2013. February 01.

New Labour Code - New employment contract?

The Act I of 2012 on the Hungarian Labour Code (“LC”) featured numerous novelties, since it has recently entered into force 1 January 2013, therefore it is worth to review among our own companies if there are any contracts which possibly need modification, as well as the applied methods and behavior upon selecting a future employee, equally from an employer and an employee point of view. Additionally, in case of certain legal conditions the already existing employment contracts’ modification may be necessary.

  1. The right to lie – is lying allowed in an employment relationship?

In the course of establishing a new employment relationship, that is typically in job interviews a large amount of information is exchanged within a short period of time, but what are the limits which are permissible and where is the fine line which stirs up the rules of the expected behavior and the parties’ mutual cooperation obligation in such situation?

The data protection commissioner’s principle on the right to lie is acknowledged and applied by the judicial practice as well, but let us take a closer look at what all this means.

The most practical example for the above is upon establishing or existing of an employment relationship, if the employer asks questions regarding the employee’s family planning intentions, this qualifies as the employer's breach of its cooperation obligation. Given that as a response to such occurrence it is not expectable from the employee’s side to fulfill the proper cooperation – as this is a question regarding the most private and intimate spheres of the employee - therefore the employee has the right to lie regarding the information on family planning.

Similar questions may be raised regarding the test series used to measure the adequacy to the given field of work. Most employees usually without any questioning undertake such tests, thinking that it is part of their job duties, or expect to acquire the position they are applying for specifically through participating. In these cases also there are permissible factors as well as ones that go beyond what is acceptable.

Psychological and various other types of personality tests, further the analyzing methods thereof are becoming more and more common. However, it is less commonly known that for the employers to receive knowledge on any conclusions from test results which regard the personality of the employee, the previous consent of the employee must be granted.

In practice, the approval of the employee is considered to be granted upon the fact that the employee undertakes such psychological test. However, it is important to know that the employee is entitled to a reservation right. This means that the employee can learn about the personality test results prior to the employer, and based on the results can decide whether the employer should recognize the results of the test already analyzed or not. The precondition for the employee to practice such right to decide on the aforementioned is the proper discretion and cooperation of the human resources (HR) department.

  1. New workplace - new employment contract?

It is a novelty in the LC that the compulsory content elements of the employment contract have been modified. Unlike the previous regulation, besides the salary and the job description, the location of where the work is performed, that is the workplace must no longer be determined in the employment contract. Let us take a look at what this means in practice.

If the employment contract was concluded prior to when the new LC entered into force, that is prior to 1January  2013, and the contracting parties indicated the workplace as a variable workplace, then according to the new labor law regulations the applicable workplace is where the employee usually performs the work.

According to the previous regulations, based on the variable workplace, the employer was entitled – within the legal framework - to unilaterally impose on the employee, when to work in which branch or work site. This type of labour law clause is not legitimate anymore as of 1 January 2013; therefore solely referring to the variable nature of a workplace in employment contracts is no longer possible.

If the parties have previously agreed a variable workplace, however the employer would like to hire the employee for work to be performed previously from one branch in future at another branch permanently, then the modification of the employment contract is necessary. The same case applies when the employer’s registered seat is indicated as the workplace; however the registered seat changes in the meantime. These kinds of problems can be prevented with the wording whereas the employer's workplace is determined for example as the “all-time prevailing” registered seat of the employer.

Upondetermining theemployers “all-time prevailing” registered seat as the workplace the legitimate right of withdrawal must be taken into account. If any significant change regarding the prevailing conditions of the employment contract has occurred since the establishment of the employment relationship, which makes the continuation of the employment impossible (objective circumstance – for example the daily commute to the workplace would take up more time than the daily work hours), or which would mean disproportionate harm (subjective circumstance - for example the mother of a young child would not be able to pick up her child on time form the kindergarten), then the employee is entitled to rescission from the employment contract.

However, it is not excluded to indicate a broader geographic location, such as a county or city. It is important though to handle even broader definitions than the aforementioned cautiously, whereas in accordance with the judicial practice, such determinations as "Hungary" or "Europe" as workplace are no longer considered as legitimate provisions. In this case the requirements for proper practice of rights and reasonable procedure also prevail.

It is important to emphasize in connection with the workplace, that if the employer’s intention for termination notice is due to the employee's ability or reasons related to the employer’s operations, then the termination of the employment relationship is considered as legitimate, if within the indicated workplace (or in lack of such determination, where the employee usually carries out the work) there is no opening for any other job which requires the employer’s ability, education or experience.

That is, if for example the employer indicated its work sites as the employee’s workplace, then each and every one of the employer's work sites must be separately examined as per whether there is a possible open position for the employee based on the aforementioned conditions.  Therefore, it is worth taking proper care that the employment contract to be concluded bears a realistic content, which includes the actual workplace and reflects the generally usual work circumstances.

