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.