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Workplace Representation

Workplace representation in Hungary is provided by both local trade unions and elected works councils with the balance between the two varying over time. Under the revised Labour Code, introduced in 2012, unions retained negotiating rights but lost their monitoring powers and their right to be informed and consulted. Works councils have information and consultation rights but in practice often find it difficult to influence company decisions.

Works councils, drawing heavily on the experience in Germany, were first introduced in 1992. However, they had fewer powers than in Germany – joint decision making (codetermination) was limited to the use of company social funds. In addition, to take account of the existing Hungarian situation, local workplace unions were left with some rights in the area of information and consultation. The powers of both local unions and works councils have fluctuated with the changing political complexion of governments since 1998, with left-wing governments favouring the unions and right-wing governments giving greater rights to works councils. The revised Labour Code, introduced by the FIDESZ-led government in 2012, removed rights from the unions, although in some areas the position of the works councils was also weakened.

 

In practice there must be some doubt as to whether the difference has been as great is it appears. A survey published by a Hungarian researcher Béla Benyó in 2003 found that representation through works councils went hand in hand with a union presence. Only 9% of works councils were at workplaces without a union and 70% of works councils were either entirely made up of trade unionists or overwhelmingly made up of them.[1] In evaluating these figures it is important to bear in mind the fact that until 2012 Hungarian legislation based union recognition for bargaining on the results of works council elections.

 

Figures from the 2015 labour force survey show that a union presence at work was more widespread than the existence of a works council. One in four respondents (25.1%) said that there was a union at their workplace, compared with just over one in six (17.9%) who said there was a works council or a works representative.[2]  

 

Figures from Eurofound’s 2013 European Company Survey show that 16% of establishments in Hungary with at least 10 employees have some form of official employee representation. This may be either through the union or through the works council. The Hungarian figure is precisely half the EU28 average of 32%. As elsewhere in Europe, larger organisations are much more likely to have such a structure than smaller ones. The survey shows 81% of establishments with more than 250 employees having representation, and 45% of those with between 50 and 249 employees. However in smaller workplaces in Hungary, those with between 10 and 49 employees, only 11% have employee representation.[3]

Numbers and structure

 

The structure of the workplace trade union body depends on the internal rules of the union. However, the number of union representatives protected against dismissal is now laid down in the Labour Code (see below).

 

Works councils, which are entirely employee bodies, are to be set up in any company or any part of a company operating independently with more than 50 employees. In companies or workplaces with between 15 and 50 employees a works representative is to be elected. Numbers are calculated using the average over the previous six months on a headcount basis, with both full-time and part-time employees counting equally. Agency workers are not included in the total.

 

The number of works council members increases with the size of the workforce as follows:

 

Number employed

Number of members

51-100

3

101-300

5

301-500

7

501-1,000

9

1,001-2,000

11

2,000+

13

 

The legislation does not say how often works councils should meet and most meet relatively infrequently. However, the law says that the employer must provide the works council with information on a range of issues at least twice a year, which means that there should be at least two meetings a year.

 

Tasks and rights

 

The workplace trade union representatives have a range of rights, although the revised Labour Code gave some of their previous rights to the works council. The union continues to have the sole right to negotiate collective agreements covering wages, although works councils have more limited negotiating rights where there are no trade unions present (see section on collective bargaining).

 

Until the changes introduced by the 2012 Labour Code, the union workplace representatives had to be consulted over major issues affecting employment, including job cuts and organisational changes, including the “transfer of undertakings”.  However, under the current rules, union representatives only have a right to request information and express their views. There is no longer an obligation for them to be consulted.

 

The union has the right to represent its members, including before the courts, to protect their interests. However, the local union representative is no longer responsible for monitoring compliance with the provisions of employment regulations as was the case in the past. Under the terms of the revised Labour Code, this responsibility has passed to the works council.

 

The employer must provide the works council with information about the following issues at least twice a year:

  • fundamental issues affecting the employer’s economic position;
  • developments in wage and salary payments, and the impact of these payments on the company’s cash position, the characteristics of the workforce, the use of working time and working conditions; and
  • the number of teleworkers and agency workers and the tasks that they perform.

 

The works council can ask for documents relating to these issues and more generally about concerns relating to the economic and social interests of the employees.

 

The employer must also consult the works council in advance about plans for measures that will have an impact on a large number of employees, in particular:

  • restructuring, outsourcing or privatisation;
  • the introduction of new investment, including new technology;
  • the processing and protection of personal data on employees;
  • the implementation of employee surveillance;
  • health and safety;
  • new methods of work organisation and the setting of performance norms;
  • training and education plans;
  • job assistance subsidies;
  • rehabilitation for disabled workers;
  • working arrangements;
  • pay principles;
  • measures to protect the environment; and
  • measures to support equal treatment and the coordination of work and family life.

