2020. 11. 04.

Business Law I.
Introduction to labour law
Lecture 9.

Dr. Csőke Rita

Department of Management and Business Law

Business law I., BSc – 2020/2021. 1st (autumn) term

1

What shall we talk about in this block?

• About
• The structure of labour law rules;
• The parties of the employment relationship;
• Employment contract and its basic minimum
content;
• Principles of labour law and general rules of
conduct;
• Basic obligations – of both sides;
• Most important rules of cessation and termination
of employment relationships.
Business law I., BSc – 2020/2021. 1st (autumn) term 2

1
 2020. 11. 04.

Work can be carried out in several

different legal relationships…
• In almost uncountably many kind…
• Only for example: in Act No. CXXII. of 2019 on the on
Entitlements to Social Security Benefits and on Funding These
Services (hereinafter: Tbj. tv.)
• In its 6. § section (1) subsection a), only those that under the
scope of Tbj. Tv. should be referred as employment relationship
(though they are actually not) are listed till 25 (!) kind.
• The enlisting follows further from a) till k),
• Section (2) in itself is a listing in about 10 lines,
• And still there is a section (3)…
• Moreover, besides all these, still there are several, since these are
only the relevant ones from social security aspects.

Business law I., BSc – 2020/2021. 1st (autumn) term 3

The structure of labour law rules

several tiny little pyramids
next to the big pyramid

Business law I., BSc – 2020/2021. 1st (autumn) term 4

2
 2020. 11. 04.

The level of legal regulations - laws

• In labour law, there are also legal regulations: laws and
decrees (hereinafter let’s refer to them together as
„legal regulations”)
• Laws regulate
• either a sort of a legal relationship containing
work 2 biggest rule in the civil law sector
• E.g. employment legal relationship, civil
service legal relationship, public service legal
relationship etc.
• Or a certain topic thematically thematic laws
• E.g. occupational health and safety
Business law I., BSc – 2020/2021. 1st (autumn) term 5

Level of legal regulations - laws

• In the centre of labour law is Labour Code (Act No. I. of 2012. on

Labour Code – its official Hungarian abbreviation is: Mt.)
• Labour Code is the „alpha” of labour law. – During the course, we
shall only talk about certain parts of this.
big influence on Labour Code
• The other major legislations about work somehow relate to it.
• Behind Labour Code stands another, even bigger act: Act No. V.
of 2013. on the Civil Code – („Ptk.”) – several rules of Labour
Code refer back to the Civil Code as ones that must be applied in
employment relationships as well.

Business law I., BSc – 2020/2021. 1st (autumn) term 6

3
 2020. 11. 04.

határozat

Level of legal regulations: decrees

• In certain specific topics, laws give authorization for making
decrees on implementing certain parts of the law in details:
• Government decrees
• Ministerial decrees
• The authorization of making decree may arise from
• The Labour Code itself
• e.g. cost reimbursement of cost for travel to work,
mandatory minimum wage etc.)
• Laws regulating other legal relationships
• It’s pretty frequent in the public sector
• Or from the thematic law
végrehajtási rendelet
• E.g. law on occupational safety also has implementing
decree
Business law I., BSc – 2020/2021. 1st (autumn) term 7

Sematic system of labour law legislation

Business law I., BSc – 2020/2021. 1st (autumn) term 8

end of 1-2nd lvls

4
 2020. 11. 04.

Is there anything else beyond legal

regulations?
• In labour law there are rules, which are not legal
regulations, though still behave as if they were.
• These are the followings:
• collective agreements
• These are concluded by the trade union(s) – if such exists at
an employer or at a sector, this represent a regulatory level
above the individual employment contracts
collective
• work agreements labour law
• concluded between the worker’s council and the employer on instruments
cooperation rules
if both parties agree • the binding decisions of the conciliation committee
adopted according to Section 293.
Business law I., BSc – 2020/2021. 1st (autumn) term 9

Thus we introduced an important

definition:
• Employment regulations:
• Legal regulations not only about acts, decrees
• Laws and decrees we mean collective instruments as well

