Legitimacy without members? Hungary's lessons on trade union representativeness

How can labour law regulate trade union legitimacy as the entry point for collective bargaining when unionisation has fallen to just 7 per cent of workers? Hungarian labour law currently faces this challenge, as trade union membership rates are extremely low.

However, collective bargaining rights shall be granted only for unions that have real support of the workers. Hungary's collective bargaining coverage now stands below 20 per cent and continues to decline, it is already one of the lowest rates in the European Union. Even existing bargaining is confined to company level, where only representative trade unions can enter.

Hungary's experience offers lessons for other countries, particularly in Eastern Europe, where low union density and weak collective bargaining may be linked to flawed legal frameworks, among other constraints.

The problem with low unionisation

Trade union representativeness, the legal threshold unions must meet to bargain, is meant to ensure democratic legitimacy. Hungarian law currently requires unions to organize at least 10 per cent of workers in a workplace to conclude a collective agreement. However, as membership continues falling below this threshold, fewer workplaces have any union entitled to bargain, creating a downward spiral. Coverage has dropped from one third to below one fifth since 2012.

In decentralized systems like Hungary's, where sectoral bargaining is almost non-existent, these representativeness rules are the only gateway to collective bargaining, unlike in Western Europe where sectoral agreements maintain high coverage despite low membership.

The role of the legal framework

Beyond law unionisation rates, there are some provisions in Hungarian law which makes collective bargaining more challenging.

When multiple unions exist in a workplace, current rules require all representative unions to agree, meaning a union with 10 per cent support can block an agreement supported by 80 per cent of workers. Moreover, trade unions that reach the 10 per cent threshold after an agreement was signed by other union(s), can still block further amendments or termination, creating deadlock.

Hungary's experiment allowing works councils, rather than unions, to sign works agreements in non-unionized workplaces has not been effective. Works councils cannot negotiate wages or call strikes, making them ineffective substitutes.

Sectoral bargaining remains virtually absent due to restrictive and inconsistent representativeness rules.

In the public sector, collective bargaining is significantly restricted and entirely banned in healthcare since 2021, despite ILO findings that this violates freedom of association.

The possible ways forward

ILO standards require representativeness rules to be objective and proportionate, but Hungary's provisions create preventable challenges while failing to provide alternative pathways to bargaining. Legal frameworks in low density environments need to offer multiple routes to collective bargaining, not just traditional union membership thresholds. There are some possible reform options, including the authorisation of non-representative unions to bargain with the employer, while the agreement would need ratification from the workers; harmonizing sectoral rules and lifting public sector bans.

Representativeness rules meant to ensure democratic legitimacy are instead accelerating the decline of collective bargaining in Hungary. We suggest that legal reforms alone cannot rebuild union membership, but removing unnecessary challenges is essential to creating space for social dialogue. As policymakers across Europe grapple with how to strengthen collective bargaining, including under the new EU Directive on adequate minimum wages, Hungary's experience offers both a warning and practical lessons on what to avoid and what to reform.

For reference:

• The concept of representativeness at national, international and European level
• Shadow report on the regulation of collective agreements in Hungary
• Convention C098 - Right to Organise and Collective Bargaining Convention, 1949 (No. 98)

• Convention C154 - Collective Bargaining Convention, 1981 (No. 154)