After a significant amendment to the Labour Code in 2023, Hungary has made considerable legislative changes to its laws pertaining to labour, occupational health and workplace safety, platform work and foreign workforce. These amendments impact several key laws and affect both employers and workers generating new challenges seeking to comply with the new legal conditions.
Lessons learnt?
To comply with the EU Directives aiming to ensure transparent and stable work conditions as well as proper work-life balance, several provisions of the Labour Code were amended in 2023. Though takeaways from the judicial practice are yet to come, there are certain lessons which have already been learnt by employers. The most challenging issue regarding the legislative amendments was handling contract modification requests initiated by employees who are raising children under the age of eight or performing other caregiving activities. These employees may request amendment to some of their employment conditions, such as the location (eg, remote work), working hours, and work schedule, which the employer may only refuse for justified reasons. A question arose as to whether any employee with a young child could request this, or additional specific circumstances must be proven. The current legal practice supports the latter view, ie that it is not sufficient to justify the request simply because remote work makes it easier to accompany the child home from school. However, if the child’s special circumstances (eg, talent development) justify the modification, these may make the amendment proposal justified. From an employer’s perspective, it is necessary toconsider on what grounds such request may be refused. An employer may consider the extent to which accommodating the employee’s request would require reorganising work arrangements and conditions, and whether the request can be reasonably integrated into the job role (eg, whether the tasks can be performed remotely). An important and increasingly central consideration in employer decision-making is how meeting one employee’s request might impact other colleagues’ working conditions, ensuring compliance with the principle of equal treatment.
Rising safety and labour fines
The amount of occupational safety fines increased significantly due to the amendments of the respective laws. The lower limit of fines was doubled to HUF 100,000 per each seriously endangered employee, while the upper limit was raised to ten times the former level, reaching HUF 100,000,000. Special rules apply to micro-, small-, and medium-sized enterprises, as well as natural persons, if no fatal workplace accident occurs due to the employer’s negligence. The maximum fine is HUF 25,000,000 for micro- and small-sized enterprises and natural person employers, and HUF 50,000,000 for medium sized enterprises.
From 1 March the minimum amount of labour fines was increased from HUF 30,000 to HUF 150,000, and specified fines-amounts increased as well. Violations include among others non-compliance with Hungarian employment laws, such as undeclared employment, breaching the rules concerning the lawful establishment of an employment, maximum working hours, minimum annual leave, and conditions for temporary work, pregnant women, young workers, etc. Fines apply if foreign employers fail to meet obligations regarding declarations and data provision in connection with posting employees to Hungary for rendering cross-border services. When it comes to third-country nationals residing in Hungary under guest worker status, a labour fine of ten times the minimum wage per affected employee must be imposed if an employer violates the notification requirement related to the termination of the employment.
Key changes to occupational health and safety regulations
In January 2024, the National Occupational Safety Policy for 2024-2027 was adopted, marking the start of significant changes in occupational safety and labour regulations due to strategic and policy planning. The first amendment came into effect in February 2024 in relation to occupational safety education. Employees in specific roles may participate at a general training programme, allowing employers to use predefined training materials instead of arranging tailor-made trainings by an employer. Trainings may be completed through internal electronic networks, facilitating easier access and learning for employees. This change aims to make occupational safety education more efficient and flexible, including digital access
From 1 September 2024, medical examinations will undergo significant changes. Except for specific cases defined by legislation, the general mandatory occupational health-check obligation concerning all employees will be terminated. Jobs falling under the scope of mandatory medical fitness examination will be detailed in a regulation, which is yet to come. Although this change is planned to take effect in September, many employers may benefit from being released from the mandatory health check obligation (in certain positions). However, maintaining a focus on medical fitness beyond mandatory cases is advisable and inevitable for employers. Workplace accidents and potential claims arising from these or refusing the performance of certain job-related tasks by an employee referring to not being fit enough for the particular task, may put additional burden on employers if no fit for work checks had been performed at the beginning of the employment. Therefore, it is still advisable to consider for an employer to opt for occupational medical examinations.
Heading into the future of employment law in the 21st century: upcoming regulation in the field of platform work
One of the main questions regarding platform work is the determination of the employment status or the lack thereof. Originally, the EU Directive’s proposed that if the performance of the platform worker is supervised, the existence of an employment must be assumed. Later, this proposal was amended so that each Member State must define the requirements, whenever an employment relationship in the frame of platform work can be assumed.
The proposal places great emphasis on the limitation of data processing of the digital platforms, the transparency of the platform work and human rights. In relation to these principles, persons carrying out platform work will have to be able to get clarification and further information from a contact person, regarding any decisions which have been made or supported by a decision making system. In other words, there must be human oversight over all automated decision-making systems.
In Hungary the court stated recently that the activity carried out on a digital platform cannot be considered a unique scheme, so the nature of the legal relationship defining it must be examined on a case-by-case basis. According to a Hungarian precedent-setting judgment, if a given activity may be performed both in the context of a civil law contract and employment, the contractual intention of the parties must always be examined in the first instance. Flexible working time, performance payment and holidays are not essential categorisation instruments; economic dependency is not a decisive factor, and an employment cannot be envisaged where the number of an employee’s working hours depend purely on the needs of the person organising the ‘platform work’. Following these principles, in the given case the court established that the parties had indeed entered into a civil law relationship and therefore denied reclassifying it as employment. Although the judgment states that the use of a digital monitoring system may not necessarily be a basis for the existence of a right to control and thus qualification as an employment relationship, the domestic legislator will be obliged to properly consider and regulate how the use of automated systems, including a digital monitoring system, affects the classification as an employment.
Multifunctional high-volume investments in the real estate sector: pay more, get more in return. How the Hungarian revised Golden Visa works and what are the requirements to get this simplified visa?
The Hungarian government has revised the Golden Visa Programme and made amendments to the regulation on golden visa and residency rules. The Golden Visa Programme provides a simplified visa process with more lenient conditions for those who comply with the conditions of the programme.
A person holding the golden visa and the Hungarian residence permit is free to move within the Schengen area without any restrictions. It means that such persons can cross the borders of the Schengen area member countries (all EU nations except Ireland and Cyprus) without any passport, border and personal documentation control. This right applies to the family members of the guest investor.
Who can apply for the golden visa? From 1 July 2024, those who count as guest-investors, can apply for the revised Golden Visa and Residency Programme. Guest investors from non-EU or European Economic Area countries are those who (i) subscribe EUR €250,000 worth of investment unit in a real estate fund, or (ii) acquire a real estate located in Hungary for at least EUR €500,000, or (iii) who donate at least EUR €1,000,000 to any Hungarian higher education institution. The first option seems to be the most attractive to the guest-investors, who – together with their close relatives – may be eligible to a 10 years long residence permit as a result
of the investment.