Direct Request (CEACR) - adopted 2006, published 96th ILC session (2007)

Employment Policy Convention, 1964 (No. 122) - Hungary (Ratification: 1969)

1. Implementation of an active employment policy. In relation to its 2003 direct request, the Committee notes, as indicated by the Government in the report received in November 2005 that, despite significant fluctuations in the labour market in 2003, employment increased by 51,000 persons and inactivity decreased by 74,000 persons in the same year. It notes, however, that a period of stagnation followed in 2004 during which the number of employed persons decreased by 1.5 per cent, mostly affecting workers in micro-enterprises. Likewise, between 2003 and 2004, the number of workers employed in two of the country’s largest economic sectors (processing and industry) decreased. The Committee notes, however, that the opposite trend appeared in the services sector, which added 100,000 jobs in 2003 and 15,000 more in 2004. It notes the Government’s indication that increased economic competition and the demands of modernization have resulted in fluctuations and considerable restructuring of the labour force. The Committee asks the Government to continue to provide information on the measures taken to reduce the impact of structural adjustment on workers and to ensure the reinsertion of displaced workers into the workforce (Articles 1 and 2 of the Convention).

2. The Committee notes the Government’s statement that Hungary is lagging behind other EU Member States in meeting the employment targets set out in the European Employment Strategy. Most notably, the Government’s report shows that the national employment rate in 2004 stood at 56.8 per cent, whereas the intermediate EU target for 2005 was 67 per cent in overall employment. This gap between the current employment rate and the EU target has led the Government to consider the expansion of employment levels as the most important priority of its employment strategy. In this regard, the Committee notes that the Government’s report contains customized employment targets for the whole of the working population (63 per cent by 2010), for women (57 per cent by 2010) and for older people (37 per cent by 2010). The Committee hopes the Government will be able to provide information in its next report on the progress made towards achieving these targets.

3. In its report, the Government indicates that one of its priorities is to support the expansion and growth of existing companies. In so doing, the Government plans to promote the creation of jobs in these firms by gradually decreasing labour costs, reinforcing the employment potential of SMEs and by creating a predictable financial and legal environment. The Government also intends to review current labour law rules and regulations as an important component of this strategy. The Committee therefore invites the Government to specify what effect these legislative reforms have had on generating employment in the country.

4. The Committee refers to its 2001 direct request on the application of the Employment Service Convention, 1948 (No. 88), and notes that the Government is undertaking reforms to its public employment service to develop the job brokerage system and strengthen cooperation with regional and local actors to improve the employment situation in the most disadvantaged areas. The Committee also notes the Government’s revision of the unemployment benefit system in order to encourage job searching and to strengthen the role that such benefits play in preventing withdrawal from the labour market. The Government is requested to provide information in its next report on the progress of these initiatives and their impact on promoting productive employment.

5. Overall and sectoral development policies. Referring to its previous comments on Convention No. 88, the Committee notes from the Government’s National Action Plan on Social Inclusion that there are significant labour market inequalities between the country’s regions, with the highest rates of unemployment in Eastern Hungary. It also notes that, despite the investment of significant resources in regional development, the experiences of the past years have shown that most of the backward regions have been unable to overcome their disadvantages. It notes from the National Reform Programme for Growth and Employment that a number of measures are planned in an effort to reduce these disparities, including the negotiation of 28 territorial employment pacts setting out local development and employment initiatives, along with a special programme for the Cserehát region. In addition, the extension of public employment services is a positive step towards addressing the inactive populations in disadvantaged regions. The Committee hopes the Government will provide more detailed information in its next report on the design and implementation of these programmes, paying specific attention to their effectiveness in reducing regional employment inequalities.

6. Labour market policies for young people. The Committee notes from the Government’s report that the recent decrease in employment primarily affected young people and that it is increasingly difficult for young workers to find jobs. As evidence of this trend, in 2004, the number of working youth between the ages of 20 and 24 fell by 47,000. The Government explains that the employment challenges facing young people persist due to a shortage of jobs and a lack of qualifications corresponding to the needs of the labour market. As a means to address this situation, the Committee notes the START programme described in the Government’s National Reform Programme for Growth and Employment, which provides incentives to employers to hire young people starting their first job by reducing social security contributions. It also notes the Government’s intention to develop employment services which focus on young people. The Committee requests the Government to provide details on the results of the above measures to facilitate access to employment among young people, as well as its strategy for improving young people’s skills to better match the needs of the labour market.

7. Ethnic minorities. The Committee notes from the Government’s National Action Plan on Social Inclusion that indicators for employment, education, health, income and living conditions of the Roma population are far below the comparable indicators for the non-Roma population, with only half the rate of employment and three to five times the rate of unemployment. The Committee recalls that the Government adopted a set of medium-term measures to promote the social integration of the Roma, including actions on education, training and employment. The Government further indicates its participation in the Decade of the Roma (2005-15) initiative in partnership with other European nations, which likewise includes measures on education and employment. The Committee would appreciate receiving further information on the implementation of these programmes, as well as any assessment of their impact on employment promotion for the Roma.

8. Consultations with the persons affected. The Committee notes with interest the recent National Reform Programme for Growth and Employment (2005-08), undertaken in accordance with the EU’s Lisbon Strategy and based on the country’s earlier National Action Plan for Employment (2004) (NAP). The Committee notes that the NAP sought to create an Inter-Ministerial Committee for Employment to guide the implementation and monitor the progress of the Action Plan and that representatives of the social partners would participate in this body’s work. The Government is invited to provide details in its next report about the Inter-Ministerial Committee’s current status along with information on its activities related to the implementation and review of Hungary’s current employment policies. In particular, please indicate the manner in which representatives of workers, employers and other affected groups are consulted on the formulation, implementation and evaluation of employment policies and programmes (Article 3).