Employment & Benefits, Hungary updates

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

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

Intragroup transfers of HR data
Schoenherr Attorneys at Law
  • Hungary
  • September 20 2017

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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