Hungary: Employment vs Engagement In Hungary: 1.0

Last Updated: 25 June 2019
Article by Peter Gritta
Most Read Contributor in Hungary, September 2019

When we talk about work, employment relationship comes to everyone's mind first, although you can work for someone's interest in other ways outside the "9-5", monthly paid job system, for example by an engagement contract.

Whether you are an employer or an employee, you need to know what the differences are between the two most common forms of working, especially because in some cases the employment authority or the court may re-classify the engagement as employment and may impose a significant fine on the principal.

Employment and engagement:

The fundamental difference between the two types of work relationship is that while in the case of an employment relationship the employee's interests are protected by strict rules of labor law, the engagement is a type of contract in the field of civil law, the content of which can be freely determined by the parties.

I guess you have an idea of what a jackpot would be for an employer if they could set the conditions freely: they could dismiss workers without reasoning and severance payments, the staff could work 10-16 hours a day without a problem, not to mention that in case of engagement the social security contributions are much more favorable.

Freedom of contract. Or not?

Before you tell your colleague at the HR that from now on, all the staff will work for the company under engagement contracts, you must know that if the employment authority establishes during an audit that the activity of the person on the assignment carries the characteristics of employment relationship, the engagement will be reclassified as employment, and the employer will have to pay the contribution difference, furthermore, a significant fine will be imposed on him.

Another source of danger is that if the relationship between the parties of the engagement deteriorate, the agent may file a lawsuit in court, that he is likely to win. The court re-qualifies the contract and the employer will have to reimburse the employee the benefits he would have been entitled to.

With this in mind, you need to be able to define when an activity is considered an employment relationship and when it is an engagement. Although a secretary's employment and a freelance photographer's assignment are easy to distinguish, in some cases, the situation is far from simple.

Aspects of the qualification

In the next section, we will examine the demarcation aspects that the authority and the court will follow in the classification of the relationship.

Situations are individually examined considering all the circumstances, so the classification can not be determined by one aspect alone.

Primary considerations:

The nature of the activity:

In the case of employment, the employee continuously performs a certain set of duties. For example, a secretary takes over the mail every day, handles calls, carries out the actual tasks.

The emphasis is on continuity and availability, the conditions of work (place, time, specific tasks) are regulated in detail. By engagement, we mean the provision of a product or service that can be achieved through work. The engagement is rather a "project" type, such as taking a wedding photography and then delivering the pictures as a result. The focus is always on the result to be achieved.

Personal appearance, availability obligation:

You know what the consequences are when an employee is late for work or decides to go home after lunch to take a nap. It would also be interesting if a colleague would send his best friend instead of him, as "replacement". In the case of an engagement, the agent should only pay attention to keep the contract deadline, the elaboration of details is his business (although, for a wedding photographer, it's not a disadvantage to arrive at the event in time.)

Subordinate relation

It is a significant difference that an employee can be instructed in detail by his superiors and it is usually defined what and how to do, while the person working based on an engagement contract is significantly more independent. In the case of an engagement, the agent is not a subordinate, but an equal party, and the instruction determines the result to be achieved, not the methods or the steps of work.

additional aspects:

The place and schedule of work:

It is the characteristics of an employment relationship if the place of work is provided by the employer and the working time is defined, not only by setting daily working hours, but also by weekly and monthly schedule.

Remuneration for work

We have previously emphasized that an important sign of an employment is the continuous availability. Thus, the employee is also entitled to wage when the office is vacated in the middle of the summer "dry season" and hardly has to do anything for a week.

In contrast, in the case of an engagement contract, the remuneration is always rendered to the service provided. Therefore, if the price in the engagement is not rendered solely to the performance provided, the authority is likely to be suspicious.

Using the tools and resources of the employer:

An employee usually only takes his workforce with him in the morning, the other tools and resources are provided by the employer. However, the wedding photographer we mentioned will not give you a professional impression if he asks you to get a camera he can work with.

Based on the above considerations, you can now decide in what cases you can conclude an engagement contract, however, if a number of aspects tip the balance towards the characteristics of an employment relationship, be sure to ask the opinion of a legal expert to avoid the risk of administrative or judicial proceedings and the possible fines.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions