Comprehensive Upgrade Of Labour Law Regulations In Hungary

In the wake of the Government's commitments to cut spending, increase employment rates and reduce red tape, the recently released reform package features elements to tweak provisions of the Labour Code, which remained practically untouched since its introduction in 1992. Below is an overview of key provisions, some of which are still subject to further development from their current green paper status.

The current probation period limit of 3 months shall be increased to 6 months.

Annual holiday accrual and issuing shall be adjusted: instead of 1 year, only 6 months of maternity leave shall count as part of the holiday accrual period. Annual holiday may be issued in more than 2 instalments if this is in the legitimate business interests of the employer, and a partial in lieu (pecuniary) redeeming of holidays accrued during maternity leave shall be available subject to the employee's consent.

The employer shall have discretion in deciding that overtime shall be compensated by time-off in lieu of (pecuniary) overtime premium.

The scope of "simplified" employment shall be widened to facilitate its use by agricultural co-operations for certain simpler work processes. Again to reduce red tape, a simplified employment agreement has to feature only the very basics and additional details may be stated at the end of the employment period (calculated in workdays in case of such simplified employments).

With a primary focus on SMEs, available termination scenarios shall be extended, yet the current termination concept, which requires a negative statement concerning either the employees' capabilities or the employer's operations, is to be eliminated.

The damage liability of the employer shall be reduced to exclude...