In this case, the employer has no right to refuse modifying the employment contract for part-time work (for reduced daily hours as half of the normal working day) if requested by the worker (Labour Code, Article 61(3), as modified in December 2019.

In Hungary, wages are very low on average and, consequently, part-time workers’ earnings are even worse. Family income is often complemented by the women of the family being employed on a part-time basis. The state supports child-rearing, together with the employment of women on a part-time basis. Therefore, the proportion of female part-time workers is higher than the proportion of male part-time workers. Since 2014, part-time work has decreased for all categories, and the percentage of part-time workers is significantly below the EU27 average.

Night work

Night work is defined by the Labour Code (Act I of 2012), Article 89, as work carried out between 22:00 and 06:00.

Shift work and seasonal work

Shift work and seasonal work are defined by the Labour Code (Act I of 2012), Articles 90 and 141. The method of organising the employer’s work is considered shift work if its duration reaches 80 hours in a week (Article 90(b)). Seasonal work, regardless of work time management considerations, is tied to a certain time or period of the year (Article 90(c)).

If the beginning of the scheduled daily working time of employees changes frequently, a 30% wage supplement (special payment for shift work) must be paid for work performed between 18:00 and 06:00 (Article 141(1)).

For the purposes described in Article 141(1), changes are considered frequent if – on a monthly basis – the beginning of the scheduled daily working time differs for at least one-third of all working days, and if the earliest and the latest start time are at least four hours apart.

Weekend work

Weekend work is defined in the Labour Code, Article 101.

(1) Work on Sundays may be scheduled within the framework of regular working time:

a) if the employer generally operates on Sundays by the nature of its business, or in jobs normally performed on Sundays; b) in seasonal work; c) if working in continuous shifts; d) for workers working in shifts; e) in stand-by jobs; f) for part-time workers working Saturdays and Sundays only; g) in connection with the provision of basic public services or [cross-border] services, where it is necessary to work on that day owing to the nature of the service; h) in the case of work performed abroad; and i) at employers engaged in commercial activities covered by the Trade Act, and at providers of services auxiliary to commercial activities and providers of tourist services of a commercial nature.

As regards Article 101(1)(a), in defining what constitutes the nature of business that requires Sunday work, the provisions of Article 102(3), are applied.

Public holidays

Public holidays are defined in the Labour Code, Article 102.

(1) Public holidays are 1 January, 15 March, Good Friday, Easter Monday, 1 May, Whit Monday, 20 August, 23 October, 1 November and 25–26 December.

(2) Regular working time may be scheduled for public holidays in the cases defined in paragraphs a)–c), g)–h) of Article 101(1).

(3) An employer shall be considered to operate on public holidays by the nature of its business or a specific job shall be approved to operate or to be carried out on public holidays:

a) if the service provided is required on that particular day by way of local tradition or commonly accepted social custom directly connected to the public holiday; or

b) if provided in the interest of the prevention or mitigation of any imminent danger of accident, natural disaster or serious damage or of any danger to health, the environment or property.

The Labour Code, Article 140, also covers compensation for work on Sundays.

(1) Employees working on Sundays are entitled to a 50% wage supplement (Sunday premium):

a) if the employee can be ordered to work in regular working time only under the conditions referred to in paragraph d), e) or i) of Article 101(1), and

b) for overtime work: for the employees referred to in paragraph a) of Article 101(1) or if the employee cannot be ordered to work in regular working time under Article 101(1).

(2) Employees required to work on public holidays are entitled to a 100% wage supplement.

Rest and breaks

Rest breaks are defined by the Labour Code (Act I of 2012), Article 103.

(1) If the scheduled daily working time or the duration of overtime work performed under paragraph a) of Article 107:

a) exceeds six hours, 20 minutes of break-time shall be provided;

b) exceeds nine hours, an additional 25 minutes of break-time shall be provided.

(2) The duration of overtime work performed under paragraph a) of Article 107 shall be included in the scheduled daily working time.

(3) The break-time provided to employees by agreement of the parties or in the collective agreement may not exceed 60 minutes.

