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Worker’s Unions, Opposition Fear Latest Bill Amending Labor Code to Become ‘Slave Law 2.0’

Péter Cseresnyés 2020.06.10.

A new revision to Hungary’s Labor Code would allow employers to set the maximum duration of cumulative working time (or working time banking) for a 24 month period. The government says the change is needed to prevent mass layoffs in certain sectors affected by the Covid-19 epidemic. But many fear the new regulation would exploit the employees. The political opposition has already named the amendment ‘slave law 2.0’, while five trade unions, in an open letter, called on MPs not to vote for the planned regulation.

At the end of May, the Orbán government submitted an omnibus bill which aims to maintain some of the regulations made during the soon ending state-of-emergency.

The 246-page long proposal also contains an amendment of the Labor Code that would allow employers – under ministerial permit – to set the maximum duration of the “working time banking” for 24 months instead of the current 4 months for “job creating” investments that are considered of “national economic interest.”

In other words, from now on employers could apply up to 24 months of working hours unilaterally, without a collective agreement or green-light from the trade unions.

The terms of these investments are to be decided by the minister responsible for employment policy, (i.e. the Innovation and Technology Minister), who gives individual permissions to the beneficiary companies.

The new regulation clearly seeks to help the mostly German and Austrian players of the Hungarian automotive industry, a sector considered a critical engine of industrial production in Hungary.

Many car manufacturers in the country announced in March that due to the spread of the coronavirus, decreased sales, and uncertainty in car parts supplies, production will be temporarily suspended.

Automotive Industry in Hungary Restarts Production Gradually, Effects May Still Remain

Audi in Győr, Opel in Szentgotthárd, Mercedes in Kecskemét, and Suzuki in Komárom all made the decision.

According to the Orbán government, by giving the option of creating a flexible work schedule, companies will be less likely to compensate for their loss of income through mass layoffs.  With that, workers won’t become unemployed and won’t have to suffer a possible wage reduction should their working hours be reduced for the time of the production suspension.

But critics of the regulation have concerns over the planned changes. They say the ministerial permit would give virtually unlimited power to the affected employers to modify employees’ working hours and their days of annual leave.

Unions Outraged as Government Makes Working Timeframe More Flexible for Companies

This could lead to employees working for 12 hours a day with only one day of rest for an extended period of time.

Opposition MP calls the regulation ‘slave law 2.0’

Referring to the much-debated overtime law that came into effect in 2018, commonly called the ‘slave law’ independent MP Bernadett Szél called the new bill the ‘slave law 2.0’. Szél believes the bill could force employees of the affected companies to work non-stop for weeks, to have unpaid overtime hours, and be under obligation to repay the work hours if their labor contract is terminated before the end of the designated time-frame.

Unions fear amendment could lead to excessive vulnerability of employees

Five national trade unions jointly protested against the proposal as well, in an open letter. They believe the amendment puts workers in a vulnerable position, and asked all MPs to support the bill only if the controversial section is removed.

Demonstration against Overtime Bill: “Slave Law will Tear Millions of Families apart”

The Hungarian Trade Union Confederation (MASZSZ), the Intellectual Trade Union Confederation (ÉSZT), the Democratic League of Independent Trade Unions (LIGA), the National Federation of Workers’ Councils (MOSZ), and the Forum for the Cooperation of Trade Unions (SZEF) listed the problems with the regulation.

In their view, the draft was submitted without any consultation. Furthermore, the 24-month time-frame contradicts the directives of the European Parliament and the Council, which only allows for a one-year time-frame solely in case of a collective agreement or an individual agreement between the employee and the employer.

In addition, the bargaining power of trade unions is weakening, as the government gives individual rights to investors without consulting them. Moreover, it is not clear what job-creating investments fall under ‘national economic interest.’

The overtime law, passed in December 2018, has already weakened the position of workers by raising annual overtime working hours from 250 to 400 hours in the case of an individual agreement, and allowing a 36-month working time limit in the case of a collective agreement. But in the latter case, the unions still had the power to have a say in the matter, whereas the new proposal makes even this consultation unnecessary.

Featured photo by Csaba Krizsán/MTI