SATISFYING LABOUR DEMAND THROUGH MIGRATION IN HUNGARY

Transcription

1 SATISFYING LABOUR DEMAND THROUGH MIGRATION IN HUNGARY June 2010

2 CONTENT EXECUTIVE SUMMARY...3 I. INTRODUCTION: PURPOSE AND METHODOLOGY Methodology Definitions... 7 II. APPROACH TO ECONOMIC MIGRATION POLICY IN HUNGARY National Vision and Policy The effects of the economic crisis on the Hungarian labour market Governmental responds to the economic downturn Legislative and institutional framework Political debate and involvement of stakeholders III. APPROACH TO IMPLEMENTING ECONOMIC MIGRATION POLICY Implementation of economic migration policy / legislation Statistics and Trends Statistics on the labour market and migration Analysis of trends and relevant developments Recruitment difficulties, lasting manpower shortage on the Hungarian labour market Undeclared work...38 IV. CO-OPERATION WITH THIRD COUNTRIES FOR ECONOMIC MIGRATION...41 V. ANALYSIS AND CONCLUSIONS...43 BIBLIOGRAPHY...44 ANNEXES...46 and is financially supported by the European Commission 2

3 EXECUTIVE SUMMARY The purpose of this study is to provide an overview on the strategies for addressing labour market needs and shortages with respect to the developments concerning the regulation of admission of third-country nationals who would like to undertake employment in Hungary. The aim of this paper is also to analyse the impact of the recent economic and financial crisis on the labour market and to examine the role of immigrants in satisfying labour demand. For understanding economic migration the study will provide an explanation for the different categories of migrant workers, however, it will focus only on the employment of third-country nationals which category excludes the citizens of the European Economic Area and their family members. In this section, statistical data will also be provided in order to show the volume of migration, as well as the employment and unemployment rates, also the tools of migration management. In addition, the report will review the political and legislative background concerning legal especially economic migration, including the influence European legislation had on Hungary's labour and migration policy. This survey reviews the situation as regards labour migration in Hungary. It describes not only the main trends in migration, the formal economy and legal work, but also gives a short summary on illegal employment of third-country nationals with special regard to measures combating this phenomenon. Based on various information sources, the objective of the study is to improve understanding of the specific features and principal characteristics of migrant employment within the general context of the Hungarian labour market. According to the relevant documents the Hungarian labour market is characterised by low participation rate and labour market activity. In parallel with these facts, unemployment is still moderate, remains below the EU average. The and is financially supported by the European Commission 3

4 reason for the small market participation might have its root in low retirement age, low salary compared to other Member States, the poor health condition of the population and the relatively broad access to income replacement benefits by those who lost their jobs or were threatened by unemployment. The conclusion which can be drawn from it is that there is a considerable reserve of native labour force, which should be able to meet the demands of the labour market. Not only the afore-named causes lead to low participation rate, but territorial differences of the supply and demand of labour also contribute to low employment. The Hungarian labour market is highly segmented; there are relatively well-developed and urbanized areas with high employment levels, and micro-regions with low employment rates and high unemployment. Figure 1. Third-country migrants in Europe and is financially supported by the European Commission 4

5 Source: Employment in Europe 2008, European Commission; based on OECD (2006), UN (2006), EU Labour Force Survey ad hoc modules (2005) and national statistics. As regards the characteristics of immigration in Hungary, we can conclude that the number and proportion of immigrants is low, it only constitutes approximately 2% of the whole population. The reason of this lies in the fact that Hungary is a small country and is not a main destination country for immigrants, but rather a typical transit country along the migration routes towards the western countries of the European Union. Immigrants mainly come from neighbouring countries and most of them are ethnic Hungarians speaking Hungarian fluently. For the reason outlined above, immigration has not developed into a serious issue for the social cohesion and economic development of Hungary, as it did in some Member States. Due to the composition of residing immigrants, Hungary still lacks both a comprehensive migration and integration strategy. Even though the big conception is missing, there are more and more expert opinions about certain aspects of the national migration policy and in spite of the fragmented picture the main problem fields have been formed. The question remains when these fragments are expected to be compiled into a clear migration strategy that can form the basis of a concious migration policy in the near future. and is financially supported by the European Commission 5