(4) During the break-time work must be interrupted.

(5) The break-time shall be provided after not less than three and not more than six hours of work.

(6) The employer shall be entitled to schedule break-times in several lots. In this case derogation from Article 103(5) is allowed, however, the duration of the break provided within the timeframe referred to there must be at least 20 minutes.

The daily rest period is defined by the Labour Code, Article 104.

(1) At least 11 hours of uninterrupted rest periods shall be provided after the conclusion of daily work and before the beginning of the next day’s work.

(2) The daily rest period shall be at least eight hours for employees working: a) split shifts; b) continuous shifts; c) multiple shifts; or d) in seasonal jobs.

From 1 January 2023, the provision of the daily rest periods is not needed if the employer does not allocate working time or does not order extraordinary working time for the following day.

Working time flexibility

In the Hungarian context, it is worth making a distinction between flexibility in terms of the length of working time and flexibility in the organisation of working time.

Regarding flexibility in the length of working time, the Labour Code (Act I of 2012) provides detailed and fairly high maximum limits (daily and weekly hours and overtime), allowing derogation (by collective bargaining or individual contracts) to the benefit of workers only. Flexibility towards reduced hours also has a legislative framework.

As regards flexibility in the organisation of working time, the Labour Code provides a discretional right to employers. Employers decide on the actual work schedule (Labour Code, Article 96(1)). While employers have to observe the statutory rules on the various elements of working time, they can schedule actual working hours within a broad framework, especially when a working time frame or longer settlement period (as described earlier) is applied.

The employer may transfer the right to set a work schedule to the worker. In that case, the worker fully determines their personal working schedule (Labour Code, Article 96(2)).

Flexible working time schedules, when workers have the opportunity to fix the start and end of their working day, are not legislated for by the Labour Code but are left to collective agreements and individual contracts. Workers do not have a legal right to flexitime arrangements, staggered hours, working time banking or a compressed work week, but they can agree on any of these options with their employer. Collective agreements can also cater for such requests.

Maintaining health and well-being should be a high priority for workers and employers alike. Health is an asset closely associated with a person’s quality of life and longevity, as well as their ability to work. A healthy economy depends on a healthy workforce: organisations can experience loss of productivity as a result of the ill health of their workers. This section looks at psychosocial risks and health and safety at work in Hungary.

Health and safety at work

The Fundamental Law (2011) states that, besides the right to physical and mental health, ‘every employee has the right to working conditions that respect their health, safety and dignity’. It is enforced – among other things – by organising OSH care.

Council Directive 89/391/EEC of 12 June 1989 forms the basis of the highest-level national OSH legal regulation, Act XCIII of 1993 (Munkavédelmi Törvény). EU-harmonised standards are effective in Hungary, although many have not been translated into Hungarian.

In addition to occupational safety requirements, Act XCIII of 1993 sets out the system of legal regulation, organisation and institutional regulations concerning occupational healthcare requirements and the tasks thereof to be executed by the employers. With regard to occupational healthcare, Act CLIV of 1997 (Egészségügyi Törvény) sets out the medical professional goals and tasks of occupational healthcare. According to both acts, occupational healthcare embraces the professional fields of work hygiene and occupational medicine. Implementing decrees accompany the acts, with reference to relevant European directives.

The principles of Act XCIII of 1993 on OSH are listed below.

• The employer has an objective responsibility to meet the requirements of safe working activities that do not endanger health.
• OSH requirements are defined in a tripartite way.
• There is an obligation of cooperation for the interested parties.
• The employer has freedom of choice – within the limitations of legal regulations and standards.
• The relevant costs incurred by the employer cannot be passed on to the employees.

It is the duty of the employer to establish a unified and comprehensive prevention strategy. The employer must have a risk assessment in place so that it can strive to tackle risks or to eliminate them at the source. This includes replacing dangerous items with harmless or less dangerous ones and the priority of collective technical protection over personal protection. It is the duty of the employer to prepare the proper documentation and secure the OSH education of the employees.

