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Adapting to New Trends in the Labor Market

Adapting to New Trends in the Labor Market

Issue 11.3
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The waves of the COVID-19 pandemic, although hitting the population quite hard, served as an impetus for employees seeking refuge in home office.

The home office (telework) regulations, having been dormant for decades of disinterest, saw a skyrocketing popularity, with the legal background being thoroughly revamped and made future-compatible between 2020 to 2022.

Currently (as of 2023-2024), teleworking has become a self-evident topic during job interviews and a regular in-fringe benefit provided to white-collar employees. Also, practical aspects of workplace compliance and conformity, telework cost allowance, liaising and control, and sharing time between home and office have been fine-tuned over the past period.

Said home office, certain automatization trends, and the omnipresent AI supplied a boost for recent experiments of 4-day work weeks, with one flagship of the concept, a telecoms giant, having abandoned the idea early in 2024, citing “eroding” work discipline, much to the surprise of the public. (This will also likely halt any legislative green papers on vernacularizing shortened work weeks). 

Certain industries are experiencing first redundancies owing to given jobs (analysts, researchers, outsourced data processing positions, and the like) being fully automatized (or made redundant by robotization itself).

New work concepts are also dearly needed to attract a fresh workforce: namely those generations who are not necessarily impressed anymore by bean bag sofas and darts boards in the office, which were key selling points in pre-COVID-19 decades in co-working SSC beehives.

Employment rates of certain jobs are extremely high (with the overall jobless rate hovering around as low as 4.5%), manpower shortage is chronic in certain segments (hospitality industry, hotels & leisure, IT, automotive), with the Western world causing a constant brain drain on more mobile (younger and polyglot) employee generations and Hungary is struggling to attract an equivalent number of local and foreign workforce while also making efforts to reasonably control immigration.

In terms of changes to the legal framework, 2023 saw a major revamp of the Labor Code after more than a decade, with EU-based parenting holidays being introduced, and the so-called information bulletin (a compulsory annex to each and every employment agreement) being restructured. 2023 was also the “year of the whistleblowers,” with the appropriate legal background (having existed for years) now being compulsory to employers with a specific headcount and requiring a sizable batch of documents (also triggered by the previous “fad” of the GDPR implementation).

The year 2024 brought regulations on modernized formal requirements on compulsory pre-employment health checks, a simplification of the employer’s certifications to be issued upon job exit, and a full revamp of the immigration laws on the stay and work permits of third-country nationals (with a revamped bill being last-minute ditched, redesigned, and then enacted late in 2013).

This latter development completely halted the operation of the immigration authorities for the first two months of 2024 with the system expected to be up to speed by March (with the decrees specifying procedural rights and obligations still being in the pipeline as of February 29, 2024).

The refurbished legal framework is expected to strike a delicate balance between admitting third-country nationals to workplaces in industries hit hard by manpower shortages and a blend of legal-political considerations owing to Hungary’s geopolitical location.

By Gabor Gondos, Head of Labor, Dentons

This article was originally published in Issue 11.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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