6 I. INTRODUCTION: PURPOSE AND METHODOLOGY FOLLOWED 1.1 Methodology The present study is based on a comprehensive inquiry conducted in April-June 2010 and draws its conclusions from the following main sources: Research work: analysis of national legislation concerning migration and employment, other relevant legal sources, reports and other documents produced by institutions of the European Union and Organisation for Economic Cooperation and Development (OECD), statistics, position papers and recent studies. While preparing this study the two main stakeholders of labour migration related measures, colleagues of the Ministry of Justice and Law Enforcement (MoJLE) and the Ministry for Social Affairs and Labour were very helpful, they have provided information in the form of presentations, and were also open to questions which helped me to get a precise picture on the Hungarian labour market. With reference to the practical difficulties and problems coming up day by day, also the diverse interpretation of the relevant acts the subordinated offices and services of the above-mentioned ministries (e.g. the Hungarian Labour Inspectorate, Public Employment Service (PES), Office of Immigration and Nationality (OIN) were ready to share their experiences in this field. To get an indeed exploring overview on the national labour market and on the situation of the migrant workers coming to the Hungarian Republic numerous reports and presentations were used by preparing this study. However detailed and is financially supported by the European Commission 6

7 references to a concrete source are only specified when relevant throughout the entire report. Other sources are listed in the bibliography part of this work. All stakeholders were cooperative and all relevant statistics were accessible upon request. Regarding statistics in accordance with the specification given the author did encounter some notable difficulties during the research process. These problems were owed to the fact, that the updated version of the occupation classification structure ISCO-08 has not yet been introduced in Hungary. As many countries so does Hungary maintain a national occupational classification (FEOR-93) that is more detailed and might have a slightly different logic of classification than ISCO. However, in its basic principles and structure the Hungarian national classification on the whole follows the current version of the International Standard Classification of Occupations, ISCO Definitions Since the results drawn from a survey are dependent on the concepts and definitions used when collecting and analysing the data, it is important to consider carefully both the content of each categories of workers, and how it is measured. In such surveys like these, statisticians and researchers aim at comparability between statistics of different countries. One way to approach comparability is to use internationally agreed standards. Lately the ISCO-88 classification has become the most widely used occupational classification standard in international comparisons. In addition to vocational qualifications, it is common to use education levels as a classification of workers. A third common way to differentiate workers is to use pay levels, since as an example low skills and low pay are often related. and is financially supported by the European Commission 7

8 The report is based mainly on definitions pursuant to the ISCO-88 classification; however, where the study refers to national categories diverging from the ISCO- 88 the author will provide a clear description of the definitions used. That can be already told in advance, that generally the national categories take the educational level of employees into account leaving extensive experience out of consideration. To better understand how skilled workers are divided into groups, see Figure 2. Figure 2. The education system in Hungary Source: National Institute for Public Education, Hungary A. matriculation exam (school-leaving exam) B. matriculation exam and vocational qualification and is financially supported by the European Commission 8

9 C. technician's certificate D. skilled worker's qualification E. lower level vocational qualification given by special short vocational school The regular public education system in Hungary is composed of the general (or basic) school, the general secondary school, the vocational secondary school and the vocational school. There also are some special short-term vocational schools which are schools for disabled children, but also for healthy but disadvantaged pupils, who are not admitted to other secondary schools. In general, so in Hungary, migrants are perceived as highly skilled when they have at least tertiary education, however, other definitions used by other countries are possible, notably on the basis of the nature of the occupation in which they are employed. One practical way of defining highly skilled migrants that has been used in some countries is by means of wages paid, with the highly skilled consisting of persons earning above a threshold value. According to the OECD report 1 there are two principal ways of recruiting highly skilled workers from abroad. One is demand-driven, through employer requests. The other is supply-driven and involves inviting candidates to apply and selecting them on the basis of certain characteristics, among them age, educational attainment, language proficiency and occupation, for which points are assigned. Hungary belongs to the first group. In conformity with the ISCO-88 classification skilled workers is a relatively broad term which in case of Hungary focuses in the first place on education, taking no notice of acquired special skills. Skilled workers must have finished one of the following schools as vocational school, vocational secondary school, technical college or secondary school. 1 Managing Highly-Skilled Labour Migration: A Comparative Analysis Of Migration Policies And Challenges in OECD Countries (March 2009). [Available at: ( )] and is financially supported by the European Commission 9

10 Using the ISCO-88 classification, low-skilled workers are often defined as workers who have basic educational levels as they completed 8 grades of elementary school or less. With regard to the researchers, in Hungary the transposition of Researcher Directive 2005/71/EC was already in 2007 completed. On the one hand, the rules have been transposed into national legislation by Act II of 2007 on the admission and right of residence of third-country nationals. The act entered into force on the 1 st of July 2007 and includes specific provisions with regard to third-country nationals entry and residence for the purpose of research. On the other hand, the Government Decree 181/2007 (VII.6.) regulates the approval of research organizations that want to host third-country national researchers and lays down the rules of the hosting agreements. In spite of the adequate regulations, the Public Employment Service could only provide statistics in this field where researchers are also included in the highly skilled category. There is no such an overlap concerning seasonal workers statistics even if seasonal workers have different skills. and is financially supported by the European Commission 10

