Flexible employment: this is what all employers want. In the UK there is a storm around the so called “zero hour contracts”, which is considered to be illegal in Hungary, and probably will be more strictly regulated in the UK as well – if not banned.
However it is forbidden in Hungary under the rules of “typical” employment, there is one Hungarian speciality on that field.
The basic theory of employment says that the employer has all the material and immaterial resources needed in order to produce output, but he is lacking the workforce. On the other hand the employee represents the necessary workforce for this. Under this concept the employers’ goal is to gain reward for his investment, and for the risk taken the employees’ get rewarded for the effort put into the process: the workforce.
According to this the employee does not take any risk just offers its workforce, its labour, and should work as much as the employer buys its workforce: the working hours should be included in the contract of employment. The employees’ obligation is to work for those hours the employers’ responsibility is to give work, organizing and supervising the employees and pay wages and salaries. If the hours delivered exceeding the agreed volume written in the contract of employment then overtime bonus should be paid. If employer is unable to give work enough to fill the employees working hours then he should pay standby fee accordingly. Therefore the risk of the quantity of the work should be considered as a risk of the employer, the Hungarian law says that it is prohibited to put or share this risk with the employees.
So if it is prohibited in Hungary to make such a “zero hour contract” under the rules of “regular” employment, how the law offers the flexibility employers need?
While the “standard” employees’ existence depends on the pay they receive for their workforce provided, there is a layer of employees who are not that much depend on their income, who’s first concern is not to find work and who are not want –not able- to work under the strict rules of the “regular” employment: they are the full-time students.
Those who are attending colleges and universities their main duty is to study. They are seeking employment just to earn a little extra money from which they can maintain their lifestyle. What makes this employment flexible is that they need to fit their hours of work to their studies.
The labour code about employing a student in Hungary takes their special needs into consideration, and provides a special solution for them to be employed.
If an employer employs a full time student, there are much flexible working conditions applicable. There is no standby fee if there is not enough work: they can just be sent home, if they are told in advance that it can happen because of clear business reasons. There are no sick pays neither holidays nor annual leaves payable. Neither the employer is obliged to employ them according to the agreed hours written in the contract of employment nor is the employee obliged to work according to the contract. This is a sort of a “pay as you go” for an employer and that solution is considered to be very popular and the most flexible way of employment in Hungary.
The flexibility of working conditions need to be respected in both directions: while the employer is not obliged to offer work, the employee also can say that he is not available for work. This creates a sort of logical issues: an employer just can not tolerate if an employee is just “not available”, the work has to be done anyway, anyhow. For that reason agencies are building up a broaden reserves of available and adequate students.
This is the first indication that for the law in Hungary says this sort of employment must be carried out just through a so called Students’ Cooperative – Special Temping Agency like EU-DIÁKOK which is specialized for the employment of full time students. A Students’ Cooperative is an organisation that is very same like those agencies involved in a temporary staffing business, just providing, organising and sheltering the students’ work. Another indication is that through these Students’ Cooperatives a huge advantage can be achieved: this way the employer should not pay any taxes after the employment. Employing students through a Student’s Cooperative is absolutely tax-free for the employer besides the employee must pay only a standard income tax (16%), nothing else including national insurance or social security or any other deductions.
The third indication of the Students’ Cooperatives is that the students are the most vulnerable employees. They are not very much experienced on the labour market and have very few work experience, therefore they can become a kind of victim of professional working environment. Students can be employed either in unskilled role or in qualified role but under supervision. Through this an employer can find its future employees.
The Student’s Cooperatives are offering professional background for employing their students, they provide support not just on logistic issues of distributing and organizing the workforce required, but on the field of employment law, so they help their customers to employ these students rightfully according to the relevant legislation. The Student’s Cooperatives and their way of operation is a sort of “Hungaricum”.
The students can be employed for almost everything, from simple manual work to the most advanced professional tasks like translating, programming, engineering, office work, sales: the carefully selected students have all the relevant knowledge like a junior colleague in full-time employment.
The EU-DiákOK Iskolaszövetkezet (EU-Students Students’ Union) is a part of EU-Group, a Hungarian owned agency group that offers complex HR solutions: recruitment and selection, temporary staffing of adults, student’s work, international recruitment services, and payroll administration.
Gabor C. Hoffmann MSc
Economist, HR practitioner
Certified employment law advisor
If you would like any further information, please don’t hesitate to contact me.