REPRESENTATION (article 24) - HUNGARY - C111, C122 - 1999

Report of the Committee set up to examine the Representation alleging non-observance by Hungary of the Employment Policy Convention, 1964 (No. 122) and the Discrimination (Employment and Occupation) Convention, 1958 (No. 111), made under article 24 of the ILO Constitution by the National Federation of Workers' Councils (NFWC)

Decision

1. The Governing Body adopted the report of the tripartite committee. Procedure closed.

Complaint Procedure

1. I. Introduction
2. 1. In communications dated 13 May 1997 and 17 June 1997, the National Federation of Workers' Councils (NFWC) submitted a representation to the International Labour Office under article 24 of the ILO Constitution, alleging non- observance by Hungary of the Employment Policy Convention, 1964 (No. 122), and the Discrimination (Employment and Occupation) Convention, 1958 (No. 111)
3. 2. Conventions Nos. 111 and 122 have been ratified by Hungary and are in force for that country.
4. 3. The provisions of the Constitution of the International Labour Organization concerning the submission of representations are as follows:
5. Article 24
6. In the event of any representation being made to the International Labour Office by an industrial association of employers or of workers that any of the Members has failed to secure in any respect the effective observance within its jurisdiction of any Convention to which it is a party, the Governing Body may communicate this representation to the government against which it is made, and may invite that government to make such statement on the subject as it may think fit.
7. Article 25
8. If no statement is received within a reasonable time from the government in question, or if the statement when received is not deemed to be satisfactory by the Governing Body, the latter shall have the right to publish the representation and the statement, if any, made in reply to it.
9. 4. The procedure to be followed for the examination of representations is governed by the Standing Orders as revised by the Governing Body at its 212th (March 1980) Session. In accordance with articles 1 and 2, paragraph 1, of the Standing Orders, the Director-General acknowledged receipt of the representation, informed the Government of Hungary of the representation by letter dated 8 July 1997, and brought the representation before the Officers of the Governing Body.
10. 5. At its 270th Session (November 1997), the Governing Body, upon the recommendation of its Officers, determined that the representation was receivable and set up a committee to examine it. The Committee was composed of Ms. Renata Lemieszewska (Government member, Poland), Ms. Lucia Sasso Mazzufferi (Employer member, Italy), and Mr. Antonio Lettieri (Worker member, Italy). At its 274th Session (March 1999), the Governing Body designated Mr. Richard Falbr (Worker member, Czech Republic) to replace Mr. Lettieri, who had ceased to be a member of the Governing Body.
11. 6. The Committee invited the Government to make a statement on the representation by 16 February 1998. The Government communicated its observations on the representation by letter of 11 February 1998.
12. 7. In accordance with article 4, paragraph 1(a) and (c), of the Standing Orders, the Committee invited the complainant organization to communicate any additional information by 30 January 1998. The complainant organization presented supplementary material on the representation on 30 January 1998. This information was communicated to the Government by letter dated 18 February 1998.
13. 8. The Government was invited to comment on the additional material supplied by the NFWC by 16 March 1998. The Government submitted its observations on the supplementary information on that date.
14. 9. The Committee met in November 1998 and again in March 1999 to examine the information supplied and adopt its report.
15. II. Examination of the representation
16. A. The complainant's allegations
17. 10. In its representation, the NFWC alleges that the Act on the Supplementary Budget of 1995 (Act No. LXXII of 1995) ("Supplementary Budget Act") contravenes the intention and objectives of the Declaration of Philadelphia, both in spirit and in its concrete consequences, and violates both the Employment Policy Convention, 1964 (No. 122), and the Discrimination (Employment and Occupation) Convention, 1958 (No. 111).
18. 11. The NFWC indicates that the Supplementary Budget Act decreased the personnel expenses and the budget contributions to the social security expenses of institutes of higher education by approximately 12 to 18 per cent. According to the NFWC, this measure was taken as part of a number of general austerity measures deemed necessary for the economic stability of the country.
