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Platform Workers are Not Employees, Hungarian Curia Confirms

Platform Workers are Not Employees, Hungarian Curia Confirms

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The legal status of platform workers (e.g. food couriers) is continuously subject to interpretation and often times scrutiny from the authorities. The Hungarian Curia settled the status in its latest decision, at least from a labour law point of view.

Background

Platform work is a form of employment in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems, or to provide specific services in exchange for payment. Currently, the majority of Hungarian (and of EU's) platform workers - including taxi drivers, domestic workers and food delivery drivers - are formally self-employed. Nevertheless, a number of them have to abide by many of the similar rules and restrictions as an employed worker. 

Hungarian latest development

In its latest decision of 13 December 2023, the Hungarian Curia overturned the former second instance decision and established that platform workers – in the given case food couriers – do not fall under the Hungarian labour code since the platform service provider did not have the right to give the wide range of instructions and the right to control the place, time and manner of work, which would have substantiated the existence of subordination (hierarchy) as the primary qualifying feature of the employment relationship as dependent working status.

Based on the specific provisions of the Hungarian Labour Code (Sections 42 and 45), the Curia has taken into consideration that

(1)        General supervision and determination of the manner in which the couriers perform their individual tasks (wearing of branding) and expecting a certain availability and acceptance of the delivery within 75 seconds during the active period do not constitute the wide range of employer's instruction right within the meaning of the Labour Code.

(2)        The platform worker himself allocated the time he wished to carry out his tasks; this was not monitored or challenged by anyone (with some limitations). Hungarian labour law does not recognise a type of employment relationship where the number of hours of employment is exclusively adapted to the needs of the employee.

(3)        The form of remuneration is not of decisive importance for the classification of the legal relationship between the parties (in a long-term agency relationship the agent is also entitled to regular recurring remuneration for the services provided).

Based on the above considerations, the Curia shared the original assessment of the first instance court that the legal status of platform workers should not be reclassified under labour law.

EU legislation

According to the EU, currently, around 28 million people in the EU are estimated to work on platforms and at least 5.5 million persons performing platform work may be wrongly classified as self-employed (known as bogus self-employment) and are missing out on important labour and social protection rights. In order to tackle that and provide clear and transparent rules for platform workers, the EU Parliament and Council have been working together on a bill since 2021 to improve the working conditions of persons performing platform work.

By Balint Zsoldos, Head of Tax, KCG Partners Law Firm

Hungary Knowledge Partner

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