New Curia Ruling on Rest Periods: Mass Lawsuits and Retroactive Pay on the Horizon?

A recent ruling by Hungary's Curia could signal a wave of lawsuits and substantial overtime compensation claims, potentially impacting millions of workers. According to a March 2023 ruling from the European Court of Justice (ECJ), the daily rest period - a minimum break between shifts - is distinct from the weekly rest period and must be provided beforehand. In practice, this could mean that workers in standard shifts would be entitled to overtime pay for working past 1 p.m. on Fridays, in line with the daily rest period requirements. Employers could face retroactive claims for such overtime dating back several years, with the mandated overtime premium set at an additional 50%.

The distinction between daily and weekly rest periods has been a source of legal debate for years. Hungarian labour law allows a generous 48-hour weekly rest period, exceeding the EU’s minimum 24-hour requirement. However, the ECJ ruling underscores that Hungary’s more extensive weekly rest period does not exempt employers from also providing the standard daily rest period beforehand. This ruling has immediate implications, as it could render past practices non-compliant, raising questions of retroactive financial liability for employers.

Hungary’s response to this issue has been complex. In 2023, the Hungarian Labor Code was modified to attempt to address these issues, stipulating that employers need not assign daily rest if the subsequent day is non-working. However, two recent Curia rulings emphasize that this change does not retroactively cover previous practices. The Curia’s decisions highlight that from a legal perspective, all instances where daily and weekly rest periods "overlap" without proper daily rest given would constitute "extraordinary work" and qualify for compensation. This interpretation is critical, as it could trigger backdated claims covering up to three years, given the statutory limitation period in Hungarian employment law.

These rulings have broad implications, especially for those working in non-standard schedules, including many transportation and healthcare professionals. The rulings clarify that employers who failed to allocate daily rest periods before weekly rest periods were essentially assigning overtime, even if unintentionally. As a result, employers across various sectors may face significant liabilities in the form of compensation owed to workers for extraordinary work.

Employers may now be forced to reassess their scheduling and compensation practices to ensure compliance. Even though Hungary’s Labor Code modification in 2023 sought to address the daily versus weekly rest period issue, questions remain about whether the revised legislation aligns fully with EU labour law requirements. Until resolved, this uncertainty leaves open the possibility of continued legal action from workers seeking compensation for past practices.

For employees, the Curia’s rulings represent a significant step forward in labour rights protection, offering a clear pathway to seek owed compensation for rest period violations. With the statute of limitations covering three years, workers could pursue claims reaching back to 2021, particularly those working in full-time positions where daily and weekly rest periods may have overlapped.