Observation (CEACR) - adopted 2022, published 111st ILC session (2023)

Right to Organise and Collective Bargaining Convention, 1949 (No. 98) - Hungary (Ratification: 1957)

The Committee notes the observations of the International Trade Union Confederation (ITUC) received on 1 September 2022 concerning matters examined by the Committee in the present comment. It further notes the observations of the International Organisation of Employers (IOE) received on 25 August 2022 concerning the discussions that took place at the Conference Committee on the Application of Standards with respect to the application of the Convention.

The Committee also notes: (i) the observations of the workers’ group of the National ILO Council (NILOC) in relation to the Report sent by the Government in view of the discussion before the Committee on the Application of Standards; (ii) the summaries provided by the Government of the position expressed by the workers’ group of the NILOC concerning the report submitted by the Government to the Committee.

Follow-up to the conclusions of the Committee on the Application of Standards (International Labour Conference, 110th Session, May–June 2022)

The Committee notes the discussions held at the Conference Committee in June 2022 on the application of the Convention by Hungary. The Committee notes that the Conference Committee, noting with concern the significant compliance gaps in law and practice regarding the protection against anti-union discrimination, the scope of collective bargaining permitted under the law and interference in free and voluntary collective bargaining with respect to the Convention, requested the Government to: (i) review relevant labour legislation to ensure that the representativity threshold is not set in a manner that prevents workers from exercising their right to collective bargaining; (ii) ensure that union officials, union members and elected representatives enjoy effective protection, in law and practice, against any act prejudicial to them, including dismissal, based on their status or activities; (iii) ensure no undue interference in the establishment, functioning and administration of trade unions; and (iv) provide information on the average duration of both judicial proceedings and proceedings before the Equal Treatment Authority (ETA) related to anti-union discrimination.

The Committee further notes that the Conference Committee requested the Government to: (i) avail itself, without delay, of ILO technical assistance, to ensure compliance with the provisions of the Convention in law and practice; and (ii) submit a report to the Committee by 1 September 2022 on the application of the Convention.

The Committee notes that in July 2022, the Government requested the technical assistance of the Office with respect to the Convention and that a first meeting took place in August 2022 in order to exchange on the modalities of such assistance.

Article 1 of the Convention. Adequate protection against acts of anti-union discrimination. The Committee recalls that it had requested the Government to ensure that trade union officials and members enjoy effective protection against anti-union discrimination and to provide information on the average duration of the related judicial and administrative proceedings. Concerning the specific protection of trade union officials, the Committee notes with satisfaction the Government’s indication that, as a result of Act CLIX of 2017 the definition of employee representatives in the Labour Code now covers trade union officials, enabling them to request their reinstatement in case of unlawful dismissal.

As for trade union members other than officials, the Committee noted in its previous comment the legal provisions of the Labour Code that provide, through judicial procedure, for compensation (not exceeding the worker’s 12-month absentee pay) in case of dismissal and reinstatement in case of violation of the principle of equal treatment (section 82 and 83(1)(a) of the Labour Code). The Committee further notes the Government’s indication that the trade union member may demand compensation under section 166(1) of the Labour Code if the employer caused damage to the employee in connection with the employment relationship. As for the procedure under the Equal Treatment Act in response to the Committee’s previous comment, the Government indicates that the legal consequences set out in the Equal Treatment Act do not extend to reinstatement and the ETA may not provide for compensation. The ETA, however, may impose a fine of HUF50,000 to HUF6 million and order the publication of its anonymised final decision.

Concerning the Committee’s request to provide information on the average duration of both judicial proceedings and proceedings before the ETA, the Committee notes that the Government only provided data for the average processing time before the ETA (66 days excluding the duration of suspension). The Committee also notes that out of the 17 cases submitted before the ETA since June 2017, 10 cases resulted with the rejection of the request and 7 with the termination of the proceedings. The Committee notes that while the reported data allows for a better understanding on the number of submissions, it does not provide sufficient information to determine the grounds on which the cases were rejected by the ETA.

