Brief Description of Employees’ and Employers’ Associations
Despite Hungary having ratified all major ILO Conventions on freedom of association and the right to collective bargaining, trade union density remains low, with fewer than 10% of employees unionised and collective bargaining coverage at approximately 20%. Trade unions operate as associations, and their rights and obligations vary depending on their organisational representation within the employer’s workforce.
Industrial sectors primarily organise employers’ associations; however, the Labour Code does not regulate their operations. Collective bargaining predominantly occurs at the enterprise level, although separate legislation governs sectoral-level social dialogue. One employer can conclude only one collective agreement at the enterprise level; thus, trade unions must cooperate. 66y
Rights and Importance of Trade Unions
The Hungarian Labour Code does not assign a significant role to trade unions. Trade unions that, according to their statutes, have an official representative at the employer are entitled to the rights outlined in the Labour Code. These rights include representing their members’ interests, informing employees about union activities, accessing the workplace, using facilities provided by the employer for their operations, requesting information, expressing opinions on employer decisions, and initiating consultations. Consultations have a seven-day suspensive effect on the implementation of employer decisions. Trade union officials are entitled to monthly working time reductions proportional to the number of union members. The allowance is one hour per month for every two members. However, the collective agreement can only be concluded if a trade union present at the employer organises at least 10% of the employees.
Types of Representation
Union members cannot face discrimination based on membership, but only elected union officials receive legal protection from employer actions such as termination or transfer. This protection requires prior approval from the union’s superior body and applies only to a limited number of officials based on workforce size, ranging from one for employers with up to 500 employees to a maximum of five for those with over 4,000 employees.
Tasks and Obligations of Representatives
The tasks and obligations of union representatives depend on the trade union’s statutes and, where applicable, the collective agreement.
Employees' Representation in Management
Employees are entitled to monitor company operations if the number of full-time employees exceeds 200. According to the rules of the Civil Code (Act V of 2013), in such cases, one-third of the supervisory board members must be employee representatives. The works council nominates these representatives from among the employees after consulting the trade union’s opinion. Their task is to oversee the management’s activities.
Other Types of Employee Representative Bodies
The Hungarian Labour Code assigns a more significant role to works councils in employee representation than trade union representation. The Labour Code mandates the election of workers’ representatives in companies with more than 15 employees and establishing a works council in companies with more than 50 employees. It is important to note that forming a works council is not an obligation of the employer but rather an opportunity for the employees. The employer must cooperate with the works council, inform employees about their right to elect one and facilitate the election process.
Rights of the works council/workers’ representatives:
- Co-decision rights: The works council has co-decision authority regarding managing welfare funds (if any exist).
- Consultation rights: The employer must consult the works council on decisions, plans, or regulations impacting many employees.
- Information rights: The works council supervises compliance with employment regulations. It can request information and initiate negotiations regarding compliance, provided it specifies the reasons for its request, which the employer may not refuse. Furthermore, every six months, the employer must inform the works council about key issues affecting the company’s economic situation, changes in wages, liquidity related to salary payments, employment characteristics, working time utilisation, working conditions, the number of employees, and a description of the jobs performed.
The works council also has the right to information in cases of employer succession and the right to consultation during collective redundancies.
Under the Occupational Safety and Health Act, employees can elect a health and safety representative to protect their rights and interests regarding safe and healthy working conditions. Electing such a representative is mandatory in companies employing at least 20 employees. Health and safety representatives can escalate issues to the labour safety authority and have special rights during official proceedings. They enjoy the same protections, working time reductions, and safeguards as trade union officials.
