The Road to Flexibility? Lessons from the New Hungarian Labour Code

Abstract

As a result of a general revision, a new Labour Code entered into force on 1 July 2012 in Hungary. One of the determining objectives of the recent labour law reform was ‘flexibilisation’, and ensuring that regulation by labour law should be kept to a minimum. The new rules increased the contractual freedom of parties, and particularly the role of collective agreements in the regulation of employment relationships. While maintaining the basic structure of Hungarian labour law, the new Labour Code introduced conceptual changes in several key areas, such as the termination of employment relationships, liability for damages and collective rights. These changes were justified by the government on the grounds that the current labour law regulation was too rigid and that did not reflect the private law foundations of this field of law sufficiently. The article puts this statement under critical review and gives an overview of the most important elements of the labour law reform. In particular, after a short introduction we will examine what changes the new Labour Code introduced in the hierarchy of legal sources, and what attempts were made to extend the scope of the Labour Code to other forms of employment. Further, we will analyse to what extent the changes introduced by the new Labour Code modified the balance between the interests of employees and employers. Finally, we will also give an overview of the relationship between the new Labour Code and EU labour law.