19. 12. The NFWC explains that, prior to the enactment of the Supplementary Budget Act, the Government determined the student/teacher ratio and the extent of staff reduction for institutes of higher education in Decree No. 1023/1995 (II.22), as part of its implementation of austerity measures to promote economic stability. However, the Constitutional Court nullified this Decree in its decision No. 40/1995 (VI.15). The Court ruled that the Decree was unconstitutional, in that it violated the autonomy granted by law to institutions of higher education in selecting their teaching staff, as well as the right of those institutions to use the financial assets and resources allocated to them.
20. 13. The NFWC further states that the Act on the Legal Status of Civil Servants ("Civil Servants Act") was amended, inter alia, to facilitate the implementation of the Supplementary Budget Act. The Civil Servants Act was amended to add the reduction of budget subsidies to the permissible grounds on which civil servants may be discharged (Civil Servants Act, section 30(1)(b)). The NFWC also refers to the amendment on 1 September 1995 of section 34(2) of the Civil Servants Act providing that, in illegal discharge cases, the Court no longer has the right to order reinstatement of the dismissed civil servant where the employer requests that there be no reinstatement and undertakes to pay the former employee double severance pay. The NFWC points out that, prior to this amendment, only the employee had the right to decline reinstatement.
21. 14. According to the NFWC, the civil servant status of 10,399 civil servants, including 2,703 lecturers/researchers, was terminated in 1995 as a result of the implementation of the Supplementary Budget Act. New legal relationships were established in 1995 for 4,827 civil servants, including 1,021 lecturers/researchers. It is unclear from the NFWC report whether the 4,827 civil servants hired in 1995 included any of the 10,399 employees terminated.
22. 15. The NFWC states that, while the Supplementary Budget Act reduced the budget quota of personnel expenses for institutes of higher education, following the decision of the Constitutional Court nullifying Decree No. 1023/1995, there was no concrete legal regulation explicitly directing staff reduction. Nevertheless, according to the NFWC, the institutes of higher education that chose to discharge staff cited either the reduction of personnel expenses under the Supplementary Budget Act or selected the employees to be dismissed from those having the right to retire. The NFWC indicates that the justifications given for the dismissals did not set forth any concrete reasons explaining how or why the Supplementary Budget Act should affect the civil servant status of the employees dismissed.
23. 16. In its letter of 13 May 1997, addressed to the ILO Director-General, the NFWC claims that the 1995 dismissals were illegal and that the stated objective of the Supplementary Budget Act contravened the principles and objectives of the Declaration of Philadelphia. The NFWC also maintains that the dismissals violated the principle of non-discrimination among professions and jobs, the principle of equality between the sexes and the respect of human dignity in employment.
24. 17. With regard to Convention No. 122, the NFWC states that the amendment of the Supplementary Budget Act and the Civil Servants Act negatively affected the right of female workers to employment, thereby violating the intention and provisions of Article 1(2) of the Convention. The NFWC further alleges that the discharge of lecturers and researchers was illegal and violated the human dignity of those civil servants, as there was no proper contextual and individually tailored justification for the dismissals. The NFWC indicates that this was also the opinion of the Parliamentary Commissioner of Citizens' Rights (Ombudsman).
25. 18. The NFWC states that the dismissals in question were facilitated by the broad scope of section 30(b) of the Civil Servants Act, and the amendments to that Act on 1 September 1995. Further, according to the NFWC, the requirement that the justification for dismissal and accompanying proof given by the employer be clear, real and reasonable provides extensive opportunities for interpretation, thus undermining the traditional stability of the civil servant employment relationship. The NFWC points out that, in dismissal cases brought after 1 September 1995, the right of civil servants to employment and economic security is not guaranteed even where the dismissal is found to have been illegal, since the employer can avoid having to reinstate the dismissed employee by tendering a severance payment of double the employee's average monthly wage.
26. 19. The NFWC alleges that the regulation on the Supplementary Budget Act contravenes Article 1, paragraph 2(c), of Convention No. 122 in that the elderly lecturers and researchers who were dismissed as a result of that measure did not have the opportunity to find a new job in their profession. They will therefore be denied the possibility of working, particularly in the profession where they have accumulated skill and experience.