+ as if laws

• The previously discussed „quasi-laws” of collective

labour law
• Collective agreement
• Work agreement
• The binding decisions of the conciliation committee
adopted according to Section 293.
Business law I., BSc – 2020/2021. 1st (autumn) term 10

10

5
 2020. 11. 04.

cogent: must do / don’t —» If you don’t / do : breach of law

dispositive: list of good practices, set of rules, etc. —» you can disagree - e.g. Differ bec other business it better

Is Labour Code cogent or dispositive? A munkaszerződés -

jogszabály eltérő
Labour Code: rendelkezése hiányában
cogent, • 43. § ”(1) Unless otherwise prescribed by law, the employment a Második Részben foglaltaktól,
valamint munkaviszonyra
guarantee the contract may derogate from the provisions of Part Two and from vonatkozó szabálytól
minimum lvl employment regulations to the benefit of the employee. a munkavállaló javára eltérhet.
of Labour Code • (2) Such derogations shall be adjudged by comparative assessment of
Az eltérést az egymással összefüggő
rendelkezések összehasonlításával
in all circumst.
related regulations.” kell elbírálni.
BUT if you can
agree upon • Labour Code is basically unilaterally (for the benefit of the
better for the employee employee) dispositive (relative dispositivity)
• By collective agreement derogation is allowed also for the
disadvantage of the employee.
• But: Labour Code also contains a set of rules from which
derogation if forbidden, even if the parties could agree in it
or would serve the employees’ benefit.
Business law I., BSc – 2020/2021. 1st (autumn) term 11

11

Parties to employment relationship

• Those, who conclude employment agreement with

each other:
• The employer, and 2 acts only
• The employee
• It’s a bipolar legal relationship
• (exception: temporary agency work)

Business law I., BSc – 2020/2021. 1st (autumn) term 12

12

6
 2020. 11. 04.

The parties of employment relationship

(Mt. 32-34. §)

• Employer
• a person having the capacity to perform legal
acts, who employs employees under employment
contract
• Employee
• a natural person who works under an
employment contract

Business law I., BSc – 2020/2021. 1st (autumn) term 13

13 self-employed —» not organization —» haven’t got employee

depends: legal person or not

LLB

Parties to employment relashionship

(Mt. 32-34. §)
• Employer
• May be an organization – if mandated by law with the
capacity to perform legal acts (legal persons) or
• a natural person – a human - (e.g. self-employed
entrepreneurs may also be employers of employees.)
• Employee
• Always a human. e.g. school holidays
• Basically over 16 years old (with exceptions), but
• for several jobs many further conditions apply (e.g.
scholar level, professional qualifications, non criminal
record etc.)

Business law I., BSc – 2020/2021. 1st (autumn) term 14

14

7
 2020. 11. 04.

Attention! Please, do not confuse

definitions!
virtual existence depends: registration
• In case of an organization as employer, the
employer and the person exercising employer’s
rights surely differ!
• Mt. 20. § (1) The person exercising employer’s
rights shall be entitled to make legal statements on
the employer’s behalf.
• (2) The rules for exercising employer’s rights shall
be laid down - within the framework of law - by
the employer.

Business law I., BSc – 2020/2021. 1st (autumn) term 15

15

Commencement of an Employment
Relationship (Mt. 42. §)

• 42. § (1) An employment relationship is deemed

established by entering into an employment contract.
• (2) Under an employment contract:
• a) the employee is required
• to work
• as instructed by the employer;
• b) the employer is required
• to provide work for the employee and
• to pay wages.

Business law I., BSc – 2020/2021. 1st (autumn) term 16

16

8
 2020. 11. 04.

