Working Time Banking as a Tool for Flexible Work Organisation

Working time banking and its practical details have once again become a topical issue following a recent decision of the Constitutional Court and the extraordinary targeted inspection launched by the Ministry for Innovation and Technology in the autumn of 2021. Below, we examine this legal institution, which is frequently used by many employers and is regulated in detail by the Hungarian Labour Code.

1. What Do We Mean by Working Time Banking?

Working time banking is a longer reference period within which the employer may determine, with considerable flexibility, exactly how many hours the employee is required to work on individual scheduled working days. The use of working time banking is an important work organisation tool for employers, as uneven scheduling of working time can provide an effective response to fluctuating workloads. Typical areas of application include cases where, during certain periods, the performance of tasks regularly requires more time than the generally typical eight-hour working day, followed by periods when the actual time required to perform the tasks falls significantly below eight hours per day.

2. How Is Working Time Banking Determined?
When establishing a working time banking period, the starting point is the daily working time and the weekly duration of the general work schedule, which currently means work performed over five days per week, eight hours per day, for a total of 40 hours per week. In the case of work performed within a working time banking arrangement, the 40-hour-per-week/five-day values must be met on average over the entire working time banking period, while daily working time may be set between four and 12 hours and weekly working time may not exceed 48 hours.
By way of practical example, this means that if a four-week working time banking period is applied, the employer may organise the employee’s working time so that the employee works 48 hours in the first week, 36 hours in the second week, 36 hours in the third week and 40 hours in the fourth and final week. This example is illustrated in the following table:

Week 1 | Monday: 12 | Tuesday: 8 | Wednesday: 6 | Thursday: 10 | Friday: 12 | Saturday: Rest day | Sunday: Rest day | Total: 48
Week 2 | Monday: 6 | Tuesday: 6 | Wednesday: 10 | Thursday: 8 | Friday: 6 | Saturday: Rest day | Sunday: Rest day | Total: 36
Week 3 | Monday: 8 | Tuesday: 8 | Wednesday: 4 | Thursday: 10 | Friday: 6 | Saturday: Rest day | Sunday: Rest day | Total: 36
Week 4 | Monday: 8 | Tuesday: 6 | Wednesday: 10 | Thursday: 8 | Friday: 8 | Saturday: Rest day | Sunday: Rest day | Total: 40

In the above example, during the four-week working time banking period, the employee worked an average of 40 hours per week, while their daily and weekly working time was determined flexibly in line with the current workload.

As a general rule, the working time banking period is determined unilaterally by the employer. Its maximum duration is generally four months or 16 weeks, meaning that the working time requirements described above must be met on average over this period.
Under special rules, the duration of the working time banking period may be limited to a maximum of one week for young workers, while in certain jobs — for example, multi-shift work, seasonal work or standby-type activities — it may be six months or 26 weeks. Where justified by objective, technical or work-organisation reasons, it may even be up to 36 months. In the latter case, the working time banking period is established on the basis of a collective agreement. According to a recent decision of the Constitutional Court (Decision No. 18/2021 (V. 27.) AB), in the case of a 36-month working time banking period, a 12-month reference period applies, meaning that the requirements relating to average weekly working time must be satisfied over a 12-month period.

3. For Whom and Why Is Working Time Banking Worth Applying?

The flexibility offered by working time banking is particularly useful in areas such as transport, seasonal work or even for employees working in a home office system, where in many cases it is difficult to determine in advance exactly how many hours of work will be required on a given day. In these types of positions, the time frame for performing work can be adjusted to the specific tasks within broader limits than under the traditional eight-hour daily work schedule. By applying this legal institution, the employer has a good chance of avoiding situations in which it must pay the employee even when there is no task to be performed, or where a task requiring more than eight working hours can only be completed by paying overtime.

4. What Should Employees and Employers Pay Attention to When Applying Working Time Banking?

It is possible to hire new employees specifically by using an employment contract that includes working time banking; however, in such cases, the wording of the employment contract requires particular care. The same applies where the parties wish to amend the contract of an existing employee so that the use of working time banking is included. Another specific feature of this legal institution, regulated in detail by the Hungarian Labour Code, concerns the termination of employment of an employee employed under a working time banking arrangement, as special detailed rules apply in such cases.

Summary

The above shows that preparing an employment contract containing working time banking, amending an existing contract accordingly, or terminating the employment relationship of employees working under a working time banking arrangement are special matters even within the field of labour law. If you may be affected by this topic either as an employer or as an employee, please feel free to contact our law firm.