Member States had until 30 July 2020 to transpose the European Union directive that revised the concept of cross-border postings into their national legislation. The purpose of Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services (hereinafter: Directive) is to sustain the balance between the freedom to provide services, equal competition conditions and the protection of the rights of posted employees.
The Directive reforming cross-border postings has been implemented by Hungary too. In our article, we summarise the important modifications of Act I of 2012 on the Labour Code (hereinafter: the Labour Code) supporting compliance with the Directive.
Supplementing the minimum work requirements applied for cross-border postings
During cross-border postings employees posted to Hungary are subject to the rules of Hungarian labour law with regard to
- amount of longest working hours or shortest rest time,
- lowest amount of paid annual leave,
- conditions of temporary work defined in Sections 214-222 of the Labour Code,
- occupational health and safety conditions,
- employment and working conditions of pregnant women or mothers with small children, or young employees,
- the requirement of equal treatment,
and, as a result of implementing the Directive, with regard to
- the universally applicable remuneration in the country of work (instead of the lowest wage applicable prior to the transposition of the Directive),
- conditions of accommodation provided for the employee by the employer and
- the allowances or reimbursement of expenditure to cover travel, board and lodging expenses for employees temporarily employed in Hungary on a posting, or during their stay in Hungary when posted to a place of work other than their regular place of work
including the provisions laid down in the collective agreements regarding employment. An exception can be made from this rule if the foreign law or the parties’ agreement governing the employment is more favourable than the Hungarian standard.
Introducing definition of long-term posting
The preamble of the Directive stipulates the temporary nature of postings. Employees posted under cross-border postings normally return to the sending country after their job is completed. However, there are long-term postings too, when the host Member State has to ensure the mandatory employment conditions pertaining to the employee are enforced.
To comply with the Directive, the Hungarian Labour Code stipulates that if the term of the cross-border posting exceeds 12 months, the provisions of the Hungarian Labour Code must be applied for the employment – with the exception of the provisions of Chapters VII and X and Section 228 and the provisions on supplementary occupational pension schemes in the Labour Code. An exception can be made from this rule if the foreign law or the parties’ agreement governing the employment is more favourable than the Hungarian standard. The above period can be extended by another six months if a request, including reasoning, is submitted to the labour authority by the foreign employer.
Introducing definition of replacement postings
If the foreign employer replaces the employee with another employee conducting the work in a given position in Hungary, then the duration of the posting – with regard to the above – equals the aggregate posting period of the employees affected by the replacement posting. Applying this rule ensures that the replacement is not implemented for the purpose of evading the otherwise applicable rules. The nature of the service to be provided, the tasks to be accomplished and the place of work must be taken into consideration to determine the job to be performed at the given workplace.
Labour authority inspections
Hungarian Act LXXV of 1996 on Labour Inspections was also amended to implement the transposition of the Directive. On this basis, the power of the labour authority covers the inspection and sanctioning of compliance in accordance with the Labour Code pertaining to the employment of an employee posted to Hungary under the framework of cross-border postings.
On reading the above it is best to make plans for the labour law, social security law and tax law aspects of cross-border postings in order to set up legal arrangements which are compliant with the new legal environment. Legal experts at WTS Klient Hungary have significant experience in all these areas and are ready to assist you.
