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• Non-competition agreement

  20-28

  Alex Ember

  Views:

  228

  The “agreement on non-competition” is essentially the extension of the protection of the basic economic interest of the employer. While during the employment relationship several labor law provisions protect the interest of both parties, the “agreement on non-competition” is designed to protect the employer’s interests after the termination of the relationship. This means – in return for financial compensation – the former employee needs to refrain from any kind of business competition against his/her former employer. This necessarily involves financial compensation and may have several restrictions, such business or geographical area or time.

   

  The previous Labor Code did not specify for detailed regulation of the issue and the law remained rather vague. It merely referred to the fact that parties – based on their own free will – may enter into such agreement. However the new Labor Code contains explicit regulations under title XVIII of the Act as “Particular Agreements Related to Employment”.

   

  The “agreement on non-competition” belongs to the field of employment law. Unlike the previous Labor Code that categorized this possible agreement as of purely civil law in nature, the new Labor Code declares it to belong under the scope of the Labor Code. The previous regulation even ordered the provisions of the Civil Code to be applied to such agreements however the new legislation brought a conceptual change.

   

  The currently effective regulation provides for a 2-year limitation on such conduct on the employee’s part that would create competition with the employer. The exact amount of the consideration payable for this obligation remains to be decided by the parties however the Labor Code suggests that it shall be based on how difficult the applied restrictions make it for the employee to find another job with his qualifications and experience. As a basic limit the law provides that the amount shall not be less than one-third of the base wage payable for the same period of time.

   

  The “agreement on non-competition” is not to be confused with similar legal institutions. The paper points out two close similarities in the legal system. One being the employee’s obligation of confidentiality; this prevails after termination of the employment relationship as well without any time or similar restrictions and even without any financial compensation. The other one is the so called “non-compete” agreement from the field of competition law. This is applicable after takeovers where the seller shall refrain from engaging into business in the same area as the buyer.

   

  In the field of labor law the time period for the “agreement on non-competition” is up to the agreement of the parties however the new law invokes an upper limit of two years that is following the termination of the employment relationship. This is a decrease from the previous regulation that provided for a period of three years. The agreement can be modified by the consent of both parties just like the employment contract or civil law agreements.

   

  In case of violation of the agreement three cases are to be analyzed. The first is the case of the employee breaching the provisions of the contract. In this case the employee is liable for damages towards his/her former employer. The provisions of the new Civil Code and those of the Labor Code are to be applied to the damages. In the second case the employer may request an injunction to prohibit the employee from any conduct breaching the agreement while the third case involves the breach of the agreement on the employee’s part for which the rules of the Civil Code and the Labor Code are to be applied as well.

• Unilateral determination of working time in the effective regulations of labor law

  63-80

  Szabó Mercédesz

  Views:

  236

  In most cases, law does not differentiate between various people in equal-level positions of a contract; during sales, the State has the same rights and obligations as the contracting private person.  Labor law is a specific field of law where one of the parties that are theoretically on equal level – i.e. the employee – is actually in a somewhat subordinated and obviously more exposed position. In the light of the foregoing, it is especially notable that there are some fields of labor right where the third way applies; parties are not equally positioned in terms of power; however, it is not the employee who gets legal assistance for the equality of opportunities, but the law itself supports their disadvantaged position.  Such situation is called the legal situation of unilateral power, and we aim to study to what extent it is present in Hungarian labor law and how advantageous or disadvantageous this it to the parties.  The field of law where one is likely to detect the traces of unilateral power is the legal regulation related to working time, which, therefore, is the subject of this study, and the definition of working time will hereinafter be looked into from the aspect of the employer’s unilateral right to establish employment. Unilateral power is basically not typical to be enforced in labor law, and therefore, working time-related regulations – that belong to the employer’s own discretion – form an exception in such respect. At the same time, the option of flexible work order provides an exception from the superiority of unilateral power, and therefore it is actually an exception to the exception. Such complex system, however, provides the option to make sure whether the enforcement of unilateral power is constructive in labor law, or it would be more reasonable to apply a more balanced system such as the principle of the employer’s ultima ratio as suggested by Guy Davidov. While noting that according to those described above, flexible work order poses some potential risks, too, in our opinion, it would be more efficient and social to set up a consensus-based system, which would also allow us to satisfy our obligation of European Union legal harmonization. Hungarian legislation, and labor law legislation in particular has numerous tasks to do in order to promote the solution of socio-economic problems, as well as to fulfill our obligations related to legal harmonization; in our opinion, the conclusions above confirm that making working time regulations more liberal is one of the major tasks of legislation.

• Theoretical issues of equal treatment in relation to the legal classification of labour law

  57-79

  István Herdon

  Dóra Takács

  Views:

  162

  There are many national and international academic debates on the classification of labour law. On the one hand, labour law can be categorised as private law when we consider the establishment of employment relationships. The legal basis for an employment relationship is exclusively the employment contract, thus labour law belongs to classical private law. On the other hand, the content of the employment relationship can be determined not only by the employment contract, but also by a number of other rules. These norms typically have public law content and, as so-called public law elements of labour law, seek to limit the contractual freedom of the parties. The existence of public law elements is typically justified by the legislator on the grounds that there is subordination between the parties in the employment relationship, so that the contractual balance of rights, which is characteristic of private law, is shifted in favour of the employer. The presence of elements of public law, and in particular the requirement of equal treatment, is intended to redress this imbalance in employment law by limiting the contractual freedom between the parties. In the present article, we examine in particular whether the presence of public law elements gives labour law a specificity of its own. In addition, focusing on the principle of equal treatment, we examine how the prohibition of discrimination in labour law and classical private law can be interpreted and whether this general behavioural requirement is capable of redressing the balance that has been shifted between the parties. Finally, we ask the rhetorical question: if the requirement of equal treatment is capable of redressing the balance, why is there a need for additional public law elements in labour law?