COVID-19: Guidance for employers in Hungary

By Pál Szabó, Zoltan Tarjan, Karim, Laribi

04-2020

Below we answer some key questions to clarify Hungarian employers' legal obligations and support you in protecting your business and people during the COVID-19 pandemic.

What is the current level of restrictions in Hungary?

On 11 March 2020, the Hungarian Government declared “state of emergency” in the territory of Hungary. This meant that during such period (with parliamentary approval) the Government was entitled to take any measures necessary in order to eliminate the consequences of COVID-19. On 18 June 2020, the Hungarian Government withdrew the “state of emergency” and most of the restrictions were lifted. Simultaneously, with the withdrawal of the “state of emergency”, the Hungarian government introduced “epidemiological preparedness”. At the time of writing, there remains a requirement to wear protective masks in retail shops and on public transport, and it is not permitted to organise social events with more than 500 participants. Note that the latter restriction is not applicable for sporting events (in particular, football matches) even if the number of visitors exceeds 500. Further summary on the restrictions is available here (only in Hungarian).

On 15 July 2020, the Governmental Special Operational Body updated its advice on international travel and outlined exemptions for travel to certain countries and territories that no longer pose a high risk for Hungarian travellers. Foreign countries are labelled with three colours: green, yellow and red. Arrival from green countries is not restricted. Countries with yellow code are considered medium risk which means that travellers from such countries must self-quarantine for 14 days unless they can show two negative PCR tests (they can leave quarantine after the first negative test but are obliged to do the second tests). High risk countries are labelled with red which means that only Hungarian citizens are allowed to return from such countries, and they must also self-quarantine for 14 days unless they can show two negative PCR tests (they cannot leave the quarantine before obtaining the second negative test). Special rules apply for duly evidenced business travel, transportation and professional athletes. A full list of exempted destinations can be found here (only in Hungarian).

What are employers' obligations in respect of COVID-19?

Health and Safety

  • Employers have general health and safety obligations relevant to COVID-19 including those under the following legislation:
    Act XCIII of 1993 on Labour Safety; and
  • Act I of 2012 on the Labour Code.

In essence, the main duties require employers to take as much care for employees and others affected by the business as is reasonably practicable.

Guidelines are available for citizens from the Government Information Centre aiming to raise awareness and provide general recommendations e.g. no travel to infected area, stay at home and call GP/green number if symptoms, follow basic hygienic practices, etc.

The Government Special Operational Body also published an “action plan” (only in Hungarian) aimed at identifying and localizing potential infections and ensuring adequate measures be taken.

The  key points of which all employers should be aware in accordance with the guidance of the NAIH (Hungarian DPA) are to:

  1. Specify basic hygienic measures, clean work implements and offices more thoroughly, provide disinfectants and require their more frequent use or regulate the order of receiving clients and use glass partitions at customer service desks.
  2. Develop a so-called pandemic/business continuity action plan (hereinafter: action plan) that should extend to preventive steps to be taken to reduce threats, measures to be taken upon the eventual appearance of the infection, preliminary consideration of the data protection risks of the measures applied, issues of responsibility within the organisation and building efficient and adequate channels of communication facilitating the provision of information to the employees.
  3. As part of the action plan, in terms of the preliminary measures reducing threats, employers should draft and make available to employees a detailed information document concerning the most important issues to be known in relation to COVID-19 (e.g. source of the infection, mode of spreading, period of incubation, symptoms, prevention), and who to contact in the event of any alleged contact with the coronavirus or upon the onset of other conditions specified in the information material.
  4. If needed, reorganise business and business/service trips and events and the possibility of eventually working from outside the workplace must be ensured.
  5. Attention needs to be called with emphasis to the fact that in the event of any alleged contact with COVID-19 and upon the onset of other conditions specified in the information material individuals should report this to the designated person and visit the company doctor or another physician immediately in order to protect their own and their colleagues’ health.

Notwithstanding the guidance relating to COVID-19, employers should ensure that they are taking any necessary steps to protect their employees. All employers have health and safety obligations to keep employees informed about health risks that may arise in carrying out their duties and to ensure that working practices do not create undue risks to employees.

Discrimination

As with day-to-day operation of the business, employers must be mindful not to treat anyone less favourably based on a protected characteristic such as disability, race or ethnicity. 

It has become apparent that the COVID-19 outbreak is having a particular impact on employees with certain protected characteristics, including disabled, chronically sick and older employees. Accordingly, employers must not differentiate the employees based on their protected characteristics when ordering home office or implementing other measures. However, to date we are not aware of any COVID-19 specific guidance from the Hungarian Equal Treatment Authority.

