European Trade Union Institute, ETUI.

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Industrial relations in Hungary: background summary

  • Trade union membership in Hungary is around 10% of the workforce on average.
  • Union density is much higher in the public sector and the state owned companies (25%), than in the private sector (5%).
  • There are estimated to be around 400,000-500,000 trade union members in Hungary, according to the data provided by the 2009 Labour Force Survey of the National Statistical Office and the statistics of the National Tax Authority. However, the available national data on trade union membership is unreliable, contradictory and mostly relies on estimation. In 1992, two years after the political changes, the Tax Authority registered 2.7 million trade union members in a labour market of about 4 million workers.
  • Trade union membership declined sharply in the first half of the 1990s, due to political developments and changes in the structure of the economy and workforce. One key development was the collapse, bankruptcy or foreign takeover of huge state owned industrial companies where trade union membership used to be very high. In 1997 the number of members was already as low as 840,000.
  • Since the second half of the 1990s, membership numbers have been slowly decreasing, resulting in a gradual erosion of trade unions. The erosion of trade unions is explained by several factors, including the expansion of small and middle-sized companies in the industry, financial and organisational problems etc.
  • The highest rate of trade union membership is currently in the mining, transport, energy, education and health care sectors.
  • There are five trade union confederations: Trade Union Association of Intellectuals (ÉSZT), Democratic League of Independent Trade Unions (LIGA), Hungarian Trade Union Association (MASZSZ), National Alliance of Workers Councils (MOSZ) and Co-operative Forum of Trade Unions (SZEF). There are over 1000 trade unions.
  • Beyond these national level associations, there are a large number of independent trade unions at workplace level, which play an important role in company-level bargaining.
  • Trade unions in Hungary are organised in a range of ways. There are trade unions organised by sectors, regions, occupations and company sites.
  • Collective bargaining takes place mainly at company level in Hungary.
  • Sectoral-level collective agreements play an unimportant role in regulation, since they have hardly existed in recent practice.
  • Trade unions are the main employee representative channel in Hungarian workplaces. They must be representative for bargaining with the employer at the company level: to be representative, 10% of the employees have to be trade union members.
  • According to the 2012 Labour Code, in lack of a collective agreement and a representative trade union organisation at company level the works council is entitled to conclude a works council agreement (quasi collective agreement) to regulate employment conditions with the exception of wages.
  • Hungarian labour law regulates four institutions of employees’ representation.
  • First, trade unions are autonomous legal entities, typically confrontational organisations of employee representation.
  • Second, works councils assure the participation of employees in management, without a separate organisation or legal personality.
  • Third, representatives of employees on the supervisory board of a company constitute a special form of employees’ participation, but this is only possible if the company has more than 200 employees.
  • Fourth, representation in health and safety matters is a special form of employees’ participation to contribute to work safety.
  • In Hungary, collective agreements are legally binding for all employees of a company falling under the scope of the agreement. Only 23.8% of Hungarian workers are covered by company level collective agreements (MKIR 2009). Furthermore, 2.9% of employees are covered by multi-employer level collective agreements, 5.1% of employees by a collective agreement concluded by an employer association and 8.6% by a collective agreement extended to a sector. Altogether, 33.9% of employees are covered by some kind of collective agreement.
  • There is a generalised and permanent system of works councils in Hungary. A works council cooperates with the employer and is not a legal entity, has no own organisational structure and operates as a special part of the employer’s organisation. Works councils must be elected in all companies, where the number of employees exceeds 50.
  • Prior to 2011 the National Council for Interest representation (OET) was the national forum of representing employers and employees in consultation and negotiation with the government. OET was replaced by the National Economic and Societal Council where NGOs and civil organisations are also represented.
  • In the business sector a new tripartite organisation (Consultative Committee for the Competition Sphere – VKF) had been set up where participation is subject to government invitation.