27. 20. In its letter of 13 May 1997, the NFWC maintains that individual legal remedies have provided no protection to the affected employees, in part because many of the dismissed employees, particularly those whose dismissals were justified on the grounds that they were "reaching retirement age", did not avail themselves of the legal remedies within the required time frame. In its subsequent letter of 30 January 1998, the NFWC also indicates that some of the court procedures initiated as a result of the dismissals are still pending. As the dismissed employees must advance legal fees during these proceedings, the NFWC states that a number of the dismissed employees lack the necessary financial resources and have been unable to pursue their claims in the courts.
28. 21. According to the NFWC's letters of 13 May 1997 and 30 January 1998, many of the dismissed employees apparently hoped that the Ministry of Culture and Education would address the matters of the dismissals ex officio, as reports of the Parliamentary Commissioner (Ombudsman) found the legislative measures to be illegal and requested the appropriate ministries to take corrective action; however, this has not occurred. The NFWC also states that the Ombudsman initiated a parliamentary investigation with regard to the female lecturers and researchers dismissed which is still pending.
29. 22. As regards Convention No. 111, the NFWC alleges that the Government has violated Article 1(1)(a) of that Convention, in that the regulations of the Supplementary Budget Act had a disproportionate impact on female lecturers and researchers. The NFWC alleges that the universities justified their dismissals of female lecturers and researchers on the grounds that the employees dismissed had reached retirement age, whereas the female employees in question were in fact dismissed as a result of the budget cuts sustained by the universities. The complainant organization points out that, at the time of the dismissals in question, the retirement age for women was five years less than the corresponding age for men. (Endnote 1)
30. 23. The NFWC alleges that the negative impact on female lecturers and researchers of the legislative measures which are challenged here was compounded by the fact that all-male university "councils" had the authority to make termination decisions. These "councils" frequently terminated female staff even where most of the staff members consisted of (presumably older) men who had reached retirement age. The NFWC indicates that this discriminatory practice was reflected in the reports of the Parliamentary Commissioner (Ombudsman) which it attached to its letter of 17 June 1997. For example in one case the Ombudsman notes that, in the circle of civil servants investigated, the different age requirement for retirement eligibility constitutes a significant distinction between men and women that creates a disadvantageous position for women (in part because it means that, while men and women in higher education finish their schooling at about the same age, the leading female professors have disproportionately less time to teach and do research than their male counterparts). The Ombudsman further notes that the Act on Higher Education determines, without any distinction, 70 years of age as the retirement age for university professors, but that professors can also be dismissed earlier according to the rules of the Act on Civil Servants, thereby still leaving open the possibility of discrimination in the case of female professors.
31. 24. According to the NFWC, the university budget cuts also violated the principle of equality with regard to access to jobs and occupations, on the grounds that the skills of lecturers and researchers are not as easily transferred to other fields as the skills of other civil servants. As a result, the NFWC maintains that the dismissals, in depriving the female lecturers and researchers of their professorship or chair and of their research opportunities, created a particularly disadvantageous situation for them.
32. B. The Government's observations
33. 25. In its letter of 11 February 1998, the Government indicates that the representation submitted by the NFWC challenges that portion of the Supplementary Budget Act which requires that staff-related costs and social security-related central budgetary contributions coming on top of wages in higher educational institutions should be cut by 12 to 18 per cent.
34. 26. The Government explains that, in a previous decree, it specifically identified the measures designed to bring student/lecturer ratios closer to usual European statistics and that the downsizing was ordered in relation to that fact. The Government indicates that this portion of its Decree No. 1023/1995 (III.22) was deemed unconstitutional and nullified by the Hungarian Constitutional Court in its decision No. 40/1995 (VI.15)AB. In its holding, the Constitutional Court referred to the fact that Decree No. 1023/1995 (III.22) and the measures taken by the Government in relation with that Decree conflict with provisions on the self- governance of institutes of higher education, as set forth in Act No. LXXX of 1993 on Higher Education and, thus, with article 35 of the Hungarian Constitution, which provides that the Government shall identify the State's responsibilities in promoting science and culture and ensure the necessary conditions. Accordingly, the Government points out that the first portion of the NFWC representation refers to statutory regulations and measures that have been nullified by the Constitutional Court.
