Direct Request (CEACR) - adopted 2010, published 100th ILC session (2011)

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

The Committee notes the Government’s report received in October 2009 including its replies to the 2008 direct request. The Committee has also benefited from an analytical contribution by the ILO Subregional Office in Budapest.

Articles 1 and 2 of the Convention. Employment trends. The Committee notes the Government’s increased effort to integrate its labour market and employment measures with the socio-economic policies under the National Action Programme 2008–10, despite the fiscal challenges resulting from the global financial crisis. The Government reports an employment rate of 56.7 per cent in 2008 and of 55.1 per cent between January and March 2009. The unemployment rate has increased from 7.9 per cent in 2008 to 9.7 per cent in the first three months of 2009, such that the unemployment rate in March 2009 was 0.9 per cent higher than the European Union’s average rate. In 2008, there was considerable reduction in some public sector industries, including health care, utilities, telecommunications, and postal services, as well as in the construction industry due to the end of a building boom. Mass redundancies have also risen sharply since the third quarter of 2008 due to the global crisis, affecting 29,200 persons between April and October of 2008. The Committee requests the Government to provide information in its next report on policies and programmes promoting full employment and how these policies and programmes will translate into productive and lasting employment opportunities for the unemployed and other categories of vulnerable workers affected by the crisis.

Implementation of active labour market measures. In this respect, the Committee notes that the number of participants in the Government’s Active Labour Market Programmes has increased by more than 20 per cent since 2007 as a result of improvements in the management of public employment services and the programmes’ capacity to meet individual needs. In 2008, 191,000 persons participated in the programmes, which included a labour market training, wage subsidy, and public works. In 2007, the Government launched the Social Renewal Operative Programme to increase employment by: (i) providing assistance to the disadvantaged groups through labour market programmes, regional labour centres, targeted contribution allowances, and support of civil organizations; (ii) increasing employee adaptability through restructured vocational and adult training, on-site training courses, development of social partners’ capacities, increased transparency in the field of employment, and lastly, new measures to incentivize employers against dismissals during the economic crisis through contribution allowances. Despite the Government’s active measures and efforts to align its employment policy with the economic crisis, the Committee notes that the employment indicators have continued to fall. The Committee invites the Government to provide information on improvements in the Active Labour Market Programmes’ design by focusing on policy objectives rather than types of measures. In this regard, the Committee would appreciate reviewing information on impact estimation and cost-benefit analysis of the pilot labour market programmes and the programmes’ coverage rates of vulnerable groups.

Equitable regional development. The Committee notes the steps taken to address the regional disparities in development under the Cserehát Programme. It also notes the Government’s efforts to commit more resources to the employment centres in the disadvantaged regions under the framework of the New Hungary Development Plan. The Committee invites the Government to include in its next report information on the impact of the regional development policies adopted to generate employment in the low-income areas. In this connection, the Committee reiterates its interest in examining information on the specific labour market situation of the Roma population, focusing on the group’s employment and earnings.

Youth employment. The Government indicates that Hungary’s chronically lower employment level compared to the European Union’s average can be partly attributed to the low participation of young people in the labour market. The Committee notes that only about 20 per cent of those between 15–24 are employed, while the European Union’s average for the same age group is 39 per cent. This gap in the employment rate has increased in the period between
2007–08 due to a further decrease in youth employment. The Start Programme, introduced in 2005, aims to increase youth employment opportunities by providing contribution allowances to employers when hiring an employee with a Start Card, which are issued only to career starters under 25 or 30 depending on their education level. The number of young persons employed with Start Cards has steadily increased since the programme began, from 3,561 in 2005 to 38,334 in 2007 and to 40,750 in 2008. The Committee notes that the total youth unemployment level is nevertheless much higher, at 84,000 unemployed young workers. The Committee invites the Government to provide detailed information in its next report on the results achieved in terms of the creation of jobs for young persons through the Start Programme and other measures adopted, including evaluations of the impact of these measures on the long-term integration of young persons into the labour market.

Education and vocational training. The Government reports on further restructuring of the Regional Integrated Vocational Training Centres since 2008 under the framework of National Development Plan II, based on the evaluation of 16 centres founded before 2007. The restructured centres aim to provide more cost-efficient training that is better adjusted to the regional labour market and more connected to the performance of duties. The Government indicates that the Regional Development and Training Committees were given more power in 2008 so that decisions regarding the Regional Vocational Centres are now made at the regional rather than the ministerial level to improve the coordination between vocational training, regional development and the labour market. The Committee notes with interest that the Hungarian Chamber of Commerce and Industry has the power to appoint the president of the examination board and organize vocational competitions for students. The Committee also notes that employers are requested to employ students who spend more than 50 per cent of their training period with them. Financial assistance is reduced for business associations that do not provide their own practical training, while micro- and small enterprises receive a higher level of vocation-related contribution from the Government. In response to the crisis, the Government has introduced a new measure that combines contribution allowances to employers who choose reduction of employees’ work time over dismissal and training of the affected employees during their newly freed time. The Committee invites the Government to provide information on the impact of the measures mentioned above on enabling a better alignment of vocational education and future labour market needs. The Committee would appreciate examining relevant data on the demographic trends of the labour aggregates, as well as skills supply and demand, possibly at sector level.

Article 3. Participation of the social partners. The Government indicates that the social partners have been involved in the national implementation of the Lisbon Strategy through the National Council for the Reconciliation of Interests, a tripartite forum that includes nine employers’ and six workers’ organizations. The Committee invites the Government to continue to provide information on the social partners’ participation on employment policy formulation and implementation, focusing on mid-term reviews of employment and training programmes.