The law is effective in Hungary for every organised working activity, independent of its institutional or organisational nature. Furthermore, it extends to people within the reach of working activities.

The employer must not give financial or other compensation for hazardous work, but instead must provide safe working activities that do not endanger health.

The law defines the following:

• the requirements regarding the installation of workplaces
• the principles of OSH set-up (that is, putting workplaces into operation from an OSH perspective)
• the material and human resource preconditions of activities at work
• the requirements concerning work processes, technologies and materials

The employer is obliged to employ people or utilise services with the required vocational qualifications while ensuring that adequate conditions are provided to ensure safe working activities that do not endanger health.

Other important legal acts include:

• Act XCIII of 1993 on OSH and its implementation decree
• Act CLIV of 1997 on healthcare
• Act I of 2012 on the Labour Code
• Act XLVIII of 1993 on mining (1993. évi XLVIII. törvény a bányászatról)
• Act XXV of 2000 on chemical safety (2000. évi XXV. törvény a kémiai biztonságról)

The 2016 amendment to Act XCIII of 1993 stipulates that workers’ health and safety representatives must be elected in all workplaces with more than 20 employees (compared with the previous threshold of 50 employees).

Generally, in Hungary, reports on workplace accidents and their consequences and the statistical data gathered on this subject are often considered not fully reliable (especially for micro and small companies).

Numbers of workplace accidents, 2018–2022

Source: Ministry of Economic Development, Department of Occupational Health and Safety, 2023

New enterprises often consider OSH to be a low priority, striving exclusively for economic results, while newly employed workers also need time to learn and comply with OSH regulations.

It is important to note that when inspectors find violations of OSH regulations, they first give a warning and do not issue fines. This has led to a loosening of rules and their observance, especially for micro and small enterprises.

Psychosocial risks

In Hungary, the mapping of psychosocial risk factors is regulated by legislation.

Workplace stress is addressed by Act XCIII of 1993 on labour safety, consolidated with Ministerial Decree 5/1993 (of 26 December) issued by the (now extinct) Ministry of Labour (MÜM). This legislation makes it clear that the employer has the duty to assess and reduce psychosocial risks. The act defines the concept of psychosocial risk and its consequences (stress, workplace accidents and psychosomatic illnesses).

Act XCIII of 1993 calls for the reduction of high-stress risks and safety inspections to monitor and prevent stress. The relevant articles are:

• Article 54(1)(d), which sets out the duties of the employer regarding avoidance of stress and the effects of work-related psychosocial risks
• Article 87(1)(h), which sets outs interpretative provisions on psychosocial risks
• Article 87(1)(d), which sets outs occupational illnesses

In 2012, Act XCIII of 1993, Article 54(3) on risk assessment, was amended: the employer is now obliged to do a risk assessment at least every three years.

To facilitate better management and reduction of psychosocial risks, evidence from studies, informational literature and promotional materials are published on the website of the inspection agency, the Government Occupational Health and Safety Authority (Országos Munkabiztonsági és Munkaügyi Felügyelőség, OMMF).

Skills are the passport to employment; the more highly skilled an individual, the more employable they are. People with good skills also tend to secure better-quality jobs and better earnings. This section briefly summarises the Hungarian system for ensuring skills and employability and looks at training provision.

National system for ensuring skills and employability

The place and role of the public institutions that are responsible for skills identification and development has been much debated in recent years in relation to the need to increase employability in the workforce and better serve the needs of the economy. In the early 2010s, there was a general amalgamation of labour market institutions, vocational education and training institutions, and labour and OHS institutions; this was followed by further structural changes. As of 1 January 2015, vocational training and adult education is the responsibility of a new background institution: the National Office for Vocational and Adult Training (Nemzeti Szakképzési és Felnőttképzési Hivatal, NSZFH), overseen by the ITM. With the dissolution of the ITM in 2022, the NSZFH was moved into the remit of the Ministry of Culture and Innovation.