 

However, while there is an obligation to consult on these issues and the Labour Code states that consultation should take place “with a view to reaching agreement”, there is no obligation to reach agreement. The provision which stated that action taken by the employer without consultation was invalid and could be taken to court, has been removed in the revised Labour Code. It also shortened the period between the start of consultation and the action being taken from 15 to seven days, although the timescale is different for redundancies and business transfers.

 

In the case of redundancies, the employer is obliged to give notice of the plans at least seven days before starting negotiations and not to take a decision for at least 15 days after the negotiations have started. For business transfers the employer must provide information 15 days before a transfer.

 

In practice, works councils have only a limited opportunity to influence company decisions. Information is often provided only at the meeting, giving the works council little opportunity to respond.

 

The works council has a right to decide jointly with the employer on the use of any social funds. However, the right also to decide jointly on the utilisation of buildings or equipment for social purposes (holidays, canteens etc), was removed in the 2012 Labour Code.

 

The works council must inform employees about its activities at least twice a year.

Election and term of office

 

The choice and term of office of workplace union representatives is an internal issue for the union.

 

The arrangements for the works council elections, on the other hand, are meticulously regulated by the law. Members must be nominated by either 10% of the employees or at least 50 employees, or by the local union organisation at the company. Members are elected in a secret ballot run by an election committee organised by the employees. All employees at the workplace have a right to vote, but only those with six months’ service are entitled to stand as candidates. Employers and those with rights to appoint and dismiss employees may not stand as candidates.

 

The term of office is five years. (It was three years under the previous Labour Code).

 

Protection against dismissal

 

Before a trade union representative can be dismissed or moved the employer must get the approval of the higher trade union body to which the representative is responsible. The situation is similar for the chair of the works council. He or she can only be dismissed or transferred with the consent of the works council. However, the 2012 Labour Code reduced the number of trade union representatives and works council members protected in this way.

 

Whereas in the past all elected trade union officials at the workplace were protected, under the 2012 Labour Code the union must designate specific individuals who will be protected and the number varies with the size of the workforce (see table). It is possible to negotiate improvements in this area (other than in state and local government owned companies – where the limits apply absolutely), but in most cases unions are unlikely to be strong enough to do so. A study published in 2013 suggested that these limits had a substantial impact on the number of trade union representatives at company level, with the numbers falling in one case from 110 to six.[4]

 

Number of employees

Number of union officials protected

Fewer than 500

2

500 to 1,000

3

1,001 to 2,000

4

2,001 to 4,000

5

More than 4,000

6

 

In the case of the works council, protection against dismissal and transfer has also been reduced by the 2012 Labour Code. It formerly applied to the whole works council. It now only applies to the chair.

Time off and other resources

 

Under the 2012 Labour Code the designated union representatives at the workplace are entitled to one hour per month release from normal duties for every two members. (This is a reduction of a quarter, compared with the situation previously, when it was two hours a month for every three members). In the past, the union could be compensated in cash if these hours were not taken up, although only up to a maximum of half of the available time, and this was a significant source of union income. Under the 2012 Labour Code, this possibility has been abolished.

 

The union should also be given access to rooms on the premises for trade union activities.

 

Works council members are to be released from their normal duties for 10% of their monthly working time, with 15% for the chair of the works council. (Chairs in companies employing more than 1,000 are completely released from their normal duties.) The employer should also pay for the necessary costs of the works council on a jointly agreed basis.

 

Training rights

The Labour Code does not provide any specific training rights for either local trade union representatives or works council members.  

Representation at group level

 

A central works council at the headquarters of a company can be set up if there are several works councils covering the same employer. In the past, this only applied if the different works councils were in the same legally registered company. However, under the 2012 Labour Code a corporate-level works council can be set up in a group of companies. The members are designated by the works councils (central works council), or by the central works councils and/or works councils (corporate-level works council).However, these higher-level bodies cannot have more than 15 members.

 

Links between local union representatives depend on the union. 

[1] See Works councils examined by András Tóth, Youcef Ghellab and László Neumann, EIRO, February 2004 http://www.eurofound.europa.eu/eiro/2004/01/feature/hu0401106f.htm 

[2] HCSO, Labour Force Survey 2015. II. quarterly supplementary survey

https://www.ksh.hu/stadat_evkozi_9_1 (Accessed 01.08.2019)

[3] Eurofound (2015), Third European Company Survey – Overview report: Workplace practices – Patterns, performance and well-being, Figures for Table 44

[4] See: Nacsa, Beata – László Neumann: Hungary: The reduction of social democracy and employment. In: Lerais, Frédéric et. al.: Social democracy under the strain of crisis. An essay of international comparison. Paris: Institut de Recherches Économiques et Sociales (IRES). 2013, pp. 94-108. http://www.ires.fr/images/files/DocumentsTravail/Rapport04.2013/Rapport04.2013%20Anglais.pdf

L. Fulton (2021) National Industrial Relations, an update (2019-2021). Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.