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New COVID-19 restrictions in Hungary: consequences for employers

Company groups, Employment, labour law, Medium-sized companies, News, Start-ups, Trade affairs / / , , , , ,

The restrictions (of Gov. Decree 484/2020 (XI. 10.)) apply as of 11 November 2020 for the whole of Hungary, effective until 11 December 2020. These restrictions may be prolonged if necessary.
The current rules concerning wearing masks, social distancing and border crossing remain in effect, while wearing masks is now obligatory in public spaces designated by the local councils in cities exceeding 10,000 inhabitants.

I. Curfew between 20:00 and 5:00 with an exemption regarding going to work

During the curfew, only people going from their homes (place of residence) to work and back home from work can be in public spaces. A sample of the certificate to be issued by the employers can be found on the Government website: https://kormany.hu/hirek/kijarasi-tilalomrol-szolo-igazolas

II. Rules regarding education

Nurseries, kindergartens and primary schools remain open for those under 14 years of age. Online education has been introduced from grade 9 in middle schools and colleges/universities, and dormitories are closed.

III. General ban on events

All events are banned. This also applies to all professional events held in person (conferences, workshops, etc.).

IV. Restrictions on trade and catering

Restaurants are closed and only takeaway and home delivery are allowed, however, factory canteens may remain open. Shops, stores and other services except for pharmacies and petrol stations must close at 19:00, after which only those working there may stay on site. Hotels may only accommodate guests arriving on business, economic or education purposes.

V. Sanctions

In the event of violation of the rules applicable to events or institutions, shops and facilities, the police may close the area, premises or institution (except for educational institutions) for a period of one day to one year and impose a fine of HUF 100,000 to HUF 1,000,000.

VI. Economic protection measures

In order to protect jobs, the Government has also introduced economic protection measures (Decree no. 485/2020. (XI. 10.)), as follows.

1. Tax allowance
For November 2020 employers operating in the scope of activity listed in the Decree shall not need to pay social contributions and vocational training contributions. Small entrepreneurs within the scope of activity listed in the Decree do not need to count personal payments to their small business tax base relating to employees who would have been dismissed due to the state of emergency, provided that these employees are not dismissed and receive their salaries.

2. Provision for hotels
The state will reimburse 80% of the price (net income) of bookings booked for within the next 30 days and received by the hotels registered in the National Tourism Data Providing Centre (Nemzeti Turisztikai Adatszolgáltató Központ) until 8 November 2020, provided that the hotel employees are not dismissed and receive their salaries.

3. Wage subsidies
50% of the wages for November 2020 of the employees of restaurants and leisure facilities listed in the Decree will be reimbursed by the state in the form of a subsidy, provided that the employees are not dismissed and receive their salaries.

The ‘actual main activity’ is the activity which generated the most revenue, which must be at least 30% of the revenue in the previous six months.

There are still many open questions regarding the implementation of the governmental measures described above, we shall provide information on possible further measures after they have been published.

New COVID-19 restrictions in Hungary: consequences for employers Read More »

Exemption from work during adoption

Employment, labour law, Medium-sized companies, News, Start-ups / / , , , ,

Pursuant to the amendments of Act I of 2012 on the Labour Code (“Labour Code”) effective as of 1st September 2020, the employee shall be exempted from the requirement of availability and from work for a maximum of 10 working days per year during the period of preparation for adoption.

The pre-adoption phase provides an opportunity for parents intending to adopt and the child to be adopted to meet, introduce themselves and start to get to know each other before the adoption. Also during this period, the living conditions of the parents wishing to adopt will be assessed, counseling will be provided by the child protection service and, if required, a free adoption course will be conducted.
As the procedure involves a number of tasks for the employee, the legislator considered it necessary to exempt the employee from his/her requirement of availability and work during this period.

The exemption is available to both prospective parents, who are entitled to an absence fee for this period. The exemption shall also apply in the case of an executive employee, from which the employment agreement of the executive employee may not deviate.

The conditions for claiming the exemption are defined by the Labour Code as follows:
– exemption from availability and work is possible on the basis of a certificate issued by the adoption organization;
– the employee may claim the exemption within 90 days following the issuance of the certificate;
– the employee shall inform his/her employer at least 5 working days in advance of his/her intention to claim the exemption;
– the employee must be exempted on the dates specified in his/her request, therefore it is up to the employee to determine the dates;
– the Labour Code does not stipulate that the exemption of 10 working days should be granted to the employee only continuously, therefore the employee may request that the exemption be granted in several installments within 90 days from the issuance of the above-mentioned certificate.

If you have any questions regarding the above, please feel free to contact us.