Basic typologies of employment

relationships
• By working time:
• Full time
• 8 hours daily - general principle for full-time daily
employment (exceptionally may differ)
• Part time
• which is less than above
• By duration/term:
• Indefinite duration don’t want to think about what happens
• Fixed-term duration for fixed

Business law I., BSc – 2020/2021. 1st (autumn) term 17

17

Rules of employment relationships

for fixed-term duration (Mt. 192. §)
project, seasonal fruit collecting
• „The period of fixed-term employment shall be determined
• according to the calendar or
• by other appropriate means. e.g. untill colleague returns from maternity
• The date of termination of the employment relationship
may not depend solely on the party’s will, if the
duration of the employment relationship is not determined
no fixed date,
by the calendar. In the latter case the employer is only approximate
required to inform the employee of the expected
duration of employment.”

Business law I., BSc – 2020/2021. 1st (autumn) term 18

18

9
 2020. 11. 04.

Rules of employment relationships

for fixed-term duration(Mt. 192. §) – 2.
• „(2) The duration of a fixed-term employment relationship may not
exceed five years, including the duration of an extended
relationship and that of another fixed-term employment
relationship concluded within six months of the termination of
the previous fixed-term employment relationship.”
• Exception: employments where official authorization is
required
• „(4) A fixed-term employment relationship may be extended, or
another fixed-term employment relationship may be
concluded within six months from the time of termination of the
previous one upon the employer’s legitimate interests. The
agreement may not infringe upon the employee’s legitimate
interest.”
Business law I., BSc – 2020/2021. 1st (autumn) term 19

19

The compulsory minimum content of

employment agreement (Mt. 45. §)

• The parties must specify in the employment contract the

employee’s
• personal base wage and for how much,
what kind of job
• job function.
• Any of these is missing, the consequence is nullity.
• Written format is a must for concluding a valid employment
contract.

Business law I., BSc – 2020/2021. 1st (autumn) term 20

20

10
 2020. 11. 04.

The compulsory minimum content of

employment agreement (Mt. 45. §)
• The duration of the employment relationship
• „The term of the employment relationship shall be defined in
the employment contract. Failing this the employment
relationship is concluded for an indefinite duration.”
• Workplace
• „The workplace of the employee shall be defined in the
employment contract. Failing this, the place where
work is normally carried out shall be considered
the workplace.”
• Working hours
• „In the absence of an agreement to the contrary,
employment relationship is concluded on general principle
for full-time daily employment.”
Business law I., BSc – 2020/2021. 1st (autumn) term 21

21

Probation /trial period (Mt. 45. §)

• „(5) In the employment contract the parties may stipulate a
probationary period of not more than three months from the date
of commencement of the employment relationship. In the event that a
shorter probationary period has been stipulated the parties NOT to additional
3 months —»
may extend the probationary period once. In either case, the duration up to 3 months cannot be
of the probationary period may not exceed three months.” carried out unilaterally
• (Note: 1) collective agreement may stipulate a maximum 6 months probationary
period; 2) probation time rules in the public sector differ from the ones at
employment contracts in the private sector.)
• During probation period, employment contract may be
terminated by either party
• Without notice (i.e.: with immediate effect),
• Without giving reason,
• In writing (!)
Business law I., BSc – 2020/2021. 1st (autumn) term 22

22

11
 2020. 11. 04.

Job function

• Job function is a very basic minimal content of employment

agreement.
• It’s an overall cathegory – a wide circle of duties
• E.g. sous chef, racehorse bender, chorus dancer, clown,
footballer etc.
• This gets in the employment contract – specifying the
function of our employment – but not the exact duties
• Sometimes specific conditions must be applied
• E.g. scholar level of education, specific professional qualification,
non criminal record etc.

Business law I., BSc – 2020/2021. 1st (autumn) term 23

23

Job description

• Job description is not a question of agreement – it’s given in

written form by the employer but it’s only an information
about the duties of the employee within the frame of the job
function.
• Thus employer may change it unilaterally, whithout the
employer’s consent, but within the range of the job
function – it’s still general
• The exact, concrete duties are arising from the instructions of
the employer individually or the employer’s internal regulations
– within the frames of the job description.

Business law I., BSc – 2020/2021. 1st (autumn) term 24

24

12