A new EU directive is being prepared on work-life balance 26 October 2018

The subject of the EU regulation

The European Commission proposes to adopt a new directive to modernize the legal framework for work-life balance. 

The aim of the Proposal is to (i) ensure the implementation of the principle of equality between men and women regarding labour market opportunities and the principle of equal treatment at work; (ii) increase the use of family-related leaves and flexible working conditions by men; and (iii) ensure uniform minimum standards in all Member States.

The Proposal is to extend the existing labour rights already granted by the European Union. However, the Commission does not intend to impose too rigid frameworks on either Member States or employees, therefore the proposed directive sets minimum requirements for the Member States that may adopt stricter provisions. On the other hand, the employees are free to decide whether to use the work-life balance arrangements or not.

Planned main changes

Paternity leave

At present, no EU level regulation provides the opportunity for fathers to use paternity leave when his child is born. The proposal would remedy this deficit by introducing a 10-day paternity leave. This right would be given to every father regardless of his family status.

According to Hungarian law, fathers are entitled to paternity leave, but currently only to 5 (or in the case of twins 7) working days (Article 118 (4) of the Hungarian Labour Code), so the duration of the paternity leave will have to be increased by the Hungarian legislator.

Parental leave

Under the current EU minimum standards, each parent is entitled to a minimum of four months' leave after the birth (adoption) of his/her child. This right is to be strengthened in three ways: (i) This type of leave would not be transferable to the other parent; (ii) the 4-month parental leave would be available to a parent of a child of at least 12 years old; (iii) further it would be possible to use the parental leave in flexible form (e.g. on a part-time basis,  in blocks).

According to the present Hungarian rules, employees are entitled to leave until their child is 3 years old (Article 128 of the Hungarian Labor Code). This limit is well above the 4 months proposed, but the Proposal would also allow for an employee to request parental leave after the child is over 3 years old (up to the age of 12), consequently, some changes of the Hungarian rules will be necessary.

Carers’ leave

The Proposal introduces the carers’ leave as a new type of leave that the employees may use to care for one of their relatives. The Proposal provides a total of 5 working days a year for this purpose.

In Hungary, the carers’ leave is already available up to two years, but this type of leave can only be requested for a long-term care which is expected to exceed 30 days (Article 131 of the Labor Code). Consequently, in harmony with the Proposal, a shorter form of the carers’ leave shall be created in Hungary.

Adequate income

At present, EU rules do not require that any allowance is paid for the above-mentioned family-related leaves. The Proposal, therefore, requires that the person concerned be entitled to remuneration or allowances during these leaves at least equivalent to what the employee would receive in case of sick leave. The Proposal does not specify whether this income should be provided by the employer or the social system.

In Hungary paternity leave already exists in a form of paid absence financed by the employer. During the parental and carers’ leave, the employees are not entitled to any remuneration paid by their employer, but to the relevant social security benefit. The Hungarian legislator shall revise the amount of social benefit whether it is in harmony with the requirement set out in the Proposal.

Flexible working arrangements

The Proposal introduces the remote working option for the parents returning to work above the existing part-time opportunity. However, the Proposal allows the Member States to set reasonable limits on flexible working conditions. (Especially with respect to the fact that the long periods of reduced working hours may lead to lower social security contributions.)

It is also a significant innovation in the draft that flexible working conditions may be requested by the parent of a child up to the age of 12. In Hungary, the part-time option is available for the parents of children up to 3 years. Therefore, the age limit will have to be raised significantly which can put considerable burdens on employers. At the same time, the Proposal would allow an employer to reject this request on reasonable grounds after considering the needs of both the employee and the employer.

Transposition and expected effects of the directive

The Member States must transpose the provisions of the new directive into their domestic law within two years of its adoption.

According to preliminary studies, the directive will have a positive impact on economic performance (GDP, employment and income levels). At the same time, providing these work-life arrangements results in a cost increase for employers, but this rate is expected to remain low, which is mainly because employers may refuse to apply flexible working conditions (part-time work, remote work) for specific reasons.

The fact whether employees will actually use these work-life balance arrangements, or they will not require these options in such a wide range will show how the directive will fulfil the expectations.

The Proposal is available on the following link: https://eur-lex.europa.eu/resource.html?uri=cellar:84205176-2b39-11e7-9412-01aa75ed71a1.0001.02/DOC_1&format=PDF

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