Act on establishing the Office


The Parliament of the Republic of Hungary amended the Employment Act last year, thereby establishing a new middle management agency of the Budapest and County Labour Centres: the Central (or National) Employment Office and the Public Employment Service. Our Office is the centre of the Service. This new agency was built on the basis of the former National Centre for Labour Research and Methodology (previously known as the National Labour Centre). The act on the prevention of unemployment and unemployment provisions was adopted in 1991, after the political changes in Hungary. It was exactly 10 years ago that regional Labour Centres were created, supervising nearly 200 local job centres. The employment service has operated under the supervision of various ministries over the past decade, depending on the government structure of the time. Accordingly, the middle management organisation in charge of operational management has been transformed several times. Therefore, a National Labour Centre was established in 1991, and carried out the traditional middle management tasks in accordance with the directives of the controlling ministry. A radical change occurred in 1996 when the National Labour Centre was terminated and a great part of its responsibilities was transferred to the controlling ministry. So what had been a middle management body transformed into a research/methodology/IT centre without any substantial powers. However, it turned out in a few years that the strategic management required by the Government could not be combined appropriately in the Ministry with the operative responsibilities related to the functioning of the Labour Centres. This is why the need arose to adopt the above act and to establish the new Office with appropriate powers. In conjunction with the Ministry of Economic Affairs, we have already elaborated the division of powers and responsibilities.



Strategic shift in key objectives


When the employment service was established the key tasks were to stabilise the organisation and also to manage unprecedented unemployment levels without conflicts. However, a lot has changed in the past 10 years: the organisation has grown stronger, unemployment has declined, and the number of people in employment has grown perceptibly over the past few years. The economy has leapt onto a fast growth track, and a growing number of areas and companies are now facing a shortage of workforce. We have also found it increasingly hard to satisfy the growing demand for workforce with the supply of registered unemployed people, while motivating the long-term unemployed to work and making them employable have become testing tasks in their own right. The organisation has had to move gradually from distributing benefits, i.e. an administrative authority task, to using active measures to help people find their way back to the primary labour market, as well as to monitoring the efficiency of using public funds and to tracking the movement of funds.

In short, the strategy shift meant that our objectives became to promote employment growth, to make the unemployed employable, and to shorten the time spent without a job.

In order to achieve the above objectives, we have had to increase the role of the Public Employment Service and its participation in the entire labour market turnover, making sure that the workforce supply increasingly meets the requirements of a knowledge-based society in terms of qualifications. Our work must be done in such a way as to satisfy not only domestic demand but also the requirements posed by the approaching EU accession. We also fulfil our tasks according to the four pillars set out in the EU’s annual Employment Policy Guidelines. Of these pillars, most of the work is required by the pillar called Employability Improvement. In order to enhance employment we must handle the unemployed and inactive population in a special way, since we also need jobs geared to their skills. Obviously, we also have tasks related to the implementation of other EU requirements (pillars), above all supporting entrepreneurs and ensuring equal opportunities for women.

We aim to expand our client base this year amidst a declining number of registered unemployed. We put a lot of emphasis on liaising with companies, identifying new vacancies, and on placing those already employed in better jobs. We endeavour to establish cooperation with the growing number of private placement and recruitment agencies. We cooperate with NGOs and foundations established for purposes of promoting employment. These organisations, by nature, may help the disadvantaged unemployed to find their way back to the labour market more effectively and more economically than the public employment service. This obviously does not mitigate our responsibility. We keep track of the disadvantaged people’s fate and the employment service helps them whenever necessary.

Concerning spending under the Labour Market Fund, the role of passive measures keeps decreasing year after year, and this process is accompanied by a consequent rise in active measures that help people re-enter the labour market. We intend to reinforce this process and make the scope of complex labour market programmes general as opposed to a focus on funding individual measures.



Taking the EU requirements into account


Based on preliminary discussions, our country is expected to become a full member of the EU in 2004. Therefore, we increasingly define our tasks in keeping with the guidelines around the four pillars approved by the EU. We are also mindful of the fact the European Commission highlighted the modernisation of public employment services in a dedicated communiqué in 1998. We are preparing for the absorption of the European Social Fund. Since this is only possible after our accession, we are developing pilot projects under the Phare programmes in the first place to help these preparations. Labour market retraining with a practical focus on employability improvement, and placement in jobs afterwards will play important roles in the actions planned under the projects. These projects are being implemented in the 2001-2003 timeframe in three regions of the country, including Northern Hungary, the Northern Plain and the Southern Plain. The competent Labour Centres are involved in the implementation process. The role of the Central Employment Office is to implement coordination and to disseminate good practice.



CV: Róbert Komáromi, Director General



Structure of Organisation

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