2013. January 23.

Audit Services of the Hungarian DPA

As from 1 January 2012 the Hungarian DPA opens its services for providing audit services. The audit service is regulated by the Privacy Act, however data controllers and experts still have a lot of concerns regarding the service. In Hungary no other authority has the same entitlement.

According to chapter 39 of the Privacy Act the data protection audit „is a service provided by the authority designed to evaluate and assess data processing operations in progress or proposed along technical merits, intended to effectively implement a high level of data protection and data security system”. The unclear wording of the act raises concerns and suggests that it is possible to request that the authority analyze the technical system and safety of the technical equipment used by the data controllers. Proposed data processing operations may be audited if deemed justified based on the elaboration of the data processing concept.

The audit service can be conducted by the Authority solely at the data controller’s request. It is not clear, whether it can be requested by any of the controllers if there are more than one controllers, or the controllers shall request it jointly.  For the data protection audit an administrative service fee shall be charged in the amount decreed by the relevant minister. This fee is not yet made available to public, however, based on official communications it will be determined on a case by case basis.

 The Authority records the results of the data protection audit in also called audit report, however there are no guidelines for the minimum content of such report. The audit report may also contain recommendations for the data controller. The audit report shall be considered public, unless the controller requests otherwise.

 It is important to note that the audit service does not qualify as negative clearance, the authority may open any procedure during the audit. However, if the data controller complies with the recommendations of the authority, no fines can be applied for the same conduct.

If you have any questions regarding this issue, feel free to contact our Partner:

Dr. Andrea Klára Soós

+ 36 1 270 99 00

2013. January 21.

The term of “family” cannot be limited to the relationship of a man and a woman

The Constitutional Court – with its ruling No. II/3012/2012. – has annulled Section 7 of Act CCXI of 2011 on the Protection of Families, which unduly narrowed the term of family.

The above mentioned act defines the family as an emotional and economic community in a system of relations, based on the marriage of a man and a woman, or lineal descendants, or guardianship.

This definition complies with the marriage and family protecting clause of the Constitution (Article L. of the Constitution), however, it only includes a part of the possible and existent family relations. Because it does not follow from Article L. of the Constitution that the relations included in the wider sociological term of family, based on mutual care and permanent emotional and economic community, aiming at the same goal (e.g. like the partners caring about and raising each other’s children, partners not wishing to get children, or  partners of different sexes who cannot have children through other reasons, the widows, persons caring about their sibling or children of their siblings or other kin, or those caring about an elder kin of the ascending line, etc.)  would be excluded from the obligation of the republic on protecting the institution.

Considering, that the family, in a wider sense, is under the protection of the Constitution, the legislator may not enact provisions which narrow the constitutional conception of the family.

Present ruling of the Constitutional Court will have effects in Hungary on the new Civil Code as well as on the subvention system of the families.

2013. January 02.

Globalaw Firms form partnership in CEE - Globalaw

Welcome to the BWSP Gobert and Partners legal Blog, where you will be able to read interesting articles of our Partners, Lawyers and Junior Associates. Before we post our first article here is a little background information on our firm:

BWSP Gobert & Partners Attorneys and Tax Advisors was founded in 2002 and started as an affiliate to one of the largest law firms in Hungary and a “big-four” tax and accounting firm in the early 90’s. Being formerly associated with such names as Arthur Andersen, Pinsent Masons and Ernst & Young, today BWSP Gobert & Partners is a completely independent full-service commercial law firm with a well experienced and dynamic team. Currently our firm consists of 3 Partners with altogether more than 40 years’ experience in tax and legal services in various international firms, and a total number of 15 professionals of which five are dealing with tax and ten with legal services. We handle all types of projects – from relatively simple issues to complex and cross-border long term ventures. What makes our services different is in-depth knowledge of Hungarian business and understanding of both tax and legal aspect of our clients’ needs.

Our professionals offer legal support in many languages, such as Hungarian, German, English, Russian, French, Spanish and Italian. The areas of BWSP Gobert & Partners expertise include but are not limited to corporate and commercial law, tax, real estate, M&A, dispute resolution, labor, finance, data protection as well as restructuring, media, property, litigation, IT&IP, insolvency procedures and energy law. We have in-depth knowledge and understanding of cross-border acquisitions in particular.

Many of our clients already are, or aspire to be international and are demanding the same high level of service wherever they operate, and answering this requirement, the quality of our legal and tax counseling is ensured by the high-level professional qualifications of our colleagues. Our team is constantly developing their competences and is being published by reputable sources. We make sure that our clients receive advice from lawyers who are always experts and often leaders in their field.

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