11 II. APPROACH TO ECONOMIC MIGRATION POLICY IN HUNGARY 2.1 National Vision and Policy Under the auspices of the Ministry of Social Affairs and Labour or the MoJLE there is no specific programme for labour migration in Hungary. However, there are some cases determined by the relevant legislation when no work permit is required for third-country nationals 2 or when the work permit procedure is facilitated 3. As regards students, researchers and family members, the relevant EU legislation was transposed into national legislation, and the directive on the conditions of entry and stay for highly skilled third-country nationals is also transposed in due time. Hungary does not have a national strategy on labour migration, however, the Strategy of Hungary in the area of freedom, security and justice for the period contains some general provisions on labour migration. Regarding migration strategy, it has to be underlined that in Hungary contrary to other Member States there is no major political and social demand for having an integration strategy, not even a migration strategy, since as it was written before the number of foreigners is not as large as in most of the other European countries. Nevertheless, it appears to be essential to develop a comprehensive migration and integration policy that takes into account the labour market and other needs of the country and defines the number and 2 For example - for the chief executives and supervisory board members of business associations with foreign participation or - for foreign nationals engaged in activities in Hungarian-registered churches or their institutes (if such persons are committed to providing church services as a career) no work permit is required. 3 For example the key personnel. and is financially supported by the European Commission 11

12 composition of the migrants needed. The first step to draw up a migration and integration policy is to have a more reliable picture of third-country nationals staying legally in the country. The current situation shows that there is a shortage of information about third-country nationals staying legally in the country, with particular emphasis to their geographical distribution in the county, their educational and professional background and skills, as well as the reasons that brought them to Hungary. Further research should be undertaken and the statistical systems should be further improved. As regards shaping and planning Hungary s migration policy for the future, our Migration Strategy hopefully will be soon under elaboration, tending to give proper answers to the challenges stemming from the complex phenomenon of migration. The strategy is aimed at laying down steps to be taken concerning entry, reception, integration and return of migrants. Hungary needs the positive effects of international migration so as to combat the unfavourable tendency of demographic decline by managing migration The effects of the economic crisis on the Hungarian labour market Since the autumn of 2008 it has been no question that the global financial crisis has turned into a severe economic downturn throughout the EU and the current outlook remains negative. It was to be expected that by the autumn of 2009 the EU jobless figure would exceed 20 million, nearly 4 million more than only 18 months before, when EU unemployment had been at a historic low level. Vulnerable groups such as those on precarious contracts, the young and disabled individuals are particularly affected, however, this current recession has been also impacting on migrant groups of workers who were about to settle abroad with the expectation of taking up work. The crisis hit Hungary in a bad shape, and as a result of this in difficulty to respond, with only a limited set of measures that could be used against it. In and is financially supported by the European Commission 12

13 2008 Hungary had one of the lowest employment rates within the EU (56,7% among the year olds) and was in a local recession (GDP growth down at - 2.2% from around 1% in 2007 as a result of austerity measures). Hungary generated 82.1 % of its GDP through export in The country has developed its infrastructure at the expense of external debt (almost doubled since 2004, 61% of GDP in 2007, up at around 77% in 2009), and was indebted in foreign currency (Euro), households, firms and the state alike. 4 However, the relatively rapid reaction of the Government contributed towards the mitigation of the impact of the crisis on employment. In the beginning of 2009 a series of measures were launched to support the preservation of jobs and to prevent redundancies. This set of measures include, as in many other EU Member States, support for the introduction of short-time working arrangements combined with training opportunities for workers. The new measures aim to enhance the functioning of the labour market. The objectives of the Government s long-term employment strategy are to increase participation rates and prevent inflow into long-term inacitvity, to support the re-employment of employees affected by structural reforms and to encourage the employment of disadvantaged persons. It is hard to predict the depth, length and employment consequences of the downturn affecting the real economy. The majority of available forecasts are uncertain about future trends, and expectations become more pessimistic as time goes by. According to the forecast and study of GKI (Economy Research Institute), the unemployment rate was 8 % in 2008, 10,5 % in 2009, and 11,8 % till April in 2010 whereas the forecasted unemployment rate is 11 % in Source: Hungarian Central Statistical Office (KSH), A KSH jelenti Gazdaság és Társadalom 2008/12. [Available at: ( )] and is financially supported by the European Commission 13

