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The right of exit and of entry following Brexit

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

The United Kingdom is set to leave the European Union on 31 January 2020. As the date draws ever so close, it is time to get acquainted with the rules to follow the departure of the country, most importantly the right of exit and of entry of union citizens.
Presently, union citizens can enter the UK with both their national identity cards or their passports and they do not need a visa to do so. Although 31 January 2020 is the day the UK shall officially leave the EU, it will be followed by a transition period, in which the rules of entry and exit shall remain unchanged.

According to the agreement between the UK and the EU, this transition period ends on 31 December 2020. The Joint Committee (comprising representatives of the EU and UK) may extend this transition period one time with an additional 1 or 2 years. As a result, the current system could hold out as late as 2022, but for now 31 December 2020 shall be deemed the relevant date.

Come 1 January 2021, – assuming no extension takes place – it will be entirely up to the British Parliament to determine the conditions of entry and exit into the country, specifically whether or not a passport and/ or visa is required.

The right of exit and of entry following Brexit 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 »

Establishment of separate administrative court system will be postponed indefinitely for an indefinite period of time

News /

A controversial proposal to establish a separate administrative court system in Hungary, which would also have merged the labour courts with the regional courts, is now on hold indefinitely.
As highlighted previously in The Word, at the end of 2018 the Hungarian Parliament passed an act (Act CXXX of 2018, the ‘Act’) on the establishment of a new administrative court system. The concept was that it would operate under the direction of a newly established Supreme Administrative Court and under the operative leadership of the Ministry of Justice. At the same time, the labour court would be merged into the general regional courts.
In the last six months there has been huge international debate surrounding the Act, during which the Hungarian government was severely criticised for jeopardising the values of the European Union, such as the concept of the constitutional state and the independence of judges.

As a result, on 30 May 2019 the Hungarian government submitted a bill to the Parliament on postponing the establishment of the administrative court system. According to the official justification for the bill the government wishes to bring an end to the groundless debates around the Act and related criticism regarding the constitutional state.

As a result, the separate administrative court system will be not established by 1 January 2020 and this plan will be postponed for an indefinite period of time. The administrative and labour courts will also continue to work unaltered as a separate court, that is, the labour court will be not merged into the general regional courts.

Establishment of separate administrative court system will be postponed indefinitely for an indefinite period of time 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 »

Amendments with regard to the GDPR has been published

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

The amendments with regards to the GDPR, which was adopted by the Hungarian Parliament on the 1st of April, was officially published today.

In order to harmonize with the GDPR, the amendments modifies over 80 sectorial law, including provisions of the Labour Code.

The majority of the amendments will come into effect at the end of April, but the modifications regarding the national accreditation and the protection of inventions by patents will come into force in May.

Amendments with regard to the GDPR has been published Read More »

Legislative changes on the bill related to GDPR

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

It became necessary with the entry into force and application of the GDPR, amend the domestic sectoral laws, which proposals are expected to be adopted by the Parliament this week. The draft also affects the provisions of the Labour Code.

Provisions related to workplace data management are defined under a new title Data Process after the section of protection of privacy rights. According to this, in addition to the employer, the works council and the trade union may also request employees to make a statement or to disclose any information for exercising their rights or fulfilling their obligations as defined in the Labour Code. In regard to the provisions above, they may also request to present them a document, thus, storing and copying them cannot be necessary for the above reasons, it is sufficient to present them and record the necessary data.

Based on the draft, the processing of biometric identifiers has been further regulated, that the employee’s biometric data can be processed for the purpose of identifying the data subject if it is necessary to prevent unauthorized access to a thing or data which would endanger the life, bodily integrity or health of the employee or others, or the serious or massive irreversible harm of a significant interest protected by law.

Regarding monitoring of the workplace, it has been recorded in the draft, surprising many people that the employee may only use the computing device provided by the employer for the purpose of performing the employment relationship. The parties may differ from this rule by mutual agreement, however, by default, these devices cannot be used by the employee for private purposes at all. Although the draft provides that the employer may only monitor employment-related data when monitoring, it also qualifies, for the purposes of the above entitlement, the data necessary to verify compliance with the private use restriction.

The provisions of the above draft have not yet been adopted, so we will inform you about its subsequent adoption or possible modifications later on.

Legislative changes on the bill related to GDPR Read More »

Legislative changes in Hungary anticipating a possible ‘No Deal’ Brexit

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

The proposal affects the right of residence, employment and entitlement to social security and unemployment benefits for British citizens in Hungary.

The Hungarian government has drafted a bill on 26 February 2019 titled “Amendments to certain laws in the event of the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union in a disorderly manner” under number T/4821. According to the explanatory memorandum to the bill, the likelihood of a disorderly exit has increased significantly, which means that on the midnight of 29 March 2019 the United Kingdom of Great Britain and Northern Ireland would become identical to third-countries. The amendments to the law contained in the bill would enter into force in Hungary at the time and in the event of a no deal Brexit.

As regards residence and employment, the essence of the bill is that British citizens can continue to hold the same status as an EU citizen for 3 years after leaving which means, they can legally reside and work in Hungary after leaving the EU in case their status is in order, i.e. they have a Registration Certificate for EEA Nationals or a Permanent Residence Card prior to the date of the exit. After leaving and staying for at least 3 years in Hungary, they can apply for a National Permanent Residence Permit without examining the terms and conditions applicable to housing, subsistence, health insurance and Hungary’s interest. After 5 years of uninterrupted stay in Hungary, British citizens may apply for EC residence permit as well. In the latter case, however, the examination of the residence conditions, unlike national residence permit, cannot be waived.

As it follows from the rules above, British citizens arriving in Hungary after Brexit will be entitled to reside and work under the rules applicable to third-country nationals.

The main principle for the various social security benefits is that the benefits determined before the UK’s exit remain the same.
In terms of pension rights, the periods of insurance completed both prior and past to Brexit are recognized and offset, as proposed in the bill.

Legislative changes in Hungary anticipating a possible ‘No Deal’ Brexit Read More »

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