The Committee takes note of the observations of the workers’ group of the NILOC that the legislation lacks dissuasive sanctions and that the data provided on the cases examined by the ETA illustrate both the low number of proceedings and that in the majority of cases the ETA rejects the applications submitted by employees and trade unions. Regarding the above, the Committee wishes to recall that the existence of legal provisions prohibiting acts of anti-union discrimination is not enough if they are not accompanied by effective and rapid procedures to ensure their application in practice and if the sanctions provided for are not effective and sufficiently dissuasive. In view of the above, the Committee requests the Government to: (i) provide comprehensive information on the average duration of both judicial proceedings and proceedings before the ETA, together with details on remedies provided, the number of claims rejected and the grounds for any such rejections; (ii) provide information on the legal provisions under which anti-union discriminatory acts, other than dismissal, can be remedied and the way they are applied; and (iii)carry out, in consultation with the social partners, a comprehensive examination of the effectiveness of the existing protection mechanisms against anti-union discrimination. The Committee requests the Government to provide information in this regard.

Article 2. Adequate protection against acts of interference. In its previous comment the Committee requested the Government to take steps to adopt specific legislative provisions prohibiting such acts of interference on the part of the employer and making express provision for rapid appeal procedures, coupled with effective and sufficiently dissuasive sanctions.

The Committee notes the Government’s indication that in addition to the provisions of the Labour Code, the autonomy of trade unions is regulated by Act CLXXV of 2011 on the right of association and the Civil Code. The Committee notes the detailed description from the Government of the various provisions of the above laws and the indication that since Act LV of 2000 on the promulgation of the Convention forms part of the Hungarian legal system, consequently Article 2 of the Convention should also be deemed applicable. The Committee observes however that neither Act LV of 2000 which contains the official Hungarian translation of the Convention nor the other legislative instruments mentioned by the Government include provisions that specifically prohibit and sanction the acts of interference covered by Article 2 of the Convention. The Committee is therefore bound to reiterate its previous comment and request the Government to take steps to adopt specific legislative provisions prohibiting such acts of interference on the part of the employer and making express provision for rapid appeal procedures, coupled with effective and sufficiently dissuasive sanctions.

Article 4. Promotion of collective bargaining. Representativeness requirements. The Committee notes the Government’s explanation that the uniform 10 per cent threshold for conclusion of collective agreements set by legislation was established with the goal to enhance collective negotiations and to simplify the previous conditions set regarding the ability to conclude collective agreements. The Government adds that deviation from the 10 per cent threshold would: (i) enable trade unions with fragmented support under the 10 per cent threshold to exercise the right to jointly conduct collective bargaining and conclude collective agreement; and (ii) could set aside a trade union or a confederation that alone reaches the 10 per cent threshold. The Committee notes the observations received from the workers’ group of the NILOC that the law restricts the ‘coalition’ of trade unions for collective bargaining in cases when no trade union reaches the 10 per cent threshold. The Committee requests the Government, after consultation with the representative social partners, to examine the possibility of allowing for the coalition of trade unions at the workplace in cases where no trade union reaches the required representativity individually.

Negotiation with work councils. The Committee notes the observations of the workers’ group of the NILOC concerning the possibility for works councils to enter into agreement with the employer in relation to working conditions (except on remuneration). The Committee notes that according to the wording of section 268(1) of the Labour Code: “Such agreements may be concluded on the condition that the employer is not covered by a collective agreement it has concluded, or there is no trade union with entitlement to conclude a collective agreement”. The Committee notes that under this provision, an employer is entitled to conclude a collective agreement with a works council even if there is a trade union organisation in the company, as long as the latter does not reach the representativeness threshold set by the legislation to be able to bargain collectively. The Committee recalls that Article 4 of the Convention refers to collective bargaining between employers or employers' organizations on the one hand and workers' organizations on the other hand, and that it considers that, in order to ensure an effective promotion of the negotiating capacities of workers’ organizations, negotiations with non-union actors should only be possible in the absence of trade unions at the respective level. The Committee therefore requests the Government, after consulting the representative social partners, to review section 268(1) of the Labour Code accordingly.

