New Year, New Rules in the Hungarian Labour Code

The implementation of EU Directives 2019/1152 and 2019/1158 brings significant changes to the Hungarian Labour Code effective from 1 January 2023.

These directives aim to promote:

• Better work-life balance for parents and carers; and
• More transparent and predictable working conditions.

Let’s take a look at the key changes.

New and Revised Types of Leave

A primary objective of Directive 2019/1158 is to ensure equal opportunities and equal treatment for men and women in the labour market by facilitating a better balance between the work and family lives of working parents and carers.

Paternity Leave

Paternity leave is a period of leave granted to fathers and equivalent co-parents following the birth of a child to enable them to provide care.

As a result of the amendment:

• The duration of paternity leave increases to 10 working days.
• The leave must be granted in two instalments.
• Fathers are entitled to 100% of their absence pay for the first five working days.
• For days 6 to 10, they are entitled to only 40% of their absence pay.

Employers may nevertheless choose to grant longer leave periods or continue paying the employee’s full salary.

The granting of paternity leave may not be postponed, and from January onwards employers may no longer interrupt or recall employees from paternity leave.

Remarkably, an employee remains entitled to paternity leave even if the child is stillborn or dies.

Parental Leave (New)

Parental leave is a newly introduced legal institution providing leave to parents following the birth or adoption of a child for childcare purposes.

Until the child reaches the age of three:

• Employees are entitled to 44 working days of parental leave per year.
• Employers must grant the leave upon the employee’s request, provided such request is submitted at least 15 days in advance.
• In exceptional circumstances, the leave may be postponed by up to 60 days.

Employees taking parental leave are entitled to 10% of their absence pay.

Social security contributions must still be paid on an amount equivalent to at least 30% of the minimum wage, even where the actual remuneration falls below that threshold. In addition, the amounts received as child care benefits (GYED and GYES) are deducted from the parental leave payment.

As with paternity leave:

• The leave cannot be interrupted.
• Employers may not exercise their right to interrupt leave once parental leave has commenced.

Carer’s Leave

Carer’s leave allows employees to provide personal care or support to:

• A relative requiring substantial care or support due to a serious medical condition; or
• A person living in the same household as the employee who requires such care.

The entitlement amounts to five working days.

Since this is not a conventional paid leave entitlement but rather an excused absence:

• No remuneration is paid.
• Employees will generally be required to pay healthcare service contributions for the period of absence, although employers may choose to cover this cost.

The need for care must be certified by the treating physician of the person requiring care.

Employee’s Right to Request Modification of Employment Terms

What Does This Right Cover?

From January onwards, employees:

• Raising a child under the age of eight; or
• Acting as carers,

may submit a written and reasoned request asking their employer to provide:

a) a different place of work;
b) a different working schedule;
c) remote working arrangements; or
d) part-time employment.

How Quickly Must the Employer Respond?

The employer must respond within 15 days.

If the request is rejected:

• The employer must provide a detailed, genuine, and adequate explanation.

Where:

• The employee disagrees with the justification; or
• The employer fails to respond within the deadline,

a court may substitute the employer’s consent for the employment contract amendment. The employee must then be employed under the requested conditions, and any losses suffered due to an unlawful refusal must be compensated.

Refusal or Postponement of Leave

Employers may refuse or postpone already approved parental leave by up to 60 days if granting the leave during the requested period would seriously disrupt the proper operation of the business due to exceptional economic interests or significant operational reasons.

In such cases, employers are subject to obligations relating to:

• Reasoning and justification;
• Evidence;
• Compensation for losses and costs arising from the postponement.

Exemption from Availability and Work Obligations

The amendments codify established judicial practice.

In addition to incapacity for work (such as illness, pregnancy, breastfeeding, etc.), employees will be exempt from their duty of availability during:

• Periods of health-related unfitness for work;
• Absences justified by particularly compelling personal, family or unavoidable circumstances; and
• Periods spent personally caring for a relative or household member requiring care due to a serious health condition (carer’s leave).

Termination of Employment

Directive 2019/1158 provides protection against dismissal where an employee:

• Requests or takes paternity, parental or carer’s leave; or
• Exercises the right to request flexible working arrangements.

The new rules therefore require employers to provide reasons for termination even in situations where no justification would otherwise be required, such as:

• During a probationary period;
• In relation to retired employees; or
• In relation to senior executive employees.

For example, if an employer terminates an employee’s employment because they wished to take one of the new forms of leave or sought to amend their employment terms, the employer must provide the reasons for termination within 15 days from 1 January onwards.

Abuse of Rights

EU Member States must ensure protection against discrimination and unfavourable treatment by employers.

An abuse of rights occurs where a legal right is exercised in a manner contrary to its intended purpose. Alongside the principle of good-faith exercise of rights, the prohibition of abuse of rights is a fundamental principle of labour law.

Conduct that may constitute abuse of rights includes behaviour aimed at:

• Harassing others;
• Suppressing freedom of expression; or
• Producing such effects.

The law also confirms the courts’ authority to substitute a required legal declaration where one party unlawfully refuses to make a declaration required under employment legislation.

Given the inherently hierarchical nature of employment relationships, where employers generally possess broader powers of direction, instruction and supervision, the implementing legislation seeks to strengthen employees’ ability to enforce their rights.

The new provision (Section 7(3) of the Labour Code) provides that:

• The claimant (typically the employee) must prove the facts, circumstances and disadvantage forming the basis of the alleged abuse.
• The party exercising the right (typically the employer) must prove that there is no causal link between those facts and circumstances, the disadvantage suffered, and its own conduct.

Broader Information Obligations

Member States must ensure that employers provide employees with written information regarding the essential aspects of the employment relationship.

As a result:

• Core information must be provided as soon as possible and no later than one calendar week after the first working day.
• The general deadline for providing information is therefore reduced from 15 days to 7 days.
• Other employment information must be provided within one month from the employee’s first actual working day.

What Information Must Be Provided?

The previously required information remains in place, supplemented by the following:

• Working time scheduling (working days, possible starting and finishing times, overtime arrangements), except where daily working hours do not exceed 30 minutes;
• The employer’s training policy and the duration of training available to employees (both mandatory and optional training, excluding training covered by a study agreement);
• The authority to which the employer pays employment-related public charges (the Hungarian Tax Authority, NAV);
• The place of work;
• The commencement date and duration of the employment relationship.

Employees Working Abroad

Where foreign assignments are expected to exceed 15 days, employees must additionally be informed within 7 days about:

• The remuneration applicable at the place of work;
• The rules and conditions governing reimbursement of travel, meal and accommodation expenses; and
• The address of the national website containing key information concerning the rights and obligations of employers providing cross-border services and posted workers.

Conclusion

It is clear that, as a consequence of complying with the above EU directives, the Hungarian Labour Code underwent significant changes in 2023. It is therefore particularly important for both employers and employees to obtain professional legal advice whenever labour law issues arise.

If you still have questions after reading this article, please do not hesitate to contact our firm.