Employment law in Hungary
Employment Law in Hungary is primarily governed by the Labour Code of Hungary (Act I of 2012 on the Labour Code). The Labor Code sets out the rights and obligations of employees and employers, ensuring fair treatment in the workplace. Additionally, various other laws, regulations, and EU directives influence labor law in Hungary.
Below is an overview of Employment Law in Hungary:
1. Employment Contracts
Written Contracts: Employment contracts in Hungary must be in writing. The contract should detail the terms of employment, including job responsibilities, salary, working hours, and the duration of the contract (whether it is fixed-term or indefinite). Failure to provide a written contract can lead to legal disputes or complications for the employer.
Types of Contracts: There are two main types of contracts:
Fixed-Term Contracts (Határozott Időtartamú Szerződés): These contracts are for a specified period and end on a predetermined date. They must clearly state the reasons for the fixed term.
Indefinite-Term Contracts (Határozatlan Időtartamú Szerződés): These contracts do not have an end date and are considered permanent unless terminated by either party.
2. Working Hours
Standard Working Hours: The standard working week in Hungary is 40 hours, typically divided into 5 working days of 8 hours each. This can vary depending on the industry, collective agreements, or employer policies.
Overtime: Overtime work is allowed, and employees who work beyond the regular working hours are entitled to compensation. The overtime pay rate is at least 150% of the regular hourly wage for the first 3 hours of overtime, and 200% for any additional overtime hours.
3. Minimum Wage
National Minimum Wage: Hungary has a national minimum wage, which is periodically adjusted by the government. The minimum wage applies to full-time adult employees and is determined annually. As of recent years, there is also a minimum wage for skilled workers, which is typically higher than the general minimum wage.
Living Wage: In addition to the minimum wage, there may be other wage supplements agreed upon through collective bargaining agreements in different sectors.
4. Paid Leave
Annual Leave: Employees are entitled to 20 days of paid annual leave per year, which is the minimum standard in Hungary. This increases based on age and other criteria, such as seniority and collective agreements. For employees over the age of 25, the annual leave entitlement increases to 25 days.
Public Holidays: Hungary observes a number of public holidays, such as New Year’s Day, Labour Day, National Day (March 15th), Christmas, and others. If employees are required to work on public holidays, they are typically entitled to extra pay (usually 150% or more of their regular hourly rate) or time off in lieu.
Sick Leave: Employees are entitled to sick leave if they are unable to work due to illness or injury. The employer typically pays the first 15 days of sick leave, and the Hungarian social security system provides compensation after that.
5. Termination of Employment
Notice Period: If an employer or employee wishes to terminate the employment contract, they must provide a notice period. The notice period depends on the length of employment:
Up to 3 years: 30 days’ notice.
3-5 years: 35 days’ notice.
Over 5 years: 40 days’ notice.
Dismissal: An employer can terminate an employee's contract for various reasons, including poor performance, misconduct, or redundancy. The dismissal must be justified, and employees have the right to contest a wrongful dismissal in court.
Severance Pay: If an employee is terminated without cause (such as redundancy or restructuring), they may be entitled to severance pay, which is generally calculated based on the employee’s length of service. Severance pay typically ranges from one month to several months’ wages, depending on the length of the employment.
6. Social Security and Benefits
Social Security Contributions: Both employees and employers must contribute to Hungary's social security system. The contributions cover various benefits, including:
Health insurance.
Pension contributions.
Unemployment benefits.
Employees contribute a percentage of their salary to social security, and the employer also contributes a corresponding percentage.
Unemployment Benefits: Employees who lose their jobs and meet the necessary conditions can receive unemployment benefits, which are calculated based on their previous earnings and length of employment.
7. Health and Safety
Workplace Safety: Employers are legally obligated to ensure a safe and healthy work environment for their employees. This includes providing training, protective equipment, and addressing any workplace hazards. Employees are also encouraged to report unsafe working conditions to their employer or relevant authorities.
Occupational Health Services: Employers must also provide access to health services and ensure regular health checks for employees working in hazardous conditions.
Workplace Inspections: The Hungarian labor inspectorate regularly inspects workplaces to ensure compliance with health and safety regulations.
8. Discrimination and Equal Treatment
Non-Discrimination: The Labour Code prohibits discrimination in the workplace based on race, gender, religion, sexual orientation, disability, or other protected characteristics. Both direct and indirect discrimination are banned.
Equal Pay for Equal Work: Employers must pay employees equally for doing the same or equivalent work, regardless of gender, age, or other discriminatory factors.
9. Maternity and Paternity Leave
Maternity Leave: Female employees are entitled to 24 weeks of paid maternity leave (this can be extended to 2 years in some cases). During the first 18 weeks of leave, the employee is entitled to maternity pay, which is typically based on her average earnings.
Paternity Leave: Fathers are entitled to 5 days of paid paternity leave immediately following the birth of their child.
Parental Leave: After maternity leave, either parent can take additional parental leave (for up to 3 years), but this is usually unpaid or supported at a low level through state benefits.
10. Trade Unions and Collective Bargaining
Trade Unions: Employees in Hungary have the right to join or form trade unions. Trade unions play an essential role in negotiating better wages and working conditions through collective bargaining.
Collective Bargaining Agreements (CBAs): In certain sectors, collective agreements are negotiated between unions and employers, which can provide better working conditions, wages, and other benefits than those stipulated in the Labour Code.
11. Foreign Workers
Work Permits: Foreign workers who wish to work in Hungary must obtain a work permit. Citizens from European Union (EU) countries do not require work permits to work in Hungary, but non-EU citizens must apply for a work visa.
Equal Treatment: Foreign workers are entitled to the same rights and protections as Hungarian employees, including minimum wage, social security benefits, and workplace protections.
12. Child Labor and Forced Labor
Child Labor: Hungary has strict regulations regarding child labor. The employment of children under the age of 15 is prohibited, with limited exceptions for light work that does not interfere with their education.
Forced Labor: Forced labor is prohibited by law in Hungary. Employees cannot be forced to work under threat or coercion, and any such practices are subject to criminal penalties.
13. Employment Dispute Resolution
Labor Courts: If disputes arise between employees and employers, such as issues with dismissal, wages, or working conditions, they can be resolved through labor courts. These courts handle labor-related disputes and provide a legal platform for workers to seek justice.
Mediation and Arbitration: Prior to taking disputes to court, mediation and arbitration are encouraged as alternatives to resolve disagreements.
Conclusion
Hungary's Labour Code provides comprehensive protections for employees and regulates various aspects of employment, including working hours, contracts, wages, benefits, and termination. The legal framework aims to balance the interests of employers and employees, providing clear rights for workers while also establishing employer responsibilities.
Employees in Hungary are entitled to strong protections, including paid leave, protection against discrimination, and social security benefits. Additionally, Hungary’s membership in the European Union influences employment law and ensures that Hungarian workers benefit from EU labor standards.
RELATED Blog
0 comments