Hungary has a relatively low level of union density– about 17% – and with six competing confederations – MSZOSZ, ASZSZ, SZEF, ESZT, LIGA and MOSZ – trade unionism is fragmented.

Collective bargaining primarily takes place at company/organisational level, despite considerable efforts by both unions and the current government to encourage industry level bargaining. At best only 40% of employees are covered by collective bargaining of any sort.

Workplace representation in Hungary is provided by both local trade unions and elected works councils with the balance between the two varying over time. Currently unions have negotiating and some consultation rights. Works councils have information and consultation rights but in practice often find it difficult to influence company decisions.

Employee representatives make up one third of the members of the supervisory board in companies with more than 200 employees. But new legislation, passed in 2006, allows single tier boards for the first time, and here employee rights are much weaker.

European representatives from Hungary for both European Works Councils and the European Company are chosen by the works council, or central works council, if there is one. Only the appointment of board members to a European Company is different – they are chosen by the SE representative body.

In an undertaking with at least 50 workers, a health and safety committee may be created.

The history of employee financial participation, in form of employee ownership, profit-sharing and cooperatives has a long history in Hungary. The most important of these forms is the employee ownership, which enjoyed much support in the early years of privatization through the Hungarian Employee Share Ownership Programme (ESOP), which is still prevalent today. Despite the support in the early years, the relative weight of this ownership form decreased rapidly in the last years, so that it is rather insignificant nowadays. Profit-sharing schemes, in the context of incentive plans, have been developed only to a certain extent and did not enjoy any special legal support. An exception from this rule is the ‘Approved Employee Securities Benefit Programme’, introduced in the tax legislation in 2003. Cooperatives, a traditional organization form in Hungary, play today an insignificant role in the Hungarian economy.