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Contract terms in Hungary
Fixed-term contracts in Hungary
Contract extensions in Hungary
Working hours in Hungary
Remote work in Hungary
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Employment contracts and policies in Hungary
Each country has its own rules and requirements when it comes to employment contracts. Here’s what you need to know before hiring employees in Hungary.
Written employment contracts in Hungary
In Hungary, employers are required to provide each employee with a written employment contract. If they fail to do so, the employee has 30 days after starting work to challenge the validity of the contract. Hungarian employment contracts should mention the employee’s base salary and position, and it’s also recommended to include the place where the work will take place. The employer and the employee can agree on other terms and conditions to include in the contract, as long as they are at least as favourable to the employee as the minimum standards set by Hungarian labour law.
Probationary periods in Hungary
Including a probationary period in an employment contract is a common practice in Hungary. This allows both the employer and the employee to confirm the employee’s suitability for the role before committing fully. The statutory limit on probationary periods in Hungary is three months, though this can be extended to six months by collective agreement. During the probationary period, either party can easily end the contract without notice and without giving a reason. The details of the probationary period should be included in the employment contract.
Third-party approval for employment contracts in Hungary
Unlike in some other countries, there’s no requirement to lodge employment contracts with a third party for approval in Hungary.
Employment policies in Hungary
Employers in Hungary are required by law to have certain internal policies in place. For example, since July 2023, employers over a certain size must have internal whistleblowing procedures. It’s also considered best practice to implement an anti-discrimination policy, although this isn’t a legal requirement.
Contract terms in Hungary
In Hungary, the general rule is that employment contracts are indefinite, although fixed-term contracts are permitted in certain circumstances. Read on for more information about required contract terms in Hungary.
Mandatory employment contract terms in Hungary
Mandatory elements of an employment contract in Hungary include the employee’s base salary and position. Contracts should also include other details necessary to understand the nature of the employment relationship, including:
- Employee benefits.
- Responsibilities.
- Working hours.
- Annual leave entitlement.
- Probationary period.
- Termination terms.
Other terms and conditions of employment in Hungary
The terms and conditions of an employment contract must be at least as generous as those outlined by labour laws and any relevant collective bargaining agreements. Beyond this, employers and employees are free to negotiate their own terms and conditions.
Changing the terms of an employment contract in Hungary
After six months of employment, an employee in Hungary can request to change from full-time to part-time hours or vice versa, to begin teleworking or to transfer to an indefinite-term contract. Employees must make these requests in writing along with the reasons behind them, and employers have 15 days to respond. If they refuse a request, they must provide a clear and justifiable reason for refusal.
Fixed-term contracts in Hungary
If an employer in Hungary only requires an employee’s services for a set period of time, it’s possible to hire them on a fixed-term contract. The maximum duration for fixed-term contracts in Hungary is five years. The fact that the contract is for a fixed term must be explicitly mentioned in the contract itself and agreed upon by both parties. If there is no fixed term mentioned in the contract or the clause is invalid, the contract is reclassified as employment for an unlimited duration.
When fixed-term contracts end in Hungary
A fixed-term contract in Hungary may end on a set date (which should be mentioned in the contract) or on the achievement of a specific goal, such as the completion of a project. Another example is when a fixed-term contract is used to replace an employee who is temporarily away from work (e.g. on maternity leave). In this case, the contract will end when the employee returns to work. The employer should tell the replacement employee how long the contract is expected to last, even if this ends up being different in reality.
Probationary periods for fixed-term contracts in Hungary
It’s possible to include a probationary period in a fixed-term contract in Hungary. However, the probationary period must be shorter than the overall contract. It also can’t be longer than the statutory maximum of three months.
Terminating a fixed-term contract in Hungary
Fixed-term contracts in Hungary end automatically when the term is reached, whether that is a specific date or another trigger. Employers can only dismiss fixed-term employees before the term if one of the following conditions apply:
- The company is undergoing liquidation or bankruptcy proceedings.
- Termination is necessary due to the employee’s ability.
- Maintaining employment is no longer possible for unavoidable external reasons.
To terminate the contract, the employer must give the employee the appropriate notice, which is usually 30 days (35 days after three years of employment).
Employers can also choose to dismiss employees on fixed-term contracts without notice. However, they must pay severance pay of 12 months’ wages. If there is less than a year left on the employee’s contract, the employer only has to pay out the amount the employee would have earned for the remainder of the contract.
Contract extensions in Hungary
As mentioned above, the maximum duration of a fixed-term contract in Hungary is five years. However, even within this time frame, employers are not allowed to conclude multiple successive fixed-term contracts (chain contracts) unless they have a legitimate interest in doing so and it doesn’t infringe the legitimate interests of the employee.
For example, the Supreme Court of Hungary (the Curia) dealt with a case in which an employer renewed a fixed-term contract 19 times in five years. As the employer was unable to state a specific, concrete, economic, or service-related reason for this chain of contracts, they were judged to be invalid. However, courts have also found cases of multiple successive contracts to be legitimate in other cases when the employer has a legitimate interest in concluding them.
