The Future is Now: The New World of Work in Hungary

As a result of the COVID-19 pandemic and measures put in place in response, countries around the world – including Hungary – have adopted new innovations in the area of employment in a bid to keep their workers safe and productive. One such innovation is work from home.

More than a year after the pandemic began, home-office work has proven so effective, many believe it will become a fixture of our post-pandemic future. But remote work raises a host of legal and administrative challenges. This article – based on the 20 April 2021 webinar The Future is Now: The New World of Work in Hungary and hosted by legal experts Gabriella Ormai and Boglárka Peszeki with CMS Budapest – explores the impact of 'remote work' in Hungary for both workers and companies.

The changing face of work in Hungary

According to Gabriella Ormai, a Partner with CMS Budapest, remote work in Hungary is divided into two categories: telework and home office work.

Both existed before the pandemic and were occasionally utilised. However, like everywhere in the world, these forms of remote work became widespread in Hungary with the advent of the pandemic.

Telework vs home office

Telework is defined in the Hungarian Labour Code, but home office work is not regulated by the Code. In addition, there are other differences between these two modes of remote work, such as the following:

• Telework is carried out outside of the employer's premises on a "regular basis" whereby home office takes place on an "ad hoc basis".
• Telework can only occur if employee and employer expressly agree on this arrangement whereby home-office work does not require an agreement between the parties.
• Telework is conducted at an address agreed upon by the parties while an employee can choose the location of home-office work.
• Telework offers a flexible working-time schedule where the home-office work schedule remains unchanged.
• Telework enjoys specific health and safety rules in addition to the standard regulations where there are no additional health and safety measures for home-office work.

The differences between telework and home-office work are outlined below in detail.

Telework

According to CMS labour law specialist Boglárka Peszeki, regulations governing telework are found in Sections 196-197 of the Hungarian Labour Code, which defines telework as work performed on a regular basis at a place other than the employer's premises, using an IT device, where the end result of the work is delivered electronically.

The Hungarian Labour Code, however, does not provide a definition for "regular basis". Thus case-law must be considered, which suggests that if an employee spends at least 50% of his working time at a place other than the employer's premises, this qualifies as telework.

In addition, a Hungarian Supreme Court ruling stated that if an employee spends one or two working days per week at a location away from the employer's jobsite and the days at this remote site are the same each week (e.g. each Tuesday and Wednesday), the arrangement for these days should also be treated as telework.

The pandemic response of many companies to have their workers rotate their location from office to home on a regular basis meets the definition of telework. As a result, employers in this situation are advised to treat their employees as teleworkers and to follow all statutory requirements. For example, companies should conclude a special employment agreement with each teleworker that defines his activities as telework (or partial telework) and specifies an exact teleworking location.

Lastly, the employer has additional information obligations towards teleworkers: the employer must specify the business unit where the employee belongs, any restrictions on the usage of IT devices provided by the employer and the checks conducted by the employer at the place of telework.

Home office

Different from telework, home office work does not fall under the regulatory umbrella of the Hungarian Labour Code (although this may change in the future). As a result, employers have the right under certain circumstances to provide employees with the opportunity to conduct home-office work. In this case, the employee can specify the location where professional duties will be carried out, which in most cases will be the employee's home residence.

In addition, home-office work has the following characteristics:

• Companies are strongly advised to draft internal regulations on home-office work, which provides the procedures for implementing this arrangement, and how home office work should be conducted.
• Home office internal policies should also cover issues such as the use of company equipment, etc. and give the employer the right to discontinue a home-office arrangement if deemed necessary (e.g. if there are "performance issues" with the employee).
• Home office internal policies should be drafted in a way to give an employer the flexibility to adapt to all emergency scenarios.

Special telework-related legislation

In response to COVID-19 and the pressing need to assign employees to remote work, the Hungarian government passed Decree 487/2020, which for a fixed term (the planned end date being 22 May 2021 at the time of this webinar) sets down the following specific rules for implementing telework during the pandemic-related state of emergency:

• Employers can pay teleworkers a lump sum tax-free monthly compensation for expenses incurred due to telework, the amount of which is capped at 10% of the Hungarian mandatory minimum wage (in the case of a full-time telework).
• In order to be eligible for this compensation, the employer and employee must enter into a written telework agreement.
• When negotiating this agreement, the parties can agree on terms that deviate from the statutory telework rules in order to implement a more effective arrangement for both employer and employee. In the experience of CMS experts, many companies have used this deviation possibility provided by the decree to specify more than one location to conduct telework.
• The general health and safety rules concerning telework provided by the Hungarian Occupational Health and Safety Act do not apply under the decree; the employer must inform (e.g. via a unilateral letter) employees of the working conditions that are not harmful to the life and health status of workers, and the employee must choose a telework location in compliance with this information. Thus, if under the agreement of the parties, the employee carries out telework from many different locations (not only one), then these locations must all meet the health and safety regulations provided by the employer.

Staff mobility

The Hungarian government also issued a pandemic-related decree (Decree 408/2020 with amendments issued as recently as 1 March 2021) that affects staff mobility.

Specifically, the decree allows for Hungarian employees to travel to other EU countries for the purposes of conducting business and to return to Hungary without the obligation of staying in quarantine or facing other restrictions. To avoid restrictions, these employees must possess a "certificate" (i.e. a letter from the company deeming the travel as a business trip) and present this at the border (if needed) when re-entering Hungary. Obviously, the travelling restrictions of the destination country must be analysed on a case-by-case basis.

Foreign employees from approved countries (specified by the Hungarian government based on each country's epidemic risk level) can also enter Hungary for official business purposes and are exempt from restrictions such as quarantine if they also have the required "certificate".

Primary health and safety rules

General health and safety regulations require employers to adopt all measures to ensure that working conditions are not harmful to the health status of employees. This general requirement includes inter alia providing appropriate protective equipment to employees, assessing and reassessing risk in the workplace, and providing health and safety training to employees on a regular basis.

In addition, employers with teleworking employees have special health and safety obligations: the employers are required to conduct local checks at a telework location, and confirm that the workplace meets all health and safety requirements.

Because such inspections were difficult to conduct during the pandemic, some employers circumvented physical visits to teleworker offices by requiring employees to fill out health-and-safety questionnaires and attach photos or videos confirming statements made in the questionnaire. Although this kind of inspection method is not prohibited under the law, there is no Supreme Court case-law confirming that this approach complies with the law. Thus applying this method carries some risk.

Paperless employment relations

A large number of Hungarian employees were assigned to telework and home office work over the past year due to the pandemic. This increased the need for paperless employment and raised the question from the clients' side whether it is possible to sign employment-related documents electronically?

Before answering this question, it must be determined whether the Hungarian Labour Code prescribes a mandatory written form concerning the statement or if the agreement can be signed electronically.

If written form is not mandatory, then no special requirements apply. Verbal statements can be made and verbal agreements can be concluded.

However, if the written form is mandatory, then the question arises: how is it possible to sign the statement or agreement other than with the traditional wet-ink signature. In this respect, certain case studies are available as follows.

According to the Hungarian Supreme Court, if a document is printed and signed by the employer and afterwards is scanned and sent to the employee as a PDF document via e-mail, then this qualifies as written form.

CMS legal experts have noticed that instead of the method cited above clients prefer using electronic signatures, which – according to case-law – are also accepted and compliant with the law. Also, if an employer wishes to sign HR-related documents electronically, it is highly recommended that an internal e-signature policy be introduced.

For more information on how to implement remote work in Hungary, contact your CMS client partner or local experts: Gabriella Ormai and Boglárka Peszeki.