„SLAVE LAW” OR WIDER PRIVATE AUTONOMY?

09 January 2019

The new law modification in Hungary widely known as „slave law” has become a big issue recently. What will be the yearly overtime limit? 250 hours? 300 hours? 400 hours? Is it possible from now on to organize working weeks with 6 days? We would like to clarify the frequently heard urban legends, so that you can prepare your company to the new regulation.

Things that haven’t changed: 250 hours

In relation with the modification the most emphasised news is that the maximum amount of the overtime became 400 hours. However, this information should be defined better. The overtime that you can expect from your employee in certain emergency cases one-sidedly based on the law remained maximum 250 hours per year, so this hasn’t changed.

With separate agreement + 150 hours

The modification allows, however, that if you conclude an individual agreement with you employee, this yearly 250 hour period can be increased with 150 hours. This is called “voluntary overtime” according to the law. If you apply a collective agreement, then the yearly 300 hours’ limit can’t be increased with 150 hours, the maximum amount of the voluntary overtime can be 100 hours per year. This way you can see how the famous number of 400 hours are calculated, including a part that can be stipulated only in a two-sided agreement, because it is not provided by the law automatically. This also means that the employee’s consent is required, a one-sided instruction is not enough.

Of course you can decide not to sign such an agreement, then the yearly 250 hours’ limit shall be applied without any change. Also, if you decide you would like to take this opportunity, you can increase the limit within the 150 hours’ frame as it suits you the best. It is not necessary to use the maximum provided 150 hours. In this issue the determinating factors will be the operation and management of your company, your labour needs, and also the employee’s working capacity and work schedules (for example in case of standard work pattern it is still obligatory to provide two rest days per week).

It is also important to mention that it is not a must to use up all the voluntary overtime if you sign such an agreement. If you don’t need overtime, you don’t have to request it. You also have to consider its financial implications, because in case of overtime you must pay wage supplement to your employee beyond the normal salary.

Termination limitations

The voluntary overtime agreement is separated from the employment agreement, so it can be terminated without affecting the employment relationship. Besides terminating the voluntary overtime agreement with mutual consent, the law provides the employee the opportunity to terminate the agreement one-sidedly by the end of the year. It is important that if this happens, you cannot fire the employee based on the termination of the agreement.

In addition, it might be evident, but it is worth to mention that in case the employee disagrees to sign a voluntary overtime agreement, this can’t be a reason to terminate his employment relationship as well.

Overtime recording obligation

There is another new regulation related to this topic, that in case you sign an agreement about voluntary overtime, you have to keep records about such agreements and the actually performed voluntary overtime as well.

Increasing the frame of work time banking by collective agreement

Besides overtime the modification includes other regulations as well, for example provisions for increased frame of work time banking. It is important to make difference between the two expressions, because even though they sound similar, and they appear in the same act, we should distinguish them as they refer to different things.

The main point of work time banking is that the work schedule should be prepared in advance for a fix period, and the working hours should be allocated considering the whole amount of working hours falling in this period in a flexible way, so that it can be sometimes more, sometimes less.

The work time banking frame is basically 4 months or 16 weeks. This can be stretched out to 6 months or 26 weeks in certain cases, such as shift work or stand-by jobs. This didn’t change according to the modification.

However, if your company applies collective agreement, you can experience a radical change, because the previous 12 months’ frame was increased to 36 months, if justified by technical reasons or reasons related to work organization.

For this it is necessary to renegotiate the collective agreement with the trade union or trade unions in question, who might set up appropriate compensation for increasing the frame of work time banking.

Summary

We can see that the modification increases the private autonomy of the parties in the field of organizing working hours by relaxing the previous obligatory rules. Thus by concluding such agreement the employee can work more – in exchange of appropriate remuneration – and renegotiating the collective agreements with the trade union makes it possible to organize the working hours of the employee in a more flexible way.

As both agreements are based on the consent of the parties, and the bargaining power of the employees are not weak in most industrial sectors nowadays, the term “slave law” can be considered rather an exaggeration.

It is worth to measure think it over what is worth to apply among the above mentioned, as both possibilities have also financial impacts.