Exemption from work during adoption Read More »

President of HDPA tempers position on thermometers!

Company groups, Data protection, Employment, labour law, Medium-sized companies, News, Start-ups / / , , , ,

The Head of the Hungarian Data Protection Authority in his interview made an announcement contrary to the Authority’s previous official position.

Unlike in Spring, in the current epidemiological situation in Hungary it is no longer disproportionate to implement body temperature measurement as a general measure, however, recording the results is still considered unjustifiable, because as health related data it would be considered a special category of personal data which should be especially protected.

The Head of the Hungarian Data Protection Authority in his interview made an announcement contrary to the Authority’s previous official position, that unlike in Spring, in the current epidemiological situation in Hungary it is no longer disproportionate to implement body temperature measurement as a general measure, however, recording the results is still considered unjustifiable, because as health related data it would be considered a special category of personal data which should be especially protected.

As a reminder, the Authority’s guidelines issued on 11 March 2020 and its confirmatory official position issued on 28 April 2020 considered disproportionate the requirement of screening tests with any diagnostic device (in particular, but not exclusively, with a thermometer), as the epidemiological situation in Spring did not warrant such measures.

The HDPA president’s statement did not affect the rest of the previously issued guidelines and official position, therefore all data processing in connection with the novel coronavirus epidemic such as body temperature measurement may only be introduced in the legitimate interest of the employer, substantiated by a proportionality test and the measurement shall be conducted by healthcare professionals or under their professional supervision under Article 9 (3) of the GDPR.

The Authority invariably requires employers to prefer measures which do not require the processing of personal data (basic hygiene, provision of disinfectants, adequate cleaning, provision of protective equipment, distance between workers).

Should you have any questions regarding the above, feel free to contact us.

President of HDPA tempers position on thermometers! Read More »

Wage Aid Provided For Reduced Working Hours Changed

Employment, labour law, Medium-sized companies, News, Start-ups / / , , , ,

On 29 April 2020, beneficial changes enter into effect in the aid provided for reduced working time employment.
The wage subsidy may be requested if the reduced working time reaches at least 25% and at most 85% of the previous working time, and no longer has to reach 4 hours a day.

The amount of the maximum wage subsidy depends partly on the lost working time and partly on twice the net minimum wage, therefore the maximum wage subsidy available increased to HUF 112,350 according to the decree, contrary to statements made in the media, according to which the maximum amount remains unchanged.

Further good news is that there will be less administration, an agreement on the incomprehensible individual development time is only mandatory if the reduced working hours exceed half of the previous working hours, and wage subsidies may now be granted for home office work, remote work, temporary agency work and during the working time frame.

Headcount maintenance and not ordering extraordinary working hours (overtime) will only apply to employees receiving the wage subsidy.

Unfortunately, the most uncertain circumstance has not been removed from the requirements, as employers still have to credibly prove the undefined ‘interest of national economy’ to retain employees.

Wage Aid Provided For Reduced Working Hours Changed Read More »

Derogations in the application of Labour Code for the duration of state of emergency

Employment, labour law, Medium-sized companies, News, Start-ups / / , , ,

Effective as of today (19 March 2020) until 30 days after the end of state of emergency, the Labour Code shall be applied with derogations as a part of the economic measures announced yesterday. Please see our brief summary as follows:
1. Derogations to be applied unilaterally by the employer:

a) employer may also amend the announced work time schedule within 96 hours of the start of the daily working time; it is important to note that the rules of announcing annual paid leave/ vacation did not change and must be notified 15 days in advance;

b) employer may unilaterally order home office/ remote work for the employees;

c) the employer may implement the necessary and justified measures to check employees’ health status. The Government Decree does not specify the measures necessary and justified, therefore the employers must consider this for themselves, in compliance with the data protection legislation and the HDPA’s legal opinion, as the application of the GDPR has not been suspended for the duration of the state of emergency. It mainly relate to the mostly popular planned fever measure which may only be applied with the restrictions provided by the HDPA.

Collective agreement provisions deviating from the above may not be applied for the duration of the state of emergency, which also means that in any other question the Collective Agreement is applicable.

2. Derogations to be applied by the separate agreement of the parties:
The Government Decree fully extends the possibility of separate agreement between the employer and the employee, which may derogate from the provisions of the Labour Code. It may only be interpreted – although there is no express provision – that it allows the employers to agree with the employees on conditions that are detrimental to the employees – while earlier the Labour Code only allowed deviation in favour of the employees. In that way, thus allowing the establishment of specific and flexible rules for the duration of the state of emergency.

