The Hungarian Official Gazette of 14 October 2024 contains significant changes to the law on the recruitment and employment of third-country nationals, which will have a significant impact on private recruitment agencies and employers.
According to the amendment of Government Decree 118/2001 (VI. 30), private employment agencies are not allowed to transfer workers from third countries to Hungary. This means that in the future only nationals of the European Economic Area will be allowed to be recruited to Hungary. This tightening will bring a significant change to the labour market, especially for those who have been placing third-country nationals.
In addition to the above, the additional provisions that will enter into force on 15 October 2024 are aimed at further favouring the employment of Hungarian workers. With the amendment of Government Decree 445/2013 (28.XI.), the application for a work permit shall be rejected if, based on the experience of previous labour mediation procedures, it can be established that the employer has excluded the recruitment of Hungarian workers on the basis of manifestly unfounded conditions or has engaged in bad faith conduct during the mediation procedures, which is intended to unduly favour the employment of third-country nationals.
Similar rules apply to seasonal work permits, according to which an application for a seasonal work permit must be rejected if the employer has been fined or ordered to pay a labour penalty or a labour fine for employing a third-country national without a work permit within one year prior to the application or has been fined or ordered to pay a labour penalty for employing a third-country national without a work permit within one year prior to the application. Under the amended provisions, the application will also be rejected if the employer is in liquidation or compulsory winding-up proceedings or if it is not engaged in economic activity.
Similar new grounds for refusal have also been laid down by the legislator in the case of applications for prior group authorisation. Under the new legislation, an employment authorisation may be removed from the register even if the employer regularly breaches its cooperation obligations. One such infringement is the unjustified refusal to employ qualified Hungarian jobseekers.
According to the Government Office’s position, it may be sufficient grounds for refusing to issue a single permit if the employer has refused to hire Hungarian workers in previous recruitment procedures on the basis of manifestly unfounded grounds. Such bad faith, which aims to give undue preference to third-country nationals, can have serious consequences for businesses. In addition, an application may be rejected even if the employer has been fined for a labour or health and safety offence or sanctioned for employing a third-country national without a permit in the previous year.
Tightening regulations are a major challenge for private employment agencies and employers. The new regulations narrow the pool of workers who can be recruited, as private recruitment of third-country nationals is no longer possible. The preference for employing Hungarian workers may also pose a challenge for employers, especially those who have hired third-country nationals in the past. Stricter control mechanisms, in particular grounds for refusal linked to labour and health and safety fines, may impose increased responsibilities on firms. In light of the new rules, employers and private recruitment agencies need to rethink their recruitment strategies and prepare for the changing requirements of the Hungarian labour market. The tightening of the rules will clearly encourage these operators to recruit primarily Hungarian workers and to focus additionally on European Economic Area nationals