The Applicable Labour Law for Employees of a Hungarian Employer While Working Abroad

The Applicable Labour Law for Employees of a Hungarian Employer While Working Abroad

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A Hungarian company in the field of the construction industry is constantly posting workers to different member states of the European Union. According to the labour agreement of employer and employees the applicable law is Hungarian, however, the mandatory health and safety provisions of the place of work based on the Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services – if these have a stronger protection - must be applied.

The employment of the posted employees takes place within a so-called working timeframe. The employees work 3 weeks abroad while they are posted and stay 1 week at home. During this 1 week staying home period the employees are free and don’t have to perform work, the employer compensates the overtime hours as free time.

During the posting of the employees abroad numerous practical questions arise about the mandatory health and safety provisions of the place of work. Such questions include working time, annual leave, minimum wage, safety at work, etc.

Regarding the working time: while the Hungarian labour law basically allows a daily working time of 12 hours employees posted for instance to Germany may work only 10 hours in a day, so in this case the German mandatory health and safety provisions are stricter and must be mandatory applied.

Concerning the applicable law of annual leave: if it is about the number of leave days the question can be easily answered. For the period of posting is the law applicable which ensures more leave days for the employees. But what is the case if workers want to work instead of taking annual leave, therefore earning money, and having leave compensated?

In that case the rules shall be applied which protect the employees better. In case of the posting of Hungarian employees to Germany the following applies:  

According to the Hungarian regulation leave days shall be granted by the employer and compensation is given only in exceptional cases (termination of the labour relationship for example). 

In contrast of the regulation of the place of work in Germany the claim for leave is allowed by the employer however, the employee shall take the leave whereby the claim for the leave can be lapsed in certain cases (the compensation of the leave is conditionally possible).

And which law ensures a higher protection effect? The reason of the Hungarian regulation with the mandatory granting of the leave enables the relaxing and healthy regeneration of the employees which in our opinion better protects the employees.

By Daniel Feher, Partner, Feher Legal & TaxAlliott Global Alliance