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Labor Code amendments passed

Parliament on Monday passed a set of laws that modifies the Labor Code in several areas. Among the changes are the issues of weekly working hours, probation and holiday leave.

While the fully modified Labor Code is yet to be presented to the public, Parliament has already passed amendments that will likely to have a notable impact on Hungary’s labor market.

A rule on extending weekly working hours – which was initially proposed as a temporary measure in effect until the end of the year – was made permanent. This allows employers greater leeway in planning working hours. Under the new law, hours from less busy work periods can be regrouped to busier periods, and the working week will be capped at 44 hours instead of the current 40, with no increase in pay. However, this reorganization can only last for one year, and employees will receive triple wages once the one-year period expires.

The rules on paying for extra working hours will also change. Employers can now chose to compensate overtime with days off, but such holidays cannot be shorter than the period of extra working hours.

From now on, holidays can be granted in more than two installments only at the request of the employee. In exceptional cases, employers will be able to give out holidays in more than two installments, but employees will still have the right for at least a 14-day uninterrupted holiday each year.

The time of probation can be extended to six months, but only if it is included in the company’s collective agreement.

Another amendment maximizes the period during which one can receive unemployment allowance at 90 days, reducing it from the current 180. The amendment overruled a proposal made by interior minister Sándor Pintér as part of the public employment bill that would have lowered the maximum period of jobseeker benefits to 180 days, while lowering the cap on the amount of the benefits to the minimum wage, from 120% of the minimum wage.

Eligibility will require at least 360 days of work in the preceding five years, instead of the preceding four years, as in the current legislation.

Hungary's updated Convergence Program, submitted to Brussels in April, projected annual savings of almost HUF 43 billion in both 2012 and 2013 from reducing the unemployment allowance period to 90 days. When the interior minister submitted the bill proposing the smaller cut, the National Economy Ministry said that the proposed amendment would "fully comply" with the expected savings in the country's structural reform plan, MTI wrote.

Also on Monday, Parliament voted on disbanding the National Reconciliation Council (OÉT) and replacing it with the National Economic and Social Council (NGTT). Several bodies that were not members of the OÉT will be included in the new organization, such as civil organizations, churches, and economic chambers. The government, however, will not be directly involved in the NGTT.