Hungary

Support in the labour market

The employment rate of 55-64-year-olds in Hungary is slightly higher than the European average: 65.6%. Older workers are  protected through the provisions of Act I of 2012 of the Labour Code, which provides for obstacles to the dismissal of workers within five years of retirement age. Dismissal is not impossible but must be justified by the behaviour of the employee that makes the employment relationship impossible. Termination by the employer during this period leads to an increase in severance pay.  

When the statutory pension age is reached, there is no obligation to retire. In addition, the pension increases by 0.5% for each additional month of service. This can explain, among other things, an employment rate of 9.4%, which is almost in line with the European average for Hungarians aged 65-74. Other incentives to work beyond the legal retirement age include a reduction in the tax and contribution burden. Thus, only personal income tax (15 per cent) is applied to wages. Another incentive for the employment of pensioners is the pensioners’ cooperatives. They aim to help retired workers who would like to be active in the labour market, to reduce labour shortages and to transfer skills and professional know-how. At the same time, one of the main advantages of being a member of a cooperative is not having to pay social security contributions. It is also the cooperative that is in charge of negotiating with employers interested in hiring retired workers. The initiative is interesting but it seems that it attracts many pensioners who receive a small pension and is therefore more a necessity than a real choice for many of them. 

To ensure a smooth transition between work and pension, the Treasury has set up an online platform that guides workers through the different pension bodies, the methods of paying the pension, the different benefits available and any other administrative steps of interest to the new pensioner.  

Among 55–64-year-olds, the employment rate for women (55.7%) is much lower than for men (76.8%). This may be explained by the programme “Women 40” introduced in 2011. It gives the possibility to women of any age who have at least 40 years of eligibility to retire early with a full pension. The 40 years of eligibility are based both on gainful activity (work) and benefits connected to child raising, recognising the burden on women who are, more often than men, putting their careers on pause to provide informal care. However, it seems that this programme is not financially beneficial. Indeed, it seems that if a woman applies for a preferential pension three years before reaching her age limit, the amount can only increase over the following three years through regular increases in the pension in line with inflation. If, on the other hand, she works until he reaches his age limit, his earnings would generally have risen three times faster in recent years. At the same time, the measure targeting only women is discriminatory, especially as the reasons for the scheme seem to be related to the fact that grandmothers can stay at home to look after the children while younger people can more easily return to work. 

A programme, called HelloIT, is specifically designed to train women in digital skills. One-third of the enrolees are over 40 and 50% of the women enrolled are from rural areas. The programme provides a certificate aiming to support the careers of participants. 

Age discrimination in employment  

Article XV of the Fundamental Law prohibits discrimination, in particular with regard to recruitment, training, working conditions or remuneration. Equal treatment in labour relations is reiterated in the Labour Code of 2012. 

In 2003, Act CXXV established the Equal Treatment Authority (Egyenlő Bánásmód Hatóság), an autonomous and independent administrative body. The Authority examines complaints and statements received in relation to discrimination. It investigates a request from a person who has been harmed.  

Another instrument to prevent age discrimination in the workplace is the European Diversity Charter, which is implemented in Hungary. This can be signed by various organisations, regardless of their size and type, which are dedicated to respecting equal treatment, creating a diverse organisational culture and engaging in continuous development to achieve the objectives of the Charter. 

Workplaces for all ages 

In Hungary, Act XCIII of 1993 on occupational safety and health, and its amendment of 1 January 2008, includes provisions related to stress at work, stressing that employers have a duty to assess and reduce psychosocial risks. 

Act XCIII

Article 54, d): the employer shall take the human factor into account in the design of the workplace, the choice of work equipment and the work process, to reduce the duration or harmful effects of working in unison at a fixed pace, the organisation of working time, the prevention of stress caused by work-related psychosocial risks;   

87 § 1/H. Interpretative provisions: Psychosocial risk: all the effects (conflicts, work organisation, working hours, job insecurity, etc.) which affect the worker at work, and which may affect his or her reaction to these effects, or which may lead to stress, accidents at work or psychosomatic illnesses.    

87 § 1/D. Occupational disease: an acute and chronic impairment of health which occurs in the course of work or occupation, or which appears or develops after the exercise of work or occupation and which   

(a) is due to physical, chemical, biological, psychosocial, or ergonomic pathological factors related to the work, occupation, or work process, or    

(b) is the result of a higher or lower than optimal worker strain.