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New ammunition in the hands of employees in case of dismissal - how the Labour Code may change from 1 January

The most significant amendment to the Labour Code in recent years was submitted to the Parliament two weeks ago, stated Gábor T. Fodor, labour lawyer, whilst discussing the changes expected to enter into force on 1 January 2023 at the HR Portal conference. Here are some of the key issues to watch out for as an employer.

labour law, change, Labour Code-

The current package of amendments is a transposition of two EU directives (2019/1152 and 2019/1158). Both were due to be transposed into Hungarian law in early August. However, it was only in early November that the amendments were submitted to Parliament, and if passed, it could enter into force on 1 January 2023.

The media highlighted the proposals in respect of doubling the length of paternity leave, but there are some more substantial elements as well. One of the most important amendments, according to Gábor T. Fodor, is the tightening of the prohibition of abuse of rights (Article 7, Paragraph 3) such that if an employee feels that there has been an abuse of rights and states the reason (why he believes his employer has dismissed him), the burden of proof, which was previously on the employee, will be on the employer.

The new legislation will affect the way all employers operate, forcing companies to be more thorough in their administration, to measure performance objectively, and for HR to provide better support to middle managers. In other words, before deciding on redundancies, an employer must be transparent and quantifiable in its criteria. For example, only letting people go below a certain measurable, performance level.  'Poor performance' alone is not an adequate justification for dismissal even before this change. The stakes are high: the consequence of wrongful dismissal is not a maximum of 12 months' absence pay, but reinstatement and payment of wages until the end of the case, which could take several years.

Information: what must be included

There has been a proposed change in respect of the content and due dates of delivery to certain elements of the employment contract. The orientation document must be given to the employee within 7 days of the start of the employment relationship (now 15 days), which must contain this information:

- who the employer is, who is entitled to exercise the right of employment
- the start date and the content of the employment relationship, 
- the place of work
- the duties of the job
- the duration of the daily working time, the days of the week on which working time may be scheduled, the starting and finishing times of the scheduled daily working time, the possible duration of any extraordinary working time, the specific nature of the employer's activities (a new point in the bill)
- the method of accounting of wages, the frequency of payment, the date of payment
- remuneration in addition to the basic salary, allowances
- the number of days off, the method of calculation and the rules for expenditure
- rules for determining the period of notice
- the employer's training policy, the training courses available and the duration of such courses
- the authority to which the employer pays public charges
- whether the employer is covered by a collective agreement

If there is an existing employment relationship, the above does not need to be provided unless the employee requests such within 3 months. In the case of public employers, Gábor T. Fodor proposes that they should provide a general update in the interim, and after a while, everyone should receive one.

An important rule: what is already detailed in the employment contract does not need to be in the informational leaflet again. 

In case of changes in the future, the notification must be given immediately - when the change comes into force.

Dr. Fodor T. Gábor

Dr. Gábor T. Fodor

Paternity leave

There was a large reaction to the increase in paternity leave. Fathers will now be entitled to 10 days' leave for the birth of a child, instead of the current 5. But they will only get 100% of the leave allowance for 5 days, and only 40% of the allowance for the next 5 days. 5 days will be reimbursed by the state to the employer, a regulation will be issued soon. 

Parental leave is also new, but only 10% of the absence allowance is paid, so workers can stay at home for a fraction of their salary. 
If the employer wants to interrupt the employee's leave, it will have to give reasons under the new rules. Good advice for workers is to switch off their phones during their leave and not check company emails.

A new provision is that workers can request changes to their place of work, working hours, teleworking or part-time work until their child is 8 years old, except during the first six months of employment. You must make your request in writing and give reasons for it. The employer must reply within 15 days, also giving reasons. If the employer does not reply or if the reasons are unlawful, the court will decide.

Many dismissals do not need to be justified: probationary period, fixed-term contract, retired worker, manager. However, if someone is dismissed during a probationary period following paternity leave, for example, the employee can ask for justification within 15 days and the employer has 15 days to respond. So the justification must be readily available. If the court finds an abuse of rights, the employee must be reinstated, his salary must be paid during the labour lawsuit.

The reasons for the dismissal of an invalidity pensioner must also be given.

Fixed-term contracts

In the case of fixed-term employment contracts, it has generally been an unlawful practice for an employer to employ an employee long-term. Of course, it is understandable why this is to the employer's advantage: no notice period, no severance pay, and no termination without cause. A new feature of fixed-term contracts is that if a new fixed-term contract is concluded with the same employer within 6 months of its expiry, no probationary period can be set.

Another new feature is that the probationary period can also be pro-rated for employment contracts of less than one year. For example: if I hire someone for 3 months, one-quarter of the 3 months probationary period (23 days) can be probationary. The maximum probationary period is still 3 months or 6 months for a collective agreement.

Gábor T. Fodor pointed out that it has been in labour law for a long time, but few people have understood that in case of working abroad for more than 15 days (performance of a contract, secondment to a parent company, temporary agency work), the employee must be paid the foreign wage. For example, based on the local collective agreement for the profession concerned. Gábor T. Fodor has heard of a case where an employer in Spain was fined €170 000 for such an infringement. The lesson is: whenever you send someone abroad to work, pay the local lawyer and find out about the local rules. If you are going to work for more than 15 days, you must inform the employee seven days before departure about the place and content of the work, cash benefits, benefits in kind, travel and meal allowances, and the currency of the benefits.


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