3. The right approach would be if before conclusion of the separate agreement with employees in matters are beyond the above cases and regulated in the Collective Bargains, the employers consult with the Trade Union and the Works’ council if the planned deviations will affect the bigger group of the employees.

The economic measures of the Government in relation to the coronavirus epidemic

On 18 March 2020 the prime minister has announced exceptional economic measures to reduce the impact of the coronavirus epidemic.

According to these measures, in the following sectors the employers shall not pay contributions after their employees, and the contributions of their employees are also significantly reduced (they shall not pay pension contribution, and health insurance contribution is reduced to the minimum set by law) until 30 June 2020:

• tourism
• hospitality ( gastronomy, hotels etc.,)
• entertainment
• sport
• cultural services
• passenger transport

In the above sectors, lease agreements may not be terminated and the amount of rent cannot be raised during this period.

Taxi drivers under ‘small enterperneurs” tax payers are exempted from tax payment.

The tourism sector is also exempted from paying the tourism development contribution.

The Government Decree foresees further legislative changes. We are monitoring for further possible government measures continuously.

The purpose of the publications announced on our website is to provide a brief, concise information on certain issues. The content of this website and the publications is not exhaustive and does not constitute a legal advice. Should you have any specific questions or inquires regarding any issues investigated by our publications, please contact us and we will be happy to be at your disposal.

Derogations in the application of Labour Code for the duration of state of emergency Read More »

HDPA issues statement on the monitoring of employee e-mails

Company groups, Data protection, Employment, labour law, Medium-sized companies, News, Start-ups / / , , , ,

At the end of last year, the Hungarian Data Protection Authority (HDPA) issued a statement, in which the HDPA commits itself to take all possible actions and use all available means – including adequate legal consequences to prevent further infringements – to stop the widespread practices of unlawful processing of employee e-mails. 
How does personal data enter the picture?

Even if an e-mail address was provided for the purposes of working, it might eventually be used by the employee for personal matters, or third parties might send personal e-mails to the address, which turns this into a question of data privacy. Although some advisable steps can be taken to prevent the personal use of work e-mail addresses (i.e. the prohibition of personal use of work assets), it is not seemingly possible to fully separate the two uses, since receiving a personal e-mail from a third party is generally outside the employer’s or employee’s control. It is also important to note that if an employee uses the work e-mail address for personal matters despite possible explicit prohibitions set in place, such an act will still be attributed to the employer’s data processing, thus the processing of personal data is unavoidable.

What is expected of the employers?

First and foremost, employers should determine the lawful ground of the processing. The HDPA highlighted storing, archiving and searching/ indexing as the most common processing actions performed on employee e-mails. Naturally, employers have a vested interest in the monitoring of employee e-mails, as it is necessary to control and maintain the work flow, therefore the lawful ground must be substantiated by a thorough balancing test prior to the processing. Once the lawful ground is established, it is advisable to prepare an SOP on the monitoring process.

The employer must duly inform the employees about the monitoring of work e-mails, the data processing and whether or not personal use of work e-mails is permitted or prohibited at the workplace.

Before or during the monitoring, the employer must take all reasonable steps to separate work related and private e-mails. In accordance with the principle of accountability, the employer should maintain a record of the steps taken during monitoring.

Considering the fact that almost every employer provides its employees with an e-mail address for work purposes, this statement is important to all employers who wish to be compliant with the GDPR and employees interested in the protection of their private lives.

HDPA issues statement on the monitoring of employee e-mails Read More »

The End of The Year From HR Perspective

Employment, labour law, Medium-sized companies, News, Start-ups / / , , , , , , , , ,

The end of the year is coming up fast and there are plenty tasks to arrange at the HR Departments. Among the others, it should be checked whether the holiday due for this year have been scheduled for all employees until 31 December, as well as, if the holiday agreements have been signed for 2020. Before entry into 2020, we wish to provide you with quick to do list and also to call your attention to the latest news and the expected relevant changes.
I. Unused holiday

The question of unused holiday at the end of the year is always a cardinal issue from HR view. Therefore, it is advisable to check if each employee how the annual leaves of the current year stands. Unused leave cannot be redeemed in cash, unless the employment relationship is terminated. Leave must therefore be scheduled even if the employee does not wish to take it.

The general rule is that leave due for 2019 cannot be transferred to 2020. Therefore, the remaining holiday shall be scheduled basically for the year of 2019. However in some exceptional cases it may be transferred to the next year, as follows:

·        If employment relationship began on or after 1 October 2019, holiday may be scheduled until 31 March 2020.

·        If, due to a cause at the employee’s side, holiday could not be scheduled in 2019 (e.g. illness, maternity leave, work incapacity, etc.), it can be scheduled within sixty days of the cause ceases to exist.