35. 27. The Government explains that section 30(1)(b) of the Civil Servants Act made it possible for public servants to be terminated through "absolution", provided that the employment of the public servant was no longer possible due to a decision of the Government, Parliament, the minister, or the body of self- government representatives affecting the employer. Relying on section 30(1)(b) of the Civil Servants Act and Decree No. 1023/1995(III.22), which was later annulled by decision of the Constitutional Court, individual employers noted in their comments on the absolutions only that they were terminating the public servant's legal relationship through absolution due to budget cuts and on the basis of section 30(1)(b) of the Civil Servants Act. The Government indicates that such absolutions were unfounded since the employer should have indicated the specific reason on the basis of which it may be proven that it was no longer possible to maintain the public servant legal relationship of the employee concerned.
36. 28. The Government indicates that, in order to avoid unnecessary legal disputes, the text of section 30(1)(b) of the Civil Servants Act was amended to provide that "the employer may terminate the public servant's legal relationship through absolution with the restriction provided in paragraphs (3)-(4) in the event that "... (b) due to a decision of the Government, Parliament, the minister, or the body of self-government representatives affecting the employer especially decisions on reorganization required by changes in tasks, or a reduction in central budgetary support the employment of the public servant is no longer possible". The Government indicates that the amendment was primarily designed to assist employers and that the Ministry of Labour has called the attention of employers to the fact that, where absolution is made necessary because of a decision made by an organ outside the employer's organization, the employer must still comply with the formal elements required for validity, without which the absolution remains unfounded and therefore illegal. According to the Government, a number of employees successfully pursued claims in the labour courts as a result of the circumstances outlined above.
37. 29. In its letter of 11 February 1998, the Government indicates that the NFWC's reference to the amendment of section 34(2) of the Civil Servants Act, which sets forth the legal consequences of illegal termination of the public servant employment relationship, as an unfavourable change in legislation for the public servant is not well founded. According to the Government, the amended text in fact serves the interests of the public servant, particularly if one takes into account section 34(3) which, in harmony with the Labour Code, sets forth the various circumstances under which the employer is required to maintain the employment relationship with the civil servant.
38. 30. With regard to Convention No. 111, the Government indicates that the Higher Education Act placed the organizational and procedural regulations of the institutions' councils entirely at the discretion of the internal rules of the institute of higher education, in accordance with the autonomy accorded to those institutions.
39. 31. The Government refers to the NFWC's allegations that the provision in the Supplementary Budget Act harmed female lecturers and researchers disproportionately, through specifying that the retirement age for women is five years below that for men. The employers allegedly referred to the fact that the women terminated had reached retirement age, whereas the terminations were in fact due to the budget cuts. The Government indicates that the rules applicable to the retirement age of women and men have changed, but that "the case for absolution is still legitimate whereby the public servant's legal relationship is terminated with reference to one specific legal provision".
40. 32. In light of the above, in its letter of 11 February 1998, the Government takes the position that the NFWC representation is unjustified and that the Government did not violate Conventions Nos. 111 and 122.
41. 33. In its letter of 16 March 1998, in reply to the additional information submitted by the NFWC, the Government indicates that some labour matters do take a long time to process, despite the "material amendments carried out in the past years with the purpose of accelerating the process". With regard to the NFWC's allegations that many employees have been unable to pursue their claims due to lack of resources, the Government replies that employees may receive information during consulting hours of the courts and that there are many cases where it is not necessary to advance legal fees, particularly in lawsuits where the facts are relatively simple and clear. The Government asserts that, in its opinion, the Hungarian labour procedures system and legal rules governing legal representation follow the European norm and are in conformity with the relevant international treaties.
42. III. The Committee's conclusions
43. 34. This representation involves allegations that two ratified Conventions were violated by the Hungarian Government's actions in enacting legislation reducing the personnel expenses and social security-related expenses of institutes of higher education, resulting in the dismissal of a number of civil servants including lecturers and researchers. The allegations also state that a disproportionate number of female lecturers was dismissed as a result of the new legislation.