For many years, all state-recognised vocational qualifications awarded within or outside the school system were defined in the National Qualifications Register (Országos Képzési Jegyzék), but this was dissolved on 1 January 2021 and replaced by the Vocation Register (Szakmajegyzék). Now there is a clear separation between training and vocational education, and vocational qualifications can be obtained only through the latter.

Under Government Decree 1168/2019, the ITM launched its proposals for a reform of vocational education. The reform implements Strategy Vocational Training 4.0, which is based on the multiple goals: to provide career paths in technical vocations (including a state-subsidised five-year vocational school system in technical subjects), to provide modern infrastructure (promoting dual training schemes and digital content) and to improve the training of educators (making teacher training for technical experts more flexible).

Non-governmental organisations, such as the Hungarian Chamber of Commerce and Industry (Magyar Kereskedelmi és Iparkamara, MKIK) and the Hungarian Chamber of Agriculture (Magyar Agrárkamara), play a decisive role in the development of professional and examination requirements of vocational qualifications, as well as in vocational education and training policy in general. Social partners could formerly express their views within the National Vocational and Adult Training Council (Nemzeti Szakképzési és Felnőttképzési Tanács), although with limitations. In 2018, the Innovational Council for Vocational Training (Szakképzési Innovációs Tanács) was set up with a similar scope, but the membership of social partners was narrowed. The number of state-sponsored qualifications was significantly reduced in 2021.

Training

For some years, a complex restructuring of the whole education system has been under way involving all sectors – general/public education, vocational education and training, and higher education. The two most significant changes are listed here.

• Since 1 January 2013, vocational schools have been maintained and governed centrally by the state.
• The external evaluation/inspection system has been reintroduced in the education sector after almost three decades of absence.

The National Institute of Vocational and Adult Education (Nemzeti Szakképzési és Felnőttképzési Intézet) was the national authority responsible for development and research activities in vocational education and training. As indicated above, its organisational status has changed over the years, from relative independence as a government background institution, to becoming a section of the national labour office (formerly Nemzeti Munkaügyi Hivatal, NMH), to regaining its background institutional status as the newly established NSZFH with increased scope and power from 1 January 2015.

In Hungary, vocational education and training was governed by Act CLXXXVII of 2011, before it was replaced by Act LXXX of 2019 (2019. évi LXXX. törvény a szakképzésről), while adult education and training is regulated by Act LXXVII of 2013 (2013. évi LXXVII. törvény a felnőttképzésről). In July 2018, sectoral skills councils (Ágazati Készségtanács, ÁKTs) were set up to create harmony between skills development and labour market needs. The MKIK coordinates the work of the ÁKTs.

Survey data show that the smaller the company, the less paid time off workers receive for training. Small companies are unlikely to be able to afford to train their workers during paid time off.

The principle of equal treatment requires that all people – and, in the context of the workplace, all workers – have the right to receive the same treatment, and will not be discriminated against on the basis of criteria such as age, sex, disability, nationality, race and religion.

Act CXXV of 2003 (2003. évi CXXV. törvény az egyenlő bánásmódról és az esélyegyenlőség előmozdításáról) on equal treatment and promotion of equal opportunities is the legal basis for ensuring equality and non-discrimination at work.

The Equal Treatment Authority (Egyenlő Bánásmód Hatóság) was, until 1 January 2021, the body that dealt with such issues. However, since then, the ombudsman for basic rights has taken over these responsibilities.

Equal pay and gender pay gap

Act I of 2012 on the Labour Code is the legal basis of equal pay and the gender pay gap. The principle of equal treatment states the following (Chapter 6, Article 12):

In connection with employment relations such as remuneration of work, the principle of equal treatment must be strictly observed. Remedying the consequences of any breach of this requirement may not result in any violation of or harm to the rights of other workers. The equal value of work for the purposes of the principle of equal treatment shall be determined based on the nature of the work performed, its quality and quantity, working conditions, the required vocational training, physical or intellectual efforts expended, experience, responsibilities and labour market conditions.