14 Table 1. Unemployment rates in the EU in April 2009 and April Unemployment rate spring 2009 Unemployment rate spring BE BG CZ DK DE EE IE EL ES FR IT CY LT LV LU HU MT NL AT PL PT RO SI SK FI SE UK Source: European Employment Observatory and is financially supported by the European Commission 14

15 2.1.2 Governmental responds to the economic downturn In order to manage the economic and financial effects of the crisis the Government has introduced new incentives. The package of measures manages the crisis in the financial and labour market as well. The policies aimed at improving the employment situation are three-fold: preserving activity and the linkages with the labour market through Active Labour Market Programmes (ALMPs) in cases when unemployment cannot be avoided, supporting job preservation in the case of firms which are hit by the crisis but will probably be able to get back to normal business and keep their employees after the support is finished, supporting job creation and investment, promoting the access to credits (e.g. for SMEs through micro-credit schemes). Both national and EU resources are used to finance the above schemes. Core crisis measures targeted directly at the labour market are the following: - Job protection measures [National Employment Found: a total of HUF 7.3 billion (allocated), additional HUF 20 billion from the European Social Fund programmes with short working-time arrangements to SMEs (allocated) and a similar programme with HUF 10 billion budget for large enterprises (ongoing)]; - Mixed ALMPs (HUF 10 billion for central measures to support complex ALMPs administered to the new registered unemployed); - Unemployment benefit portable to employers for the new registered and is financially supported by the European Commission 15

16 unemployed (from 2010, unlimited). 5 Other measures among others: - continuing the large public works programme Pathway to Work targeted at long-term unemployed (more than 100 thousand affected per year, for a round HUF 80 billion); - changes in maternity leave (shortened to 2 years with higher benefit); - increase in pensionage (62 to 65 years from 2012 to 2017). 2.2 Legislative and institutional framework Full understanding the statistics and the policy developments in the last 6 years cannot be reached without having an explanation on the recent legislative developments in a nutshell. The whole legal framework on migration has been renewed in the last three-four years, mostly in order to harmonize this field of law with relevant EC legislation 6. In December 2006, the Hungarian Parliament adopted two new Acts on migration: the Act on the Entry and Stay of Persons Enjoying the Community Right of Free Movement and the Act on 5 Source: Cseres-Gergely Zsombor: Recovery measures in Hungary - dealing with the crisis in a small, open and indebted society. [Available at: SYSDEM14Jan2010.pdf ( )] 6 Council Directive 2003/86/EC of 22 September 2003 on the right to family reunification, Council Directive 2003/109/EC of 25 November 2003 concerning the status of third-country nationals who are long-term residents, Council Directive 2005/71/EC of 12 October 2005 on a specific procedure for admitting third-country nationals for the purposes of scientific research, Council Directive 2004/114/EC of 13 December 2004 on the conditions of admission of third-country nationals for the purposes of studies, pupil exchange, unremunerated training or voluntary service, Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC. and is financially supported by the European Commission 16

17 the Entry and Stay of Third-Country Nationals. The two acts have replaced the former single Aliens Act as of 1 July The codification technique was to elaborate two separate Acts, since with the European Union membership, the category of foreigners has not been an adequate legal term anymore. One purpose of the issuance of residence permits for third-country nationals is the purpose of gainful employment. The validity of a residence permit granted for the purpose of gainful employment can be three years maximum, and it may be extended by three additional years at a time. However, in case of employment with work permit obligation, the validity period of the residence permit cannot exceed the duration of the work permit. The duration of the work permit can be maximum two years. Unless otherwise prescribed in the Act, third-country nationals are also entitled to work with a seasonal employment visa and with residence permits issued for other purposes, such as for family reunification or studies. In the Republic of Hungary the procedure of issuing work permit falls under the competence of the Ministry of Social Affairs and Labour and the work authorities. The several times amended Ministerial Decree 8/1999. (XI.10.) 7 regulates the employment of foreigners in Hungary and contains provisions on the different types of work permits, exemptions from obtaining a work permit and the procedural rules. Before the 1 st of January 2008 the validity period of an individual work permit was maximum 1 year, while the amendment made it possible to issue such a permit for maximum 2 years. The main reason of the amendment was to make the rules more flexible and to reduce the administrative burden of employers. By extending the validity period of the individual work permit to 2 years, employers do not have to submit an application for a work permit every year and the validity period became more harmonized with the validity period of the residence permit. In those areas 7 8/1999. (XI. 10.) SzCsM rendelet a külföldiek magyarországi foglalkoztatásának engedélyezésérıl. and is financially supported by the European Commission 17