44. 35. The Committee notes, first, that the complainant organization alleges that the Act on the Supplementary Budget of 1995 and the amendments to the Civil Servants Act conflict with Convention No. 122. The NFWC explains that the employees terminated as a result of the adoption of this legislation have no possibility of finding new employment corresponding to their qualifications and experience and that they are therefore deprived of any opportunity to exercise their profession. According to the NFWC, such a situation contravenes Article 1, paragraph 2(c), of Convention No. 122, which provides that employment policies must, among other things, aim at ensuring that "there is freedom of choice of employment and the fullest possible opportunity for each worker to qualify for, and to use his skills and endowments in, a job for which he is well suited, irrespective of race, colour, sex, religion, political opinion, national extraction or social origin".
45. 36. The Committee recalls that the Convention requires that ratifying States declare and pursue, as a major goal, an active policy designed to promote full, productive and freely chosen employment (Article 1). In addition, States are required to decide on and keep under review, within the framework of a coordinated economic and social policy, the measures to be adopted for this purpose (Article 2).
46. 37. The Committee notes that the provisions of the Supplementary Budget Act of 1995 required a reduction in personnel expenses in the institutions of higher education, but do not explicitly require this to be carried out through staff reductions. It further notes that the Decree directing staff reductions in higher education was nullified by the Constitutional Court.
47. 38. The Committee notes however that, according to the complainant organization, the restrictions on staff expenses imposed upon institutes of higher education by the Act on the Supplementary Budget resulted in the termination of staff for the sole reason that they were nearing retirement age. The Committee notes that Convention No. 122 sets out in general terms the objectives and method of implementation of the employment policy, but does not include any provision relating to termination, which is referred to in other international labour standards. (Endnote 2) The Committee considers, however, that a systematic practice of forcing employees to retire before having reached the legal retirement age, if it were verified, would tend to contravene the Convention's goal of full, productive and freely chosen employment. The Committee notes that the NFWC does not allege that the Government directed the institutes of higher education to reduce their staff in this manner. The Committee believes, however, that it does not have sufficient information to permit it to make a determination regarding the effect that the situation described could have upon the Government's declaration and pursuance of an employment policy in accordance with Convention No. 122. The Committee would therefore ask that the Government be invited to provide, in its next article 22 report on the application of the Convention, specific information regarding the impact of the budgetary restrictions on staff employed by institutions of higher education and any measures taken or contemplated in this regard.
48. 39. The Committee notes that the complainant organization also alleges that the terminations in question had a disproportionate impact on female lecturers and researchers, discriminating against them in contravention of Article 1(2)(c) of Convention No. 122 as well as Convention No. 111. It further notes the allegation that, when faced with budget cuts, all-male university "councils" frequently chose to terminate the employment of female staff and justified this action on the basis that the women dismissed were eligible for retirement. The Committee notes that, at the time of these dismissals, women became eligible for full old-age pension at 55, whereas the corresponding age for men was 60. (Endnote 3)Moreover, the Committee notes the NFWC's contention that the all-male "councils" dismissed female staff who were eligible for retirement under Act No. 2 of 1975, while retaining older male staff who were eligible for retirement under the same law. Thus the allegations indicate that not only was a discriminatory criterion used with regard to the dismissals, but that it was applied in a discriminatory manner that had a negative impact on the employment of female lecturers and researchers.
49. 40. Convention No. 111 defines discrimination as "any distinction, exclusion or preference made on the basis of ... sex ... which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation" (Article 1(1)(a)). For purposes of the Convention, the terms "employment" and "occupation" include "...access to employment and to particular occupations, and terms and conditions of employment" (Article 1(3)). The Committee recalls that States ratifying Convention No. 111 undertake "to declare and pursue a national policy designed to promote, by methods appropriate to national conditions and practice, equality of opportunity and treatment in respect of employment and occupation, with a view to eliminating any discrimination in respect thereof" (Article 2). Article 3 provides that each Member shall repeal any statutory provisions and modify any administrative instructions or practice which are inconsistent with the policy.