According to Hungarian Central Statistical Office data, the trend is positive: while the gender wage gap was around 20% in the mid-1990s, it had decreased to 11–15% by 2002, with the lowest gap (11.2%) recorded in 2004, the year that Hungary joined the EU. However, the wage gap went up to above 13% after 2007 and was around 16% in 2019 and 2020. Moreover, these averages conceal much wider gender pay gaps when the figures are broken down by age of workers, depending on which sector is concerned, and whether a company is private or state owned.

The latest data on the gender wage gap published by the Organisation for Economic Co-operation and Development in 2020 put the gap in Hungary at 12.4%, up from 9.4% in 2016.

No significant legislative support measures are in place in Hungary to facilitate the implementation of the relevant act.

It should also be noted that the new Constitution, the Fundamental Law of Hungary (25 April 2011), does not include specific provisions on equal pay. Article XV stipulates in general that everyone is equal before the law and that fundamental rights are guaranteed to everyone without discrimination (listing also the most common grounds of discrimination, including sex). When it comes to the supporting measures, the article refers only to the promotion of equality of opportunity and social inclusion and to the protection of families, children, women, the elderly and people living with disabilities.

Quota regulations

Hungarian legislation, for primarily historic reasons, generally tends to avoid using quotas.

For supervisory boards, no quotas apply. In the largest Hungarian companies, the proportion of women on supervisory boards was 5.3% in 2012.

Hungary applies a sort of indirect quota system for workers living with disabilities. Since 2010, a rehabilitation contribution has been payable by employers who have more than 25 workers with a proportion of workers with disabilities lower than 5%. Employers can choose whether they employ people with disabilities or contribute to the financial resources used by the government to support their employment and employability (Act CXCI of 2011 on allowances for people with disabilities, (2011. évi CXCI. törvény a megváltozott munkaképességű személyek ellátásairól és egyes törvények módosításáról), Articles 23–24).

Employers

• Confederation of Hungarian Employers and Industrialists (Munkaadók és Gyáriparosok Országos Szövetsége, MGYOSZ)
• Hungarian Industrial Association (Magyar Iparszövetség, OKISZ)
• National Association of Entrepreneurs and Employers (Vállalkozók és Munkáltatók Országos Szövetsége, VOSZ)
• National Association of Strategic and Public Utility Companies (Stratégiai és Közszolgáltató Társaságok Országos Szövetsége, STRATOSZ)
• National Federation of Agricultural Cooperatives and Producers (Mezőgazdasági Szövetkezők és Termelők Országos Szövetsége, MOSZ)
• Hungarian Federation of Consumer Co-operative Societies and Trade Associations (Általános Fogyasztási Szövetkezetek és Kereskedelmi Társaságok Országos Szövetsége, ÁFEOSZ)
• Hungarian Association of Craftsmen’s Corporations (Ipartestületek Országos Szövetsége, IPOSZ)
• National Federation of Traders and Caterers (Kereskedők és Vendéglátók Országos Érdekképviseleti Szövetsége, KISOSZ)
• National Youth Council (Nemzeti Ifjúsági Tanács, NIT)

Trade unions

• Confederation of Unions of Professionals (Értelmiségi Szakszervezeti Tömörülés, ÉSZT)
• Democratic League of Independent Trade Unions (Független Szakszervezetek Demokratikus Ligája, LIGA)
• National Confederation of Workers’ Councils (Munkástanácsok Országos Szövetsége, Munkástanácsok)
• Hungarian Trade Union Confederation (Magyar Szakszervezeti Szövetség, MASZSZ)
• Trade Union Cooperation Forum (Szakszervezetek Együttműködési Fóruma, SZEF)

Government

• Constitutional Court (Alkotmánybíróság, AB)
• Ministry of Culture and Innovation (Kulturális és Innovációs Minisztérium, KIM)  
• Ministry of Finance (Pénzügyinisztérium, PM)
• Ministry for Innovation and Technology (Innovációs és Technológiai Minisztérium, ITM)
• National Office for Vocational Education and Training and Adult Learning (Nemzeti Szakképzési és Felnőttképzési Hivatal, NSZFH)

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