18 where the need arises, the regulation allows that the third-country workers in the framework of simplified authorisation procedures, or without having a work permit take up employment. Pursuant to the latest amendment of the law from the 1 st of January 2010 the work permit shall be issued without the examination of the labour market situation when a third-country national after the expiry of the work permit s validity period should take up employment at the same employer and in the same sphere of activity. According to the above-mentioned Ministerial Decree when applying for a work permit an authentic copy of the document in proof of the foreign workers qualification, and its official Hungarian translation if made out in a foreign language has to be attached by the applicant. If there is any doubt in respect of qualification or training, the employment center shall contact the competent authority in the field of adaptation (recognition) of foreign diplomas (certificates) to acknowledge whether the conditions for the adaptation (recognition) of such diplomas (certificates) are satisfied Political debate and involvement of stakeholders In Hungary there is not only a lack of public debate about migration, but the issue is rather distorted by some unfortunate statements and misunderstandings. It was a clear sign of relevance form the political side, that in February 2007 within the framework of a so-called political debate day in the Hungarian Parliament dedicated to the issue of demographic changes the one and only main topic was family and child politics, and migration was outright marginal. Regarding the wrong track of the discussion on migration issues, we should go back to 2007 as well. After a political statement based on a misunderstanding, évi C. törvény a külföldi bizonyítványok és oklevelek elismerésérıl. and is financially supported by the European Commission 18

19 Hungary s mass media was occupied for a couple of days with news regarding an alleged government plan to import "one million Asians" into the country to solve its demographic problems, which was obviously not the plan, but the incorrect interpretation of a draft governmental document among others about the necessity of migration. In a nutshell: unfortunately the political elite in Hungary do not have a prominent interest in the topic, and if the issue gets on table, the daily political interests often sidetrack the debate. Nevertheless, at lower and professional level the issue is of course highly relevant. The migration issues are not decided by a single public actor. Until the governmental changes in late May 2010 the competences were shared between the two key actors on the field: the Ministry of Justice and Law Enforcement (and within it the Department of Cooperation in Justice and Home Affairs and Migration, and the Office of Immigration and Nationality, whose interests did not always align), and the Ministry of Social Affairs and Labour. Other actors were the Ministry of National Development and Economy, the Ministry of Education and Culture, and the Foreign Ministry. Furthermore, an inter-ministerial Committee on Migration was set up in 2004, but so far it has not played a significant role in formulating migration policy. Within the new governmental structure after the 2010 general elections the leading role has remained double. The competences up till now without any major changes regarding the details are on the one hand in the re-established Ministry of Internal Affairs, and on the other hand in the Ministry of National Resources responsible among others for social and labour affairs as well. On labour market issues Hungary has a very important and extensive forum which is the National Council for the Reconciliation of Interests (OÉT). This body is a macro-level national forum for tripartite cooperation of workers' and employers' representatives and the government. Its competence covers all issues and is financially supported by the European Commission 19

20 related to the world of labour, including migration as well. The OÉT provides the institutional framework to social partners and the government for their tripartite negotiations and national agreements on selected labour issues. The OÉT also ensures the framework for social partners to be consulted on draft economic, social, employment and other labour-related laws, as well as the underlying policies and priorities. It is also the forum for general discussions and exchange of opinions on economic and social issues that are of national relevance and major interests for the actors in the world of work. However labour migration does still not play an active role in the work of the body. Up till now migrationrelated topics on its agenda were only about the transitional restrictions of the free movement of workers, which is not the subject of the study. Besides the public sector there are some very engaged actors present from the private and non-profit sectors. Associations, NGO s and think-tanks bring often together experts, stakeholders and policy makers in order to discuss issues, such as integration policies, the effects of immigrants on the labour market and the tolerance towards immigrants. Furthermore, they aim to bring the topic to the attention of the public, and to help dispel common misbelieves about immigrants (and refugees), and on what developments are likely in this policy area in the future. However, the lack of coordination between different stakeholders in the field of migration and the labour market is considered as a striking barrier. In Hungary there is no really institutionalized dialogue or exchange of views among stakeholders in labour migration such as employers, trade unions, social partners, political parties, local communities and NGOs or social workers dealing with migrants, integration programs and human rights. and is financially supported by the European Commission 20

21 III. APPROACH TO IMPLEMENTING ECONOMIC MIGRATION POLICY 3.1 Implementation of economic migration policy / legislation In terms of labour migration one of the main significant developments occurred in April 2009 when the Government adopted the Strategy of the Cooperation in the Area of Freedom, Security and Justice of the Republic of Hungary 9 (hereinafter referred to as in this section: Strategy) for a 5 year period. This document emphasizes that Hungary must seek to promote the entry and stay of legal immigrants in line with the needs of the economy and science and