·        Leave which commences in the due year and does not exceed five working days in the following year shall be deemed to have been taken in the due year.

·        The additional leave due to the age of the employee may be scheduled until 31 December 2020, if the parties concluded an agreement on it in 2019.

·        In the event of economic reasons of particular importance or any direct and consequential reason arising in connection with its operations, the employer may allocate one-fourth of the employee’s holiday by 31 March of the following year if it is stipulated so in the collective agreement.

II. The case of extraordinary work (overtime)

Considering that extraordinary work has an annual limit, it is highly advisable to check how the company stands in this regard as we approach the end of the year.

In the case of full-time work, up to 250 hours of overtime per calendar year can be ordered.

Collective agreement allows 300 hours per year. Further, the employer and the employee may conclude an agreement on additional working hours so that it must not exceed 400 hours overtime per calendar years. This agreement may be terminated by the employee by the end of the calendar year.

However, the above mentioned annual limit shall apply proportionately if the employment relationship began during the year, for a fixed period or for part-time work. It is important that if the company exceeds the annual extraordinary working time limit, it may face serious fines as a result of any labour inspections.

III. Minimum wage and guaranteed wage minimum

As of January, the minimum wage will be expectedly increased again. In 2018, a two-year agreement was made at the meeting of the Competitive Sector and Government Permanent Consultation Forum to increase the minimum wage and the guaranteed wage minimum with 8%-8 % in 2019 and 2020. Thus, the minimum wage could rise to HUF 161,000 in 2020 and the guaranteed wage minimum to HUF 210,600.

The minimum wage and guaranteed wage minimum shall be published by a government decree which has not been issued yet, but it will be expectedly published until the end of the year.

After the decree has been published, the salaries shall be reviewed and the employment contracts shall be amended accordingly.

IV. Social contributions in 2020

With changes of social contribution there is nothing to do, however from payroll perspective it is good to know that according to the bill No. T/8021 from 1st July 2020 (i) pension contributions, (ii) in-kind and (iii) financial health insurance contributions, and (iv) labour market contributions will expectedly merge so called “social security contribution”. However, the rate remains the same, so in total 18.5%.

V. Working time schedule for the year of 2020

The minister of finance has the right to reschedule the working and rest days around the public holidays which changes shall apply in case of employees working under a fix, general working time schedule.

According to the decree of the minister of finance in the next year 21 August (Friday) and the 24 December 2020 (Thursday) shall be rest days, and the 29 August and the 12 December (Saturdays) 2020 are qualified as working days.

VI. Retirement age in 2020

According to Act LXXXI of 1997 employees were born in 1956 may be entitled to old-age pension when they reach the age of 64 plus 183 days. Therefore, the above mentioned employees will be eligible for pension in 2020.

It is remained unchanged that the employee’s employment shall not be terminated due to the retirement.

The End of The Year From HR Perspective Read More »

Trusted Working Hours

Employment, labour law, Medium-sized companies, News, Start-ups / / ,

ECJ has decided on the dilemma: setting up a system enabling the duration of time worked each day by each worker to be measured is a must.
The European Court of Justice requires to set up such an objective, reliable and accessible system, which allows to enable the duration of time worked each day by each worker (number of hours worked and hours of overtime worked, also when that work was done) to be measured.

The European Court of Justice gave its judgment on May 14, 2019 in the Federación de Servicios de Comisiones Obreras contra Deutsche Bank SAE case No. C-55/18 conducted on the basis of the reference for a preliminary ruling of the Spanish National High Court (Audiencia Nacional). According to this, solely the practice of setting up a system enabling the duration of time worked each day by each worker to be measured is compatible with the laws of the EU.

In the view of the European Court of Justice, the above obligation is reasoned by two key circumstances.
With regard to, that employment relationships are asymmetric by nature, where employees are considered as „weaker parties”, registration is necessary particularly due to the fundamental right to the limitation of maximum working hours and to daily and weekly rest periods, which may be derived from the safety and health protection of workers. As, in the absence of sufficient database, there would be no effective evidence available for employees in case of an incidental infringement of their rights.
In consequence thereof, authorities and courts facilitate the supervision regarding the enforcement of the above rights in the course of which only controlling these records provides an acceptable solution.

Therefore, the obligation extends to the set up of such an objective, reliable and accessible system, which allows to enable the duration of time worked each day by each worker to be measured, especially to recall the number of hours worked and when that work was done, also the number of hours of overtime worked unchanged, moreover, which is also in compliance with the special provisions regarding the form of registration, attributes of each sector of activity concerned, or the specific characteristics of certain undertakings set forth by the member states, if any (see: transport sector).