What if the employee keeps working after the expiration of the contract?
If an employee on a fixed-term contract continues working after its expiration with the knowledge of their direct supervisor, the relationship is theoretically transformed into a permanent employment contract. However, this poses a problem because employment contracts are required to be in writing in Hungary. This means there are two options in this situation:
- The employee challenges the validity of the now-permanent employment contract within 30 days of their fixed-term contract coming to an end. The employer must then either conclude a valid written contract or terminate the contract without notice. In the latter case, they must pay the employer absentee pay based on their length of employment.
- The employee does not challenge the validity of the contract. In this case, a valid unlimited contract is established between the two parties. The employer may still be fined for labour law violations (i.e. not providing a written contract).
Working hours in Hungary
Full-time employees in Hungary typically work 40 hours per week, spread out over five days. Read on for more information about standard and maximum working hours in Hungary.
Maximum working hours in Hungary
Hungarian employees can work a maximum of 12 hours per day. Weekly working hours may not exceed 48 hours, including overtime.
Exceptions to maximum working hours in Hungary
Workers on stand-by duty, such as on-call doctors, can work more than the normal maximum working hours in Hungary. The same is true for workers who are relatives of their employer or the owner of the business they work for. In both of these cases, the employee must agree to their exemption from the maximum working hours rule.
Overtime in Hungary
Overtime in Hungary is generally restricted to 250 hours per calendar year. However, this can be increased to up to 300 hours by collective agreement. It’s also possible for employees to agree to work an additional 150 hours of overtime in a given year upon agreement with their employer. Any such agreement is terminated at the end of the calendar year.
Pregnant women and mothers of children under the age of three can’t be asked to work overtime in Hungary. The same is true of fathers of children under the age of three, if they are raising the child alone. No employee can be asked to work overtime if doing so would pose a risk to their health.
Pay for overtime in Hungary
Overtime in Hungary is generally compensated at 150% of the employee’s normal hourly rate. This is increased to 200% for work completed on rest days. Alternatively, it’s possible to pay employees a lump sum for any overtime worked if this is stated in the employment contract.
Employers and employees can also agree to time off in lieu of pay, though the 50% supplement still applies. Senior executives and employees who work flexible schedules are not entitled to overtime pay.
Breaks and rest periods in Hungary
Employees who work more than six hours in a day are entitled to a meal break of at least 20 minutes. If an employee works more than nine hours, they are entitled to an additional 25-minute break.
Employees are also entitled to a minimum of 11 hours of rest time between shifts. This is reduced to eight hours for employees working split shifts, continuous shifts, multiple shifts, or doing seasonal work. All employees are entitled to two full days of rest per week, one of which must be a Sunday at least once a month. Alternatively, they can be granted an uninterrupted rest period of at least 48 hours, including one full calendar day. Employees should usually be granted one rest day after every six days of work.
How many hours can a student work in Hungary?
An international student living in Hungary on a residence permit granted on grounds of studies may work for 24 hours per week during term time and for a maximum of 66 working days outside of term time. Students don’t need to apply for work permits as long as they stay within these limits.
Remote work in Hungary
In many countries, remote work has gained significant importance over the last few years — and Hungary is no exception. Many people in Hungary work partially or totally from home or another location away from their employer’s premises.
Different types of remote work in Hungary
Legally, remote work in Hungary is divided into two categories: telework and home office work. Home office work is occasional remote work that takes place on an ad hoc basis. This type of remote work is not regulated by the Labour Code.
However, the Labour Code does regulate teleworking, which is defined as work carried out outside the employer’s premises on a regular basis. Teleworking must be agreed upon by the employer and the employee. Many companies in Hungary have internal regulations governing teleworking, though this is not currently a requirement.
Employers’ responsibilities concerning remote workers in Hungary
Employers of employees who regularly work remotely (teleworkers) must usually provide their employees with the IT equipment they need to work, such as a laptop, mouse, and keyboard. They don’t usually need to provide other equipment like chairs or desks. Employers must either reimburse employees for the additional costs of working from home or pay them a lump sum for each day of telework.
Employers also have some health and safety obligations concerning remote workers. For example, they must inform employees in writing about the rules related to working conditions. Teleworking employees are covered by legislation governing work-related accidents or illnesses, as long as these are not the result of the employee’s non-compliance with health and safety information provided by the employer.
Tailored employment contracts in 100+ countries
Like all countries, Hungary has its own rules and regulations when it comes to employment contracts — and non-compliance could land your company in hot water.
Thankfully, our team is experienced in drawing up tailored, compliant contracts in Hungary (and more than 100 countries worldwide). That means that, when you work with us, you won’t need to waste time worrying about whether you’ve got it right. Instead, you can focus on what matters: your business.
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