What financial assistance is the Government providing to employers?

One of the Hungarian Government’s main focuses is preserving jobs. Among other measures, the Government introduced “Kurzarbeit”, a legal framework for reduced working time and a related State subsidy scheme. Under this scheme, the Hungarian State undertakes to subsidise 70% of employees’ unpaid salary (min. 25 % but max. 85 % of prior working time, subject to certain conditions) for 3 months capped at monthly HUF 112,418 per employee, provided the employer maintains the employment of the subsidised employee for a certain period. An application for the scheme can be filed with the competent authority until 31 August 2020 for a 3-month period ending on 31 December 2020 at the latest. An overview of the key features of the subsidy is available here.

The Hungarian Government has imposed a moratorium on all loan repayments for individuals and companies until the end of 2020. The interest rate on all new consumer loans is capped at the Central Bank’s base rate plus 5 percent.

Administrative facilitations on companies have been introduced, such as amendments to decision-making rules of companies to ensure an uninterrupted operation during COVID-19 and a prolonged deadline for filing financial statements for closing the previous financial year until 30 September 2020. Also, corporate tax and local taxes are due on 30 September 2020.

Preferential loans are available to companies for investments. The Hungarian Export-Import Bank introduced COVID-19 Compensation Programs, including working capital loans where the interest rate is 0.1 percent for small businesses that apply for it within a year.

HUF 150 million has been provided for the tourism sector from which restauration, construction of hotels, tourist guides and tourist information centres were subsidised mainly in the countryside.

For further information on other Hungarian Government financial support packages, including in respect of the self-employed, see the general governmental portal here

Can employers request or require information from an employee, customer or workplace visitor about potential or actual exposure to the virus?

The question of whether an employer can ask an individual to sign a declaration about where they have been, their exposure to the virus, or be required to provide health information sits firmly in the crossover between data privacy and employment. 

Aside from applicable obligations under employment law, any personal data that an employer processes, including in relation to their location or their health, must also be processed in line with the applicable privacy requirements. Information about an employee's health (such as whether the individual has been diagnosed with the virus or is suffering from any symptoms) is sensitive personal data and additional requirements and obligations will therefore apply to the processing of such data. Despite the GDPR being EU-wide legislation, the position is complex from a European data privacy perspective. We set out below the position in Hungary, but also have available to you our cross-jurisdictional Q&A on important HR data related questions available here. The chart includes guidance on steps employers can or must take when re-opening the workplace (including temperature checks) in respect of employees, visitors and agency workers.

On 20 March 2020, the European Data Protection Board (the European data protection advisory body, formed of representatives of national data protection authorities) (the "EDPB") published a formal statement in relation to COVID-19.  In relation to whether an employer can disclose that an employee is infected with COVID-19 to their colleagues, the EDPB advises that this should be done only where necessary (e.g. in a preventive context) and where national law allows this. In such a case, the concerned employees should be informed in advance and their dignity and integrity should be protected.  EU national data protection authorities have also published local guidance, referred to below and in our cross-jurisdictional Q&A guide available here.

In accordance with the NAIH’s Guidance, processing of personal data in Hungary can be undertaken only if and to the extent that the purpose of data processing cannot be achieved by other means not requiring data processing. The employer should therefore examine whether there are efficient solutions that pose less threat to the privacy of data subjects, such as specifying basic hygienic measures and cleaning workplaces and offices more thoroughly (which both provide efficient solutions without processing of personal data).

Employers should draw the attention of employees to the employer’s general notice, which should require employees to report any potential connection with the virus (e.g. travelling to high risk countries) to the employer. If the employee reports potential connection to the virus or some other suspicion of infection can be established by the employer, the employer can require the employee to complete questionnaires and can then record certain data including the identification data of the employee, the travel destinations and dates (even if the travel has been private) in case of high risk countries and any potential contact with potentially infected persons.

Information about an employee's health status is sensitive personal data and as such additional requirements and obligations apply to the processing of such data. Therefore, the medical history of the employee and medical documentation cannot be lawfully requested. Otherwise necessary health data can be processed based on legitimate interest and an exception under the GDPR.

Requiring medical checks for all employees (to be conducted or supervised by medical professionals) will not ordinarily be in compliance with data protection law. However, employees may be ordered to undergo such checks if (i) they are in positions that are particularly exposed to diseases; and (ii) the employee reports voluntarily; or based on the assessment of all relevant circumstances or the employer’s risk assessment. In this case, the legal basis for the medical check would be a legitimate interest.

