What are works councils and collective agreements in Hungary?
A works council (üzemi tanács) is the body employees in Hungary elect to represent them in dealings with the employer, with rights to information, consultation and, in some matters, joint decisions. A collective agreement (kollektív szerződés) is a written agreement between an employer, or an employers’ organisation, and a trade union that sets employment terms. Both are governed by the Labour Code (Act I of 2012).
Need help navigating local labour compliance?
Schedule a strategy callWhen employees elect a works council
Employees elect a works council representative (üzemi megbízott) where the average headcount at the employer, or at an independent site, is over 15 in the six months before the election committee is set up, and a works council where it is over 50. The council is elected for five years, its size grows with headcount from three members to 13, and the employer bears the reasonable costs of its election and work.
What the works council can do
The employer must inform the council every six months about its economic situation, changes in pay, employment and working conditions, and ask for its opinion at least 15 days before deciding on measures and policies that affect a larger group of employees. These include reorganisations, new technology, the handling of employees’ personal data and monitoring tools, health and safety, working schedules, pay principles and, once they reach 5% of the workforce, the employment of non-EU nationals. The employer and the council decide jointly how welfare funds are used.
Where the employer has no collective agreement and no union entitled to sign one, the council can conclude a works agreement (üzemi megállapodás) that covers employment terms other than pay.
Collective agreements
A trade union can conclude a collective agreement if its members at the employer make up at least 10% of the employees, based on average headcount in the six months before the agreement. An employer can have only one collective agreement, and it cannot refuse to negotiate an offer to conclude one. Unless the Labour Code says otherwise, a collective agreement can depart from many of its rules, in some cases even to the employees’ disadvantage, so where one applies it is a key source of employment terms.
Works councils when you hire through an EOR
When you hire through TopSource as your Employer of Record in Hungary, your employees work for the Hungarian legal employer, so they count towards its headcount, and any works council or collective agreement there covers them too. We tell you what applies and run the information and consultation steps for decisions that affect them.
Frequently asked questions
When does a Hungarian employer need a works council?
Employees elect a works council representative when average headcount is over 15, and a works council when it is over 50, at the employer or at an independent site.
Must Hungarian employers consult the works council?
Yes, on measures and policies that affect a larger group of employees. The employer must ask for the council’s opinion at least 15 days before deciding.
Who can sign a collective agreement in Hungary?
An employer or an employers’ organisation, and a trade union whose members make up at least 10% of the employees concerned.
Related terms in Hungary
- Written Employment Information (Hungary)
- Fixed-Term Employment Limits (Hungary)
- Simplified Employment (Hungary)
- Overtime Cap (Hungary)
- Telework and Home Office Rules (Hungary)
- Additional Leave (Hungary)
- Protected Periods and Dismissal Justification (Hungary)
- Termination by Mutual Agreement (Hungary)
- Non-Compete Agreement (Hungary)
- Guest Worker Permit and Single Permit (Hungary)
- Occupational Safety and Medical Aptitude Exam (Hungary)