In the European Union, employees’ secondment, transfer and loaning is governed by Directive EC 96/71, which itself is based on the Treaty of Rome.

The Directive includes the following:

The Directive, which took effect among EU Member States in December 1999, obliges Member States to grant workers entering their territories as part of service provision the same working and pay conditions that apply at the place of work if provisions in the sending country (the usual place of work) are not more favourable. Seconded, transferred and loaned workers will remain under the jurisdiction of their sending countries, i.e. they will remain insured in those countries and entitled to the full range of social services.

The new labour Code of Hungary entered into force on the 1th of July 2012. After a short transitional period, since 1th January 2013, this new legislation should apply to secondment, transfer and loaning.

1. Secondment, transfer (53. §)

“Employers shall be entitled to temporarily reassign their employees to jobs and workplaces other than what is contained in the employment contracts, or to another employer.”

Terminology has changed and the new Labour Code uses only the expression “temporarily reassigned” instead of secondment or transfer.

“The duration of this employment may not exceed a total of forty-four working days or three hundred and fifty-two scheduled hours during a calendar year. The employee affected shall be informed of the expected duration of work in derogation from the employment contract.

In the case of this employment the employee shall be entitled to the wage prescribed for the job in question, or at least to the base wage fixed in the employment contract.”

Derogation is possible with collective agreement without a ceiling related to the duration of this employment. Therefore the interest representation organizations should pay special attention to this question in the course of contracting.

2. Loaning (214. §)

“ ‘temporary agency work’ shall mean when an employee is hired out by a temporary-work agency to a user enterprise for remunerated temporary work, provided there is an employment relationship between the worker and the temporary-work agency (placement);”

“ The duration of assignment may not exceed five years, including any period of extended assignment and reassignment within a period of six months from the time of termination of his/her previous employment, irrespective of whether the assignment was made by the same or by a different temporary-work agency.”

Special provisions are contained in Articles 295 of the Labour Code:

“(1) If a foreign employer employs a worker in the territory of Hungary under agreement with a third party, with the exceptions set out in Subsection (3), Hungarian law shall apply to such employment relationships in terms of:

a) maximum working time and minimum rest periods;

b) minimum duration of annual paid leave;

c) the amount of minimum wages;

d) conditions for temporary agency work as per Sections 214–222;

e) occupational safety;

f) conditions of employment or work by pregnant women or women who have recently

given birth, and of young people; furthermore

g) the principle of equal treatment, including the provisions of a collective agreement

with extended scope as pertaining to the employment relationship in question.

(3) In the application of Paragraph c) of Subsection (1), the concept of minimum wage shall be understood as the remuneration defined in Sections 136–153. Minimum wage shall not include payments made to voluntary mutual insurance funds, and any remuneration provided to the employee that is not subject to personal income tax.”

“As regards employers engaged in construction work that involves the building, remodeling, maintenance, improvement or demolition of buildings, thus particularly excavating, earthwork, actual building work, the assembly and dismantling of prefabricated components, fitting and installations, renovation, restoration, dismantling, demolition, maintenance, upkeep, painting and cleaning work, in terms of the requirements specified in Subsection (1) the workers employed for these activities shall be subject to collective agreements covering the entire industry or an entire sector.”

These provisions need not be applied if the law governing the employment relationship contains more favorable regulations for the employee.