Changes in the Hungarian Labour Code as of 1 January 2023

At a glance

• As of 1 January 2023, the Hungarian Labour Code has been amended to implement the EU Directive on Transparent and Predictable working Conditions and the EU Directive on Work-life Balance for Parents and Carers, repealing the Council Directive 2010/18/EU.
• Below are the most relevant changes introduced.

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Key changes under the amendments

Content of the employer's  mandatory notice of information

The employer must provide employees with information on the applicable working conditions. Such additional information must include the:

• Place of work;
• Start date and duration of the employment;
• Terms relating to termination of the employment;
• Days on which working time may be scheduled, possible start and end of daily work time and possible duration of overtime;
• Training policy of the employer and the time which may be spent for training;
• Name of the authority to which the employer pays public duties for the employment.

The deadline for providing the written information on the relevant working conditions has been reduced to 7 days. In the case of existing employment, the employee must be informed on the day the change in the working condition takes effect.

No separate written information needs to be provided on working conditions which are included in the parties’ written agreement (typically in the contract of employment).

Some information (e.g. on the working time schedule, the terms relating to termination of the employment) may be provided by indicating the relevant sections of the Labour Code.

In the case of an existing employment, the employee may request for the provision of additional information within three months, even if no changes have occurred. Where an employee makes such request, the employer must provide the additional information within 30 days after receipt of the request.

Contract modification

Employees with children under the age of 8 or with caretaking responsibilities for relatives suffering from serious illnesses may submit a justified request in writing for

• The modification of their place of work;
• The modification of their working time order / pattern;
• Working from home; and / or
• Part-time employment.

The employer has 15 days to respond to such request in writing and, if it intends to refuse the request, it must provide reasoning. In the event of an unlawful refusal or a failure to respond, the court may replace the employer's statement of consent.

Special forms of leave of absence

New forms of leave of absence have been introduced to the Labour Code. These new forms of leave do not affect existing leaves. E.g. the new parental leave does not substitute or replace the existing additional holiday entitlement of parents raising a child under the age of 16.

Paternity leave entitles fathers to 10 working days of leave in the event of the birth or adoption of a child. Fathers may request paternity leave until the end of the second month following the birth or adoption of the child.

Parental leave applies to both parents. Parents are entitled to a total of 44 days of parental leave until the child reaches the age of 3, provided that their employment has been existing for at least one year.

Special rules apply for both the paternity leave and the parental leave as follows:

• Reduced compensation applies. Fathers are entitled 100% absence pay for the first 5 days of paternity leave only. A reduced compensation of 40% is due for the remaining 5 days. The new form of parental leave is compensated by a reduced absence pay of only 10%, under an obligation to set-off childbirth related social security benefits received by the employee during the parental leave.
• The entitlement can be deferred; and
• Upon termination of the employment, the employer is not obliged to pay compensation for unused leave days.

Caretakers' leave applies to employees who personally take care of a relative who is seriously ill. The existence of a serious medical reason must be certified by the doctor responsible for the treatment of the relative. Caretakers are exempted from the obligation to work for a maximum of 5 working days per year. This form of leave of absence is unpaid.

Termination of the employment

Upon the employees’ request, the employer must provide reasoning for the notice of termination even without a general justification obligation (e.g. in case of termination during probationary period, termination of the employment of leading employees or retired employees etc.), if the employee claims that the termination was unfair and took place due to

• Taking maternity leave;
• Taking paternity leave;
• Taking parental leave;
• The employee’s request for the modification of the contract terms (see "contract modification" above); or
• Taking caretaker's leave.

The employer must provide written reasoning within 15 days of the request.

Termination protection

Protection against termination is extended and the employer must not terminate the employment by notice of termination during

• Paternity leave;
• Parental leave; and / or
• Caretakers' leave.

Summary

To summarise the effect of the amendments described above

• The changes being implemented should not require a formal contract modification, since changing provisions are usually not included in the employment agreements;
• Employer’s mandatory notification on applicable working conditions to be provided to new hirings must be updated accordingly;
• Existing employees may also request for an updated written notification on the working conditions;
• The practice of holiday allocation must be re-considered with respect to the new forms of leave of absence (recording, principals of approval, refusal, templates, etc.).