April 26, 2013

4 key benefits of new Hungarian labour code

The goal of new Hungarian Labour Code is to increase the level of flexibility in labor contracts, improve business environment and at the end of the day to increase employment in the country.

We can identify 4 key positive changes for businesses in the new act (valid from 1st January 2013):
source: http://ucslabordaily.com
#1: More simple termination of employement contract
The employment contract can either be terminated or terminated with immediate effect. Objective protection from termination are reduced, e.g: employees retiring within 5 years and employees having children under the age of 3 have less protection; incapacity for work no longer means protection from termination.
In contrast to the older rules, under certain circumstances definite-term employment relationships may be also terminated before their natural expiry, by giving notice.

#2: More flexible rules for compulsory minimum salaries
In contrast to the old minimum salary regime, the new Labor Code includes the government’s right to determine a varying level of minimum salary for different types of employees (e.g. employees working at different levels or in different geographical areas). Practicly it provides more moderate minimum salaries in regions with high unemployement, e.g: Eastern Hungary.

#3: More flexible working time
Multi-shift and uninterrupted work are no longer related to the work schedule of the employee but to the activity of the employer. The definition of multi-shift activity was modified: we can talk about multi-shift work schedule if the operation of the employer reaches 80 hours a week. It's easier to schedule working tasks to Sunday and to national holidays.

#4: More overtime
Although the average annual hours worked in Hungary was 1980 in 2011 (vs: 1787 hours in the US and 1413 hours in Germany), the annual overtime of 250 hours are allowed in the new Labor Code, up from 200 at older regulation.



See also: 
RSM DTM Hungary: Most important changes of the Labour Code
Law.com: New Labor Code in Hungary