Although, several constructions of performance of work – especially of flexible working hours – have been developed by the international practice lately, which often lack clear expectations related to the methods of measuring duration of time worked, Act I of 2012 on Labor Code (“Labor Code”) disposes rather unambiguous thereof in Hungary, which is also in consonance with principles of the laws of the EU.

As a general rule, employers register the durations of regular working time and overtime, stand-by duty, periods of leave and the duration of overtime undertaken voluntarily according to Section 134(1) of the Labor Code, while the above obligation includes registration of the latter two elements of this list in respect of adoption of trusted working hours pursuant to Section 96(2).

In this context, we kindly draw the attention of our honorable Client to that it is expressly recommended to supervise the definition of the adopted working arrangements and the sufficient recordkeeping related to the above with regard to the timeliness of this issue.

Trusted Working Hours Read More »

GDPR „OMNIBUS” Act overwrites the usual HR process

Company groups, Data protection, Employment, labour law, Medium-sized companies, News, Start-ups / / , , , ,

On 26 April 2019, Hungary’s new ‘Omnibus Act’ implementing provisions of the GDPR took effect. This article examines its significant impact on employers and the continuing uncertainty surrounding some of the changes it introduces.

Only a few months ago, employers were required to readjust their processes in preparation for GDPR implementation and now the new so-called ‘Omnibus’ act that amends the Labour Code, among other changes has entered into force (on 26 April 2019). The new regulation requires immediate and very significant work from HR departments, while there are several open issues to be jointly interpreted by labour lawyers together with HR and data protection professionals on how to ensure their daily practice is compliant with the new but ambiguous regulations.

The bottleneck is a result of the fact that Hungarian lawmakers were well behind schedule with implementation of GDPR, leaving employers only a few days to review the new processes, since all employers must comply with all requirements from day one. There is a strong hope that (as has happened in several previous cases) the Omnibus Act will very shortly be corrected by a new amendment.

The GDPR ‘Omnibus’ Act amends 86 acts including the Labour Code in order to comply with GDPR regulations.

This amendment requires the review of labour contracts, HR processes and significant HR policies such as recruitment, selection, new employees’ induction process, operations, the data management of access control systems and use of employer’s devices, just to mention the most common areas concerned.

Employers and all organisations should have complied with the new regulations within a couple of days of entry into force.

Although the new requirements contain more details than the published draft bill, there are still several open issues on how to implement them in practice. For example what is the meaning of, and what are the criteria for the necessity and proportionality test contained in the new regulations in relation to limitations on employees’ personal human rights (in connection with e-mail, internet, device or video surveillance, etc.)? The GDPR only includes the privacy impact assessment and the ‘balancing test’ for ‘legitimate interest’.

The usual process of recording a new employee’s data is basically overridden by the new rule that the employer may only request presentation of an ID card and other personal documents, but no copies can be made, even with the consent of the employee. This will mean that proper identification of the employee would be difficult. The provision of false data by the employee may result in annulment of employment, but with a lack of proper evidence and documentation, the employer may not be in a position to act.

Handling of criminal data records is more strictly regulated, and in the future the basic rule is that no criminal record clearance may be requested from employees. Exceptional and very strict criteria are set for cases when the employer may require an employee to present criminal record clearance, but the precise criteria can be decided by the employer if a serious business risk for the organisation would arise from an employee with undisclosed criminal record working for it.

Finally, the amendment relating to data managed by the biometric access control systems (digital fingerprint, iris/retina scanning, face identification systems), and also the use of the employers’ devices is based on new principles, meaning that a review of internal policies relating to these issues must be conducted.

GDPR „OMNIBUS” Act overwrites the usual HR process Read More »

Reinterpreted Restrictive Covenant!

Employment, labour law, Medium-sized companies, News, Start-ups / / , , ,

The supreme court has confirmed that it is not possible to incorporate the consideration for non-compete into the monthly wages even in the labour contract with the executive employees. The common practice is that the employees are required to notify the employer on the data of their a new employer.

Now according to the decision of the supreme court, breach of the notification undertaking shall not be penalised, only breach of the restrictive covenant. This surprising decision would significantly reduce the employers ability to check the fulfilment of this undertaking, because they do not become aware or only by accident if their former employee works for their competitor if there is no sanction for non-reporting. The labour code but it is a contract governed by the Civil Code which basically based on the principle of the parties’ freedom to freely determine their agreement in the absence of expressly prohibited provision, and the Civil Code does not prohibit the imposition of a penalty for breaching of notification obligation. It seems that the courts leave less room for the Hungarian employers in their civil law

Reinterpreted Restrictive Covenant! Read More »

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