Material scope of collective bargaining in publicly-owned entities. In its previous comments, under the Collective Bargaining Convention, 1981 (No. 154), the Committee requested the Government to indicate which subject matters were excluded from the scope of collective bargaining in publicly-owned entities. The Committee understands that this question concern mainly public sector workers not engaged in the administration of the State that are therefore fully covered by the Convention.

The Committee notes the Government’s response that sections 204–208 of the Labour Code set out the rules on employment at publicly-owned entities. These rules are mandatory and cannot be derogated neither by an individual nor by a collective agreement (section 213(f) of the Labour Code). These rules encompass: the notice period and severance payment, exceptions to working time (i. e. break from work, except for stand-by work; travel time), full daily working time shorter than general full daily working time may not be prescribed in a publicly-owned entity, except to prevent a hazard or danger to health (section 205(3) of the Labour Code). Finally, derogation from provisions of Chapters XIX-XXI of the Labour Code regulating labour relations is not permitted (section 206 of the Labour Code). Chapters XIX-XXI concern the regulation related to the establishment, functioning and dissolution of works councils and trade unions, including rules related to time allowances provided for trade union officials. The Government indicates that such rules were required by the special “legal status” and economic role of the employer in publicly-owned entities to ensure efficient management and prevention of abuse of State assets, enhanced enforcement of public interest, performance of public functions, publicity related to community objectives and to improve public opinion of companies.

The Committee recalls that workers of state-owned commercial or industrial enterprises are fully covered by the Convention. While the special characteristics of the public service, may allow for some flexibility, legislative measures taken unilaterally by the authorities to restrict the scope of negotiable issues are often incompatible with the Convention, and tripartite discussions are a particularly appropriate method of resolving these difficulties. While taking note of the justification provided for by the Government, the Committee is of the view that the matters excluded from collective bargaining at publicly-owned entities under articles 205-206 go beyond the restrictions that are compatible with the Convention. The Committee therefore requests the Government to initiate discussions with the social partners in order to revise the referred restrictions of the material scope of collective bargaining in publicly-owned entities.

Collective bargaining in practice. The Committee notes the data provided by the Government on the number of collective agreements for the period of 2012–19. While noting the observation of the workers’ group of the NILOC that it is unclear from the data what the number of agreements refers to, the Committee observers that the data shows that in the private sector, in spite of a small increase in the number of collective agreements (from 942 in 2012 to 1011 in 2019), the number of workers covered decreased over the same period of time (from 442,723 to 397,650). In the public sector, both the number of agreements and the number of workers covered decreased at a higher rate (from 1,735 to 820 and from 261,401 to 193,695). In terms of data available for collective agreements covering more than one employer or institution, the data indicates a slightly upward trend in the private sector (from 81 to 84 and 204,585 to 229,477) though the data on collective agreements covering more than one institution in the public sector only refers to the agreement concluded between the State Health Care Centre in 2018, covering 56,612 employees. The Committee also notes that according to the data available at ILOSTAT, the collective bargaining coverage rate in Hungary in 2019 stood at 17.8 per cent. With respect to sectoral level collective bargaining, the Committee notes that there are currently three extended sectoral collective agreements in the construction, tourism and hospitality, and electricity industry. The Committee takes note of the information provided by the workers’ group of the NILOC according to which there was a significant decline in the operation of Sectoral Dialogue Committees, partially due to the decrease in governmental support to their operation. The workers’ group also indicates that recent amendments to provisions on extension of collective agreements further complicated and increased the bureaucracy of the option of extension. The Committee requests the Government to provide its comment on the workers’ observation concerning the extension mechanism and to supply information on the rules relevant to sectoral collective bargaining, including with respect to the extension of collective agreements.

The Committee finally requests the Government to continue providing information on the number of collective agreements signed, the sectors concerned and the share of the workforce covered by collective agreements and to also provide the same statistics, where available, for works agreements.

The Committee hopes that the technical assistance requested from the Office will contribute to the full application of the Convention both in law and in practice.

The Committee is raising other matters in a request addressed directly to the Government.