Hungary: New Forms of Employment

Flexibility is one of the keywords of the new Hungarian Labour Code, which entered into force on 1 July 2012. The new legislation contains novel types of employment, enabling employers to hire employees in Hungary in a more flexible structure.

Employee sharing: employment relationships established with more than one employer

One such form is when two or more employ­ers con­clude one con­tract with the same employ­ee to per­form the same tasks. Ear­li­er leg­is­la­tion did not allow this: employ­ers had to sign sep­a­rate part-time employ­ment con­tracts with the employ­ee. Since 1 July 2012 only one con­tract is suf­fi­cient.

Exam­ples include if one recep­tion­ist works for all the ten­ants of an office build­ing, or one IT spe­cial­ist repairs the com­put­ers of a group of com­pa­nies, which may or may not belong to the same own­er. A more com­plex job (eg, finan­cial con­troller or finan­cial direc­tor of sev­er­al com­pa­nies belong­ing to the same group) could also be per­formed in such a struc­ture to avoid hav­ing to con­clude par­al­lel employ­ment con­tracts for part-time jobs with the dif­fer­ent com­pa­nies.

In this employ­ee-shar­ing sce­nario, the par­ties must agree which employ­er pays the salary to the employ­ee, who is then par­tial­ly reim­bursed by the oth­er employ­ers.

All employ­ers are liable for the claims of the employ­ee. Thus, the employ­ee may claim the salary from any of the employ­ers, even if it has been agreed that only one employ­er pays the salary.

If it is not stat­ed in the con­tract oth­er­wise, any par­ty (eg, only one employ­er or the employ­ee) may ter­mi­nate the employ­ment rela­tion­ship with effect towards all (oth­er) employ­ers. This is impor­tant because, if an employ­ee has sev­er­al par­al­lel employ­ment rela­tion­ships and grave­ly breach­es his duties com­mits a big mis­take at only one of the employ­ers (which may well affect the trust vest­ed in him also by the oth­er employ­ers), the breach will serve as a rea­son to ter­mi­nate the employ­ment only at the com­pa­ny affect­ed by the breach. How­ev­er, if the employ­ee works in an employ­ee-shar­ing struc­ture, the breach will pro­vide a cause for the ter­mi­na­tion of the employ­ment with all employ­ers who share the employ­ee. In the case of employ­ee shar­ing, one sig­nif­i­cant breach of duty will lead to ter­mi­na­tion with all employ­ers. Fur­ther­more, the con­tract is ter­mi­nat­ed auto­mat­i­cal­ly if the num­ber of employ­ers is reduced to one; for exam­ple, if one of the com­pa­nies hir­ing the work­er is wound up with­out a legal suc­ces­sor.

With this new spe­cial type of con­tract, com­pa­nies can now save mon­ey and time.

Job sharing: shared scope of work

The reverse of the above employ­ment form is also pos­si­ble since the begin­ning of July 2012. Job shar­ing allows for one employ­er to con­tract with mul­ti­ple employ­ees. It is impor­tant, though, that the employ­ees per­form the same task for the employ­er. The work sched­ule of the indi­vid­ual employ­ees who share one job is com­plete­ly flex­i­ble.

This new type of con­tract also enables employ­ees to deter­mine their own work­ing sched­ule. If one employ­ee is absent from work (eg, sick), the oth­ers must fill in. This type of con­tract only works if employ­ees can coop­er­ate well with each oth­er. It fits work­ers who do not want to com­mit to fixed work­ing hours and are set to share work among them­selves – like moth­ers who are good friends and have young chil­dren. This type of employ­ment is like­ly to be used for less com­plex, rou­tine and repet­i­tive jobs, where employ­ees are eas­i­ly inter­change­able, like a recep­tion­ist or a typ­ist. Still, job shar­ing may be a suc­cess­ful tool to solve one of the most press­ing social prob­lems in Hun­gary: the return of young moth­ers to the job mar­ket.

If the par­ties do not agree oth­er­wise, the employ­er must pay the salary to the employ­ees in equal por­tions. The employ­er may ter­mi­nate the employ­ment of one of the employ­ees with­out affect­ing the oth­ers’ employ­ment rela­tion­ship. How­ev­er, the con­tract expires auto­mat­i­cal­ly once the num­ber of the employ­ees involved in one con­tract is reduced to one. In this case, the employ­er must pay the remain­ing employ­ee pay­ments (eg, the sev­er­ance pay­ment) that would be due if the employ­ee was giv­en notice.

Call on work

Anoth­er new type of con­tract that show­cas­es the flex­i­bil­i­ty of the new Labour Code is call on work. Here, the employ­er may noti­fy the work­er about the work­ing sched­ule at short­er notice. Instead of sev­en days, it is enough to inform the employ­ees only three days in advance. This way the employ­er can adjust work to actu­al work­load.

Should, for exam­ple, a car part man­u­fac­tur­er receive a last-minute order for an extra ship­ment, the man­ag­er can call work­ers to the fac­to­ry with only three days’ notice. This flex­i­bil­i­ty helps the man­ag­er ship the order in time with­out vio­lat­ing the employ­ees’ rights.

Job sharing may be a successful tool to solve one of the most pressing social problems in Hungary: the return of young mothers to the job market.

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schoenherr attorneys at law / www.schoenherr.eu