50. 41. The Government indicates in its letter of 11 February 1998 that the nullification by the Hungarian Constitutional Court of Decree No. 1023/1995 restored the autonomy of institutions of higher education and that the Higher Education Act placed the organizational and procedural regulations of the institutions' councils entirely at the discretion of the institutions' internal rules. The information provided by the NFWC indicates that the educational institutions themselves determined to reduce their teaching staff and that, following the Constitutional Court's decision, nothing in the challenged legislative measures in fact directed that the dismissals take place. Thus, the Committee notes that the Government enacted legislation restricting the budgets of institutions of higher education. These institutions apparently responded to the legislation by reducing their personnel expenses, terminating the employment of certain staff members. In response to the budget restrictions, all-male university "councils" are alleged to have applied the distinction in the retirement eligibility age between men and women as a pretext, to dismiss a disproportionately high number of women. The Government does not address the use of the differential retirement age except to indicate that the law has been amended to equalize the retirement age between men and women, and that "absolution is still legitimate whereby the public servant's legal relationship is terminated with reference to one specific legal provision".
51. 42. The Committee notes that the Government relies on the autonomy enjoyed by universities to determine their internal procedures; nevertheless, the Committee would point out that under Convention No. 111 the Government has the responsibility of ensuring that discrimination between men and women in employment does not occur. The fact that the councils are composed of civil servants brings the decisions in question even more squarely within the ambit of government policies and regulation.
52. 43. The Committee considers that the imposition of a different retirement age on women, particularly where this distinction is used to force women into retirement earlier than the compulsory legal retirement age for their profession, would, if such a practice were verified, constitute discriminatory conduct that has a negative impact on women's access to employment and denies them equality of opportunity and treatment in employment and occupation. The Committee notes that neither the complainant organization nor the Government provided relevant data, such as statistics, reports or other information, indicating the numbers and ages of male and female lecturers and researchers dismissed, the positions they held, the dates of the dismissals and corresponding information on the lecturers and researchers retained. The Committee is therefore unable to compare the sexes and ages of these civil servants terminated in 1995 and subsequent years with those retained during the same time period and to determine whether there was a disproportionate impact, systemic or otherwise, of discharges on female lecturers and researchers, while leaving similarly situated male staff in place.
53. 44. The Committee must therefore determine that insufficient information was provided to permit it to reach any definite conclusions regarding whether the Conventions were in fact contravened. The Committee reminds the parties that, for it to be in a position to analyse fully and come to conclusions on any of the allegations made, complete and detailed information regarding the issues raised in the representation should be supplied by both the complainant organization and the Government.
54. IV. The Committee's recommendations
55. 45. The Committee recommends that the Governing Body:
56. (a) approve the present report, and in particular the conclusions contained in paragraphs 34 through 44, on the basis of the information presented to the Committee;
57. (b) invite the Government of Hungary to include detailed information, in its next reports on the application of Conventions Nos. 111 and 122 under article 22 of the ILO Constitution, regarding the following:
58. (i) the employment policy for civil servants employed in institutions of higher education;
59. (ii) the precise impact of the budgetary restrictions on the employment of male and female civil servants employed in institutions of higher education;
60. (iii) any measures taken to ensure that civil servants dismissed from institutions of higher learning on the basis of their eligibility for retirement have access to redress through the judicial process, the status of any claims filed, and the outcome of those claims; and
61. (iv) the findings of the parliamentary investigation initiated by the Ombudsman into the dismissal of female lecturers and researchers, so that the Committee of Experts on the Application of Conventions and Recommendations can continue to examine this matter; and
62. (c) declare closed the procedure initiated as a result of the representation of the NFWC alleging non-observance of the Employment Policy Convention, 1964 (No. 122), and the Discrimination (Employment and Occupation) Convention, 1958 (No. 111).
63. Endnote 1
64. Section 39(1) of Act No. 2 of 1975 set the retirement age for women and men at 55 and 60, respectively. Act No. 8 of 1993 modified the retirement age provisions to set the same retirement age for men and women. Section 11 of Act No. 8 provides that, beginning on 1 January 1995, the retirement age for women will be raised by one year every two years until 1 January 2003, when the retirement age for women reaches 60.
65. Endnote 2
66. In particular the Termination of Employment Convention, 1982 (No. 158), which has not been ratified by Hungary, and Recommendation No. 166.
67. Endnote 3
68. The retirement age for women has since been changed, following the promulgation of Law No. 8 of 1993. See footnote No. 1, supra.