Current HR Issues in the Hungarian Public Sector

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Current HR issues in the Hungarian public sector

HRWG Meeting

Brussels

27th & 28th April of 2004.

Legal Background

There is no coordinated legal regulation in Hungary concerning the legal status of the employees of the public sector. There are four basic categories regulated by 5 different Acts and several other executive regulations.

-Civil servants (around 108.500 persons working in central, regional and local organisations of public administration and in local authorities)

-Public employees (around 570.000 persons, working in education, health-care or other public institutions)

-In service of the armed forces (around 92.500 persons working in the body of police, fire service, army, border guards etc.)

-Employees of the courts and prosecutor offices (around 11.500 persons)

Different groups of public employees have separate regulation since 1992. (Single Labour Code before). These regulations contain rules relating to the rights and duties of employees, but also touch upon the rules relating to career development, remuneration, training, incompatibility, and declaration of property.

The civil service regulation was amended in 1995, 1996, 1997, but a crucial amendment and a pay-system reform happened in 2001. The secure career path and the salary system based on the amended Civil Service Act gives a positive image of the public service and guaranties stable and attractive carrier opportunities to those who enter the public service. A new tendency and challenges are appearing in terms of quality. New values must follow the traditional ones: improving professionalism, citizen orientation, flexibility, and innovative, creative way of thinking. Training is considered one of the most effective instrument for developing these values.

Main Characteristics of the Civil Service system

The Hungarian Civil Service system follows the theory and the concept of a carrier system but there are some elements of a more open system. (top-level recruitment, professional advisers, political consultants). Any Hungarian citizen who is capable to act, has clean record, and has the necessary qualifications (in central service college or university degree) may become civil servant, but special requirements for determined post are laid down in other regulations. Personnel management is decentralised. The recruitment can be either intern or open, but there are some cases (for example the post of the head of department in central administration) when an open competition must be advertised. The public service starts with the appointment and the acceptance of the appointment for an indefinite period of time. The civil servants have to take their oath.

The law specifies a system of promotions with categories depending on qualification and length of service. Honorary titles for outstanding performance, and professional adviser status can achieve fast stream. In addition public servant can be assigned to executive positions, but the appointment may be revoked with immediate effect and without explanation.The remuneration system is based on the salary scale elaborated by the different categories. The rank-based remuneration could be altered in a +/- 20% degree on the base of the outcome of performance assessment.In addition there are some more benefits for civil servants (for example 13th month’s salary, premiums). Public servants with honorary titles, end in executive positions shall advance to a higher payroll degree.

Some current issues

Ethics:

There is now ethical regulation relating to the public sector as a whole in Hungary. Some occupational groups have Ethical Code, which are the inner rules relating to the moral attitude of the certain occupational groups. According to the Civil Service Act the rules of the Ethical Code for Civil Servants shall be determined and issued by the Council for Conciliating Civil Servants’ Interests with participation of the Government and negotiating teams of the national agencies for representation of employees’ interests of civil servants. The legal nature of the Code will be recommendation it will be adopted as a model-code for the public organizations. The Code exists now as a draft. The following subjects are covered by the Code: essential ethical values and principles, accepting of gifts and favors by civil servant or senior civil servant, dealing with confidential information, display political activity. Moreover the Code contains regulation regarding to the increased requirement relating to the senior civil servants, the ethical committees and ethical procedure.

Performance assessment:

Hungary introduced its performance assessment system after the amendment of the Civil Service Act in 2001. Performance assessment is obligatory for central and regional public administration organisations and for local administrations. The primary aim of its introduction was to improve the performance of civil service personnel and to aid the fullest possible development of their competencies in order to achieve the aims of organisations.

Based on performance assessment models introduced in public administration systems of several OECD countries, the annual personal appraisal system was introduced. The person exercising the employer’s rights—acting in his assessment competence— provides a written assessment of the performance of the civil servant. Performance assessment is conducted on the basis of the performance criteria defined with a view to the job title of the civil servant and the key objectives of the public administration organisation. The written assessment report shall be handed over in the framework of an oral interview.

Further training:

In Hungary there is a further training system of civil servants that operates under central guidance and with central assistance financed from the state budget. The regular and planned nature of further training for public servants is to be secured in line with medium term and annual plans. In general the Minister of the Interior is responsible for co-coordinating and organizing this system. The Hungarian Institute of Public Administration (HIPA) – under the general supervision of the Minister of the Interior – has a distinguished role in the running of this system. It is not only a training center but performs the coordination, consultancy and methodological tasks.

Since 1993 every civil servant entering the civil service has to acquire a basic knowledge of the Hungarian public administration and is obliged to pass a “basic exam”. Civil servants who want to work as counselor have to pass the advanced qualifying examination since 1998. The HIPA and the regional administrative offices organize the training courses preparing for these exams and the examinations themselves. The requirement system, the study material, the exam questions andthe proceedings are unified. On the other hand - on the base of middle-term and annual plans - in the further training system there are so called central training programs for special groups and on special important issues financed by the state budget and in addition there are other “market-based” but qualified (accredited) training courses which can be subsidized by the state. The civil servants are entitled to attend 30 hours of further training in every year. During the last few years the importance of the following trainings is stressed: training programs for executives (mainly manager skills), EU related issues, E-government, quality assessment systems, performance assessment etc.

Hungarian participation in HR Working group:

Hungary would like to know more about the practice of the EU member states and accession countries relating to their legal systems regarding people working in the public sector. Is there a universal code for public sector’s employees? What kinds of differences exist between the legal relationships in the public sector? What kinds of advantages are provided by the public sector’s pension system opposite to the private sector’s pension system? What elements have the performance related payment system and how they go through in practice? The collective work in the working group goes along way to join into the European Administrative Space by the new member states.