Hungary

In 1992, in the course of the companies’ privatisation process, a law came into force in order to regulate the procedure, namely on how to privatise and how to cope with the process. It appears, later, another law, attached to the previous one, regulating how the workers could have influence in the process. Actually this law still exists (Law 41/92) and that allows to the workers to have shares at the company since they, on a voluntary basis want to take part in the process. It was, even, created a loan to allow the worker, once interested in acquiring shares of the company, to be able to afford it.

The workers thought that by having part of the company they could save the company.

The loan granted to the worker would have to be paid after some time and to have access to this it would be necessary a warranty that the company would be maintained during some years. This system was used whenever workers and company were interested.

Actually this practice no longer exists.

In most of the cases the administrations of the companies bought the shares, from the workers, because the worker was compiled to sell their shares, at nominal price, to the employer.

It still exists another formula that allows the worker to acquire shares. There was a law that regulated the sale of the companies and where it was foreseen that during the sale process the workers could acquire 10 to 15% of the capital of the company. During the privatisation process it was allowed, to the worker, to validate their interests.

For the partner trade union it was essential for the workers to have the possibility to acquired shares, and in fact to do so, because in this way they were included in the process. Even holding just some shares, they were able to intervene in the company’s activity. The trade union supported the process. It had, inclusive, a manual containing the explanation of the whole process besides other support given.

If the worker was dismissed the company would buy the shares at the nominal price.

This is a little bit on the legal background in what concerns the possibility of the workers to financial participate at the company. Later, they altered the privatisation law that contains several rules on the workers' financial participation and rights in order to guaranty the economical welfare of the workers.

In Hungary more than 93% of the companies are private ones and the force of the law is now less once the privatisation process is ended.

There are, however, some cases of companies where the workers can have access to shares.

The workers' concern in maintaining the job was reason and incentive for the interest in having part of the company. However, they verified that the process was not so good.

There is, even, an example where the shares’ selling process didn't mean the maintenance of the company. An engineering company that had more than 1000 workers, and those workers, in 1994, acquired shares of the company and, presently, it only counts with 25 workers. Since the company bought again the remaining workers' shares, the company lives, only, from the sale of the company’s asset once there is no work.

There is another law on the commercial companies in which is foreseen the possibility of a favourable access for the workers to acquire shares.

The question that is putted, actually, is that the companies are not interested that the workers detain shares of the company.

The possibility to acquire shares of a company should not, from the partner trade union’s point of view, be faced as an investment. There is no warranty of that. The involved workers should decide based in other reasons than the investment.

There was, even, a period in which companies and workers were interested in sell and acquire shares, respectively, as way to seek the support of the company. There was, also, the interest of the State in maintaining the sustainability of the companies.

In Hungary it was said the workers that they were the only owners of the companies, but those never felt like this. Even if it was possible to buy shares to their own benefit such feeling did not change. In the opinion of the partner trade union it was just an illusion created by the employers because they that feared that if the workers had shares of the company they could put in risk the performance of the company. This system was a solution to "extinguish the fire."

In the period between 1992 and 1994 (the privatisation period), many companies closed without any legal process of privatisation. Even if the workers had interest in obtaining shares of the company they were not able to do so.

The companies, actually, can increase the capital up to 10% of the value. In that capital increase the workers can participate.

In what concerns to the profit sharing of the company and consequent distribution among the workers, they already had, in Hungary, a scheme of this nature when the companies were well, but that finished already 15 years ago. Such practice was translated into the attribution, to the workers, of the 13th month wage.

At local level, the trade union structures try to conclude collective agreements containing clauses about the profit sharing.

There are, still, retirement funds that can be attributed. Everything depends on the negocial power of the negotiator, which is not always strong due to the weak trade union’s affiliation rate.

Regarding the different plans of the workers' financial participation, the partner trade union adds that they don't have yet a defined idea, even because the share option is quite linked to the privatisation program.

In what concerns the profit sharing it is very dependent of the bargaining power, because it does not exist a law regulating this issue. As all of the companies are different there has not been any intention to regulate the matter by law.

The partner trade union is not against financial participation since such doesn't deteriorate the workers' wages. That is why it is excluded the possibility of freezing wages in exchange for financial participation. The work of the trade union is always orientated to attain better wages. The wage should not be dependent of the existence, or not, of profit on the part of the company. It is from the wage that the workers live, so the commitment of the trade union is to obtain better wages.