Declared governmental objectives of the 2012 reform

As a consequence of the criticism detailed above, the governmental documents defi ned the following objectives for the new Labour Code:

a) Flexibilization of labour law

Since the government fully agreed with the statement on the fl exibilisation of labour law (point c. above), it became the central pillar and therewith also the main ‘battlefi eld’ of the 2012 labour law reform. This objective is based on the consideration that the current costly labour law provisions constitute the main obstacle for creating new jobs. According to this governmental policy the cutback of employee protection and trade union rights will automatically lead to a higher employment rate.

As fl exibilisation of labour law is undoubtedly the central aim of the reform, the following chapters will primarily discuss the feasibility of this strategy.

The government’s policy paper identifi ed the following measures to ensure more fl exibility for employers: detailed regulation of atypical employment relationships, more fl exible provisions on the unlawful termination of the

employment relationship, as well as the relaxed liability of the employer for damages incurred by the employees.

b) Minimum harmonisation of EU law

In accordance with the aforementioned aim of the fl exibilisation of labour law, the goverment declared the strategy of keeping the harmonisation of labour law Directives at a possible minimum to provide fl exible conditions in the labour market.

c) Approximation of labour law to civil (private) law

The ministerial reasoning of the Labour Code clearly stated that “this Act perceives labour law an integral part of private law”.⁶ The government, however, failed to explain how this relationship should be understood and what its practival implications were. Even the theoretical basis of this statement is unclear. Nevertheless, it served as a successful ideological foundation for fl exibilisation endeavours. Consequently, fl exibilisation of employment law was based on the legal policy argument of approximating labour law to civil (private) law.

d) Increasing the regulatory role of the contractual sources of labour law

The new labour policy intends to signifi cantly enhance the role of contractual sources, collective agreements as well as employment contracts in the regulation of employment relationships. In order to achieve this policy aim, a new hierarchy of labour law sources was introduced: the collective agreement may deviate both in peius and in melius from the dispositive (not cogent) provisions of the Labour Code.

According to the government, this legal technique considerably increases both the freedom and the responsibility of employers and employee representatives, reducing with it the regulatory function of the state. This measure is therefore based on the assumption, that the increased freedom of the parties of collective labour law will automatically double the number and coverage of collective agreements. Meanwhile, a small circle of guarantees remain ius cogent or allow only for in melius derogation.

6 Private law is regulated by the new Civil Code (Act No. 5 of 2013). There have been attempts in 2013 to incorporate the body of labour law in the new Civil Code, however, several academics and labour judges support the formal independence of labour law.

Interestingly, the increased regulatory role of employment contracts is also mentioned with collective agreements, however, the government remained silent as to the reason, theoretical basis or the way to achieve the increased role of employment contracts. This seems odd in light of the fundamentally diff erent legal nature of collective agreements and employment contracts, since individual autonomy and collective autonomy are historically opposed, confl icting notions, and not cohesive concepts.⁷

e) Adjustment of the regulation to the needs of small- and medium sized employers

There has been a general consensus within labour law and employment policy scholarship, that labour law reform must serve the adjustment of the new Labour Code to the fundamentally changed social and economic circumstances (point a. above). The 1992 Labour Code was passed in an economic situation where the labour market was still dominated by large, state owned or newly privatized companies. At the time, the dominant employment model was characterized by a large employer with hundreds of employees. The proliferation of small and micro employers had yet to begin.

By contrast, the present labour market is characterized by employees employed in typical or atypical employment relationships concluded with small-, micro- and medium sized employers. It is therefore a legitimate aim to take into account the changed situation as well as expectations of these smaller employers, companies in the framework of labour law reform. Nevertheless, designing a codex for such diff erent actors is always a diffi cult task, which may be solved by two distinct techniques. Firstly, the general level of protection may be lowered in order to benefi t small employers. This policy, however, has painful side eff ects. Secondly, exceptions and special rules may be introduced in orther to deal with the problem of small enterprises. As will be demonstrated below, the new Labour Code mainly focuses on the fi rst method, since there are only a few minor regulatory changes addressing the problem of small enterprises.

f) Simplifi cation of the Labour Code:

The simplifi cation of legislation (point b. above) had been demanded by a wide range of academics, judges, labour law and human relations practitioners, for the former Labour Code became extremely complicated and diffi cult to apply. This

7 L K , Csilla: Génmanipulált újszülött – Új munkatörvény az autoriter és neoliberális munkajogi rendszerek határán. In: K , Attila (ed.): Az új munka törvénykönyve dilemmái. Budapest, KGRE ÁJK, 2013. 32.

was the result of the changed economic and social environment, the staggering number of amendments (over fi fty), the abrupt harmonisation packages, etc.

Problems related to interpreting the former Code were well refl ected in the published decisions of The Supreme Court. Accordingly, the reform aimed at producing a less complicated, better legal text to serve legal practice, with special emphasis on the chapters on working time and wages, also taking into account the developments in case law.

Several legislative objectives have been identifi ed above, however, it may be useful to categorize them. In our opinion, the ultimate purpose of the reform is to radically raise the employment rate by creating one million new jobs in ten years. This economic goal is meant to be achieved through the labour law policy of fl exibilisation. If we take a close look at the concept of ‘fl exibility’, it is apparent that more fl exibility evidently means less protection for employees, less rights for trade unions and more freedom for employers. Thus, more fl exibility means the approximation of labour law to private (civil, commercial) law, but also the minimum harmonisation of the labour law Directives, the promotion of the regulatory role of the contractual sources of labour law, and last but not least, the fl exibilisation of regulation for small- and medium sized employers.

As such, all ‘other’ objectives (points b.-e. listed above) may be perceived as the methods for creating more fl exibility in the labour market in order to promote the creation of more jobs. The simplifi cation of the legal text of the Labour Code is the odd one out, since this is the sole purely legal, technical, non-ideological objective of the reform.