Expected modifications to the Labor Code from 1 January 2023

Bill No. T/1845 on the amendment of employment-related laws, submitted on 2 November 2022, intends to amend – among several other laws – the Labor Code (hereinafter: “Labor Code”) with effect from 1 January 2023 as a general rule. The amendments are mainly intended to comply with EU law and harmonisation obligations1.

The proposed changes are summarised below.

(1) In the case of an employment claim based on a breach of the prohibition of abuse of rights, the claimant shall prove the fact, circumstance, and the harm on which the breach of the prohibition is based, while the person exercising the right shall prove that there is no causal link between the aforementioned fact or circumstance and the harm.

(2) The bill incorporates into the Labor Code the existing legal practice on the communication of termination without notice. The 15-day period for exercising termination without notice is deemed to have been observed if it is posted before the expiry of the period.

Furthermore, an additional rule will apply to legal statements: the statement may be validly made if it is posted on the last day of the deadline.

(3) In the event of change of the employer’s entity, the current deadline of 15 days from the date of the transfer for the employer to provide written information will be changed to the date of the transfer.

(4) The employer’s obligation to provide information will be extended, and the deadline thereof will be 7 days instead of 15 days.

The new information must include, for example, the identification of the place of work, the duration of the daily working time, the days of the week on which working time may be allocated, the possible starting and finishing times of the scheduled daily working time, the possible duration of overtime work, the specific nature of the employer’s activities and the employer’s training policy, the length of time the employee is entitled to receive training, the name of the authority to which the employer will pay the employment-related taxes, etc.

Information to be provided when working abroad will be also supplemented.

(5) Unless the parties stipulate a different date in the employment contract, the employment relationship shall start on the day following the conclusion of the contract.

(6) The current legislation provides for the reimbursement by the employer of “justified” expenses incurred in connection with the performance of the employment relationship. The amendment already provides for the obligation to reimburse “necessary” costs. Although the phrase ‘necessary’ is not explained, the explanatory memorandum to the bill states that employers must provide employees free of charge with all the training necessary for the performance of their duties, as required by EU or national legislation or collective agreements.

(7) The amendment supplements the cases of exemption from work duty and from the requirement of availability. By the adoption of the court practice, it will also become an exemption if the employee is not unfit for work but is otherwise unable to perform his/her job due to health reasons.

The employee will also be exempted from work, for a maximum of 5 working days per year, for the purpose of providing personal care to a relative who needs care for serious health reasons or to a person living in the same household as the employee.

(8) According to the bill, the employee may, except during the first 6 months of the employment relationship, request a transfer to full-time or part-time employment, employment by means of teleworking or a transfer to a position for an indefinite period, if the employer informs him/her that such employment is available.

The employee with a child below the age of eight and the employee providing care – except for the first 6 months of the employment relationship – may request a change of the place of work and the work order, and shall request a change to employment by means of teleworking or part-time work.

The employee must provide reasons for his/her request in writing and indicate the date of the change.

The employer must give a written statement to the employee’s request within fifteen days. If the employer refuses the request, it must provide reasons.

In the event of an unlawful refusal of the request or failure to give a statement, the court shall substitute the employer’s statement of consent.

(9) The employer will also have an obligation to provide reasons during the probationary period and for pensioner and executive employees in regard to certain protected groups.

Even in the absence of an obligation to provide reasons, the employer shall – at the employee’s request – provide reasons for its legal statement made for the termination of an employment relationship, if the employee claims that the termination of the employment relationship was due to the employee’s use of caretaker’s working time reduction, paternity leave, parental leave, leave without pay for caring for a child, request for flexible working conditions or proposition for the amendment of the employment contract.

The employee may request in writing the reasons for the employer’s statement within 15 days of delivery of the statement. The employer shall provide the reasons in writing within 15 days of the receipt of the request.

(10) Cases of judicial reinstatement of the employment relationship are extended. In particular, the employment relationship can also be reinstated if the termination of the employment relationship was contrary to the prohibition of abuse of rights.

(11) When a working time banking is announced, not only its beginning and end, but the duration of the working time to be performed shall also be published.

(12) For the purposes of the entitlement to leave, the duration of the paternity leave and parental leave as well as the carer’s working time reduction shall be recognized as time spent at work. The exemption of the employee from the requirement of availability and from work duty for investigating the circumstances of an employee’s breach of obligations for the period required for the investigation, in any case for up to thirty days, shall also be recognized as time spent at work.

(13) Paternity leave will be longer, and there will be a so-called parental leave.

Upon the birth of his child a father shall be entitled to not 5, but 10 working days of paternity leave. However, the employee is entitled to absentee pay for 5 working days of the paternity leave and only to 40% of the absentee pay from the 6th working day of the paternity leave.

An employee is entitled to 44 working days of parental leave until his/her child reaches the age of three, provided that he or she is employed for at least one year prior to the birth of the child. During parental leave, the employee is entitled to only 10% of the absentee pay, which shall be reduced by the amount of the child-care benefits under Act LXXXIII of 1997 on the Services of the Compulsory Health Insurance System and the childcare assistance benefit under Act LXXXIV of 1998 on Family Support, paid to the employee for this period.

In this context, the bill adds paternity leave, parental leave, and carer’s working time reduction to the cases of the prohibitions on termination by notice.

In addition, an employer’s certificate must also be given on termination of employment regarding the duration of paternity or parental leave taken.

The bill does not allow derogations from the provisions on carer’s working time reduction, paternity leave and parental leave in case of executive employees either.

(14)  The amendment clarifies that the general rules of liability shall apply to the liability of employees for damage arising from the physical damage of property taken into safeguarding: in the case of wilful or grossly negligent damage, the liability is full, while in other cases the limit is 4 months’ absentee pay.

(15) The rules on probationary periods are modified for fixed-term employment relationships:

For fixed-term employment contracts of up to 1 year, only a pro rata probationary period may be imposed.

A probationary period may not be imposed for a new employment relationship established within 6 months if the new employment relationship is established by the parties for the same or similar job function.

(16) Employment in a stand-by job is not allowed under the simplified employment relationship.

(17) The amendment extends the scope of public employers to include budgetary organs employing employees and employers maintained by public-benefit trusts.

Furthermore, in the case of a move between public employers, the employee will not lose the “service time” acquired with the previous – also public – employer in respect of the period of entitlement to notice period and severance pay.

(18) Certain definitions are clarified, e.g., a child who is alternately fostered and cared for in the context of a so-called “alternating care” will also be included in the definition of child.

1 Thus, the following will be transposed or even more harmonised:

  • Directive 2019/1152 on transparent and predictable working conditions in the European Union,
  • Directive 2019/1158 on work-life balance for parents and carers,
  • Regulation 2016/425 on personal protective equipment,
  • Directive 2022/431 on the protection of workers from the risks related to exposure to carcinogens or mutagens at work,
  • Directive 96/71/EC concerning the posting of workers in the framework of the provision of services,
  • General Data Protection Regulation (GDPR), Directive 2018/957 concerning the posting of workers in the framework of the provision of services.

Written by Szilvia Fehérvári