Importantly, the position regarding European data privacy rules and their interpretation relating to COVID-19 is developing. Emergency legislation cannot be ruled out, particularly if the situation escalates.  The relevant legislation and practice need to be kept under review as the situation evolves.

For workplaces that are open, what should employers do if an employee is absent or infected?

Infected employees

 In cases involving an existing infection or a suspicion of an infection the employer should be prepared for early involvement and close cooperation with the responsible health authorities. If an employee (or person in their household) has symptoms of COVID-19, the employer must initiate an extraordinary medical check.

There is currently no specific requirement for employers to inform staff representatives (such as works councils) if an employee becomes infected. Nevertheless, works councils have a general right to information on health and safety measures, so it is advisable to inform and involve the works council on any such measures. When doing so employers must be careful to balance the privacy of the individual with the legitimate interest in avoiding the spread of the virus.

If an employee is infected, 70% of the "absence fee" (cca average salary) must be paid by the employer during sick leave (up to 15 working days per calendar year). Afterwards, the state will pay sick pay amounting to 50-60% of average salary.

The employer, however, cannot unilaterally order home working in order to prevent further spread of the virus.

Potentially Infected Employees

 If an employee (or a person in their household) has symptoms of COVID-19, the employer must initiate an extraordinary medical check.

In addition, the employer may allocate annual leave for the employee in which case the employee is entitled to an "absence fee" (cca average salary).

If an employee is quarantined by the authorities (except for border crossing from yellow or red labelled countries), the employee will be entitled to sick pay amounting to 50-60% of average salary. If an employee is under epidemiological surveillance at home, they cannot perform work at their usual workplace, and are not entitled to sick pay. During this period, the employer may allocate annual leave.

Refusals to work or travel

 The employee may be entitled to unpaid leave in certain circumstance (e.g. looking after children because of the closure of the schools) and the parties can also agree on unpaid leave. If the employee is released from work with the approval of the employer, then remuneration based on the parties' agreement must be paid.

Employers should consider their approach to dealing with employees who want to stay at home to avoid being infected.  Employees are under an obligation to perform work and they may not be absent from work on their own initiative due to their fear or abstract risk of an infection. A refusal may indeed be treated as disciplinary matter. However, if the employee’s health is in direct and imminent danger, the employee can lawfully refuse the employer’s instruction.

What are employers' obligations where offices are partially or fully closed?

 In principle, an office closure does not exempt an employer from paying employees their base salary (unless an unavoidable external reason can be referred to – see below for further details). We advise employers to ask employees to work from home wherever possible, however we note that there is no power for an employer to unilaterally order home working. If this agreed home working is not an option, the employer may allocate annual leave for the employee or the parties can agree on unpaid leave.

Since 16 April 2020, the employer and the employee can agree on reduced working time for which the parties can apply for a state subsidy (see above). An overview of the key features of the subsidy is available here.

The reference period (in Hungarian: “munkaidő-keret”) can also be unilaterally ordered or expanded by the employer (for a maximum of 24 months) if permitted by the competent authority to allow flexibility regarding allocation of work during the COVID-19 pandemic and in the months afterwards.

Further, given the current exceptional circumstances, employers may not be obliged to pay the base salary to employees if “unavoidable external reasons” caused the downtime (e.g. if the government issues a decree on mandatory closure of certain or all businesses or plants).

Employers may exercise their right to require employees to take paid holiday at a specific time, provided that they comply with the relevant notice requirements.

Can employers discipline employees during the pandemic?

In Hungary there are no specific rules on the disciplinary actions against the employee during the COVID-19 pandemic, so general rules apply. Collective bargaining agreements (“CBA”) or in the absence of any applicable CBAs at the employer, individual employment agreements can set up sanctions for any breach of obligations arising from the employment relationship. These legal consequences, however, must be proportionate with the gravity of the breach. The sanctions must be set for a fixed period (e.g. if the employee is demoted as a consequence of his/her behaviour) and if these are of financial nature, the maximum amount may only be the base salary of the employee for a month. The sanction shall be imposed in writing with appropriate reasoning. Additionally, the employment relationship cannot be terminated based on a reason for which the employee has already been sanctioned.

Where can employers and employees access local and national advice?

Please find relevant guidance from Hungary here:

  • NAIH Guideline on data processing: click here 
  • Action Plan of the Government Special Operational Body: click here (only in Hungarian)
  • General information on the restrictions: click here (only in Hungarian)
  • Bird & Bird reduced working time subsidy scheme summary: click here 

It is strongly recommended to keep up to date with these recommendations, as they are updated frequently.

Last updated 28 August 2020.