The dynamically changing and increasingly complex legal environment in Hungary constantly poses new challenges for employers. Compliance with prevailing legal regulations (in particular, but not limited to, avoiding penalties and ensuring lawful labour relationships) is an employer requirement that can be facilitated through an employment audit.
Goal of the employment audit
The aim of an employment audit is to evaluate legally relevant circumstances by reviewing labour law documents on relationships between the employer and employees, as well as to map and analyse the critical segments that may imply inherent risks from the perspective of Hungarian labour law. Only some of the problems detected during an employment audit are derived from legal non-compliance. This is because labour law documents that cannot be challenged from a legal perspective, but which are still not able to cover the relationships (and intentions) between the parties in full, can also cause problems. One further objective of an employment audit in Hungary is to offer efficient tools for the employer to minimise/eliminate the labour risks detected (e.g. by preparing sample labour contracts and templates for the notifications, or developing internal policies and supporting their implementation).
Employment audit process
An employment audit can be divided into the following three phases:
- Data and information collection
During the data collection, the following labour documents are collected from the employer:
- labour contracts;
- notifications provided by employer (which are or may be related to, among others, material working conditions and changes thereto, foreign postings, the beginning and end of working time-frame);
- study contracts;
- non-competition agreements;
- working hours and holiday records;
- employer policies.
Additionally, other issues with inherent labour law risks are also explored, including established practices at the employer (e.g. what the local and generally known way of communication is), whether there is a trade union with representation, whether there is a works council or whether the employer is subject to a collective agreement.
- Processing
In light of the available data and information it is checked whether the legal tools applied by the employer are in line with effective legal requirements, thus primarily the provisions of the Hungarian Labour Code and the Act on Occupational Safety and Labour Inspections. At the same time, it is important to take into consideration that the employer also has to pay attention to other legal regulations during the employment, such as the Act on Informational Self-Determination and the Freedom of Information.
- Evaluation
During an employment audit in Hungary, the following problems are generally explored when examining practices at employers:
- failure by employer to hand over the so called “notification by the employer”;
- invalid provisions in labour contracts;
- internal practices or policies violating principle of equal treatment;
- erroneous and/or incomplete records of working hours and holidays;
- unlawful management of personal data, primarily in connection with the right of scrutiny (e.g. checking work e-mails);
- failure to make statements and provide data.
An employment audit provides appropriate and efficient tools for resolving the employment problems identified.
Accordingly, an employment audit can help the employer develop an appropriate, risk-free legal environment.
