EHS FINES TO RISE FROM 1st MARCH 2024 IN HUNGARY

21 March 2024

From 1st March 2024, there will be significant changes to the fines that can be imposed for health and safety at work and employment-related violations. To promote the health and lawful employment of workers, the fines for health and safety and employment-related violations will increase. In this article, we outline the range of occupational safety and health and labour law obligations for the breach of which, the employers will face more serious fines.

1. Obligations relating to occupational safety and health (OHS)

The Hungarian Labour Code[1] lays down as a fundamental obligation of the employer to ensure safe and healthy working conditions, and the most important OHS rules are set forth in the Labour Safety Act[2], some of which are presented here as examples.

An important rule is that the employer may not give the employee any cash or other compensation in lieu of meeting the requirements of safe and healthy work.

OHS rules must also be taken into account in the choice of installation, work processes and work equipment.

It is the employer's responsibility to create the material and personal conditions for work. In the former, for example, they must ensure that there is an adequate supply of drinking water and that the workplace is clean and tidy, and in the latter they must ensure that they employ workers to do work that does not endanger their health or the health and safety of others.

The obligation covers the investigation, reporting, recording and prevention of accidents at work and occupational diseases.

2. Breaching the obligations relating to occupational safety and health

In Hungary the OHS Authority is responsible for promoting and monitoring compliance with the rules on occupational safety and health.

The OHS Authority is entitled to take the measures and impose the penalties in order to remedy any shortcomings found during the inspection.

It may impose an OHS penalty on an employer who fails to comply with the requirements for safe and healthy work, thereby seriously endangering the life, physical integrity or health of workers.

Previously, the amount of the fine was also regulated by the Labour Safety Act, but the legislator has removed these rules from the act and from March 2024 they will be regulated in a separate government decree[3].

As of 1^st March 2024, the lower limit of the OHS fine per employee will double to HUF 100.000, while the upper limit will increase tenfold to HUF 100 million.

3. Obligations relating to employment

Employment requirements in Hungary are set out in the Labour Code.

The law[4] defines for example the followings as minimum requirements, which are monitored by the authority:

• the form and mandatory elements of the employment contract;
• rules on the employment of women, young workers and disabled workers;
• rules on working time and rest periods;
• rules on the payment of wages.

4. Breaching the obligations relating to occupational safety and health

The Employment Control Authority's control covers the employer's compliance with the minimum requirements of the legislation governing the employment relationship.

It may, for example, oblige the employer to remedy the breach, shortcoming or failure to comply with the employment obligation or prohibit the continued employment of an offending employee until the infringement has been corrected, for example if the age rules for recruitment or the rules on the admission of third-country nationals have been infringed.

In addition, it can impose discretionary and, in certain cases, lump-sum fines (exceptions include cross-border provision of services).

As of 1^st March 2024, the lower limit of the fine will increase fivefold to HUF 150.000, while the upper limit will be HUF 20 million for medium-sized companies and HUF 25 million for companies with 250 or more employees.

Labour inspections are expected to become more frequent, given the increase in the level of fines. Employers should be prepared for these changes and improve their health and safety and labour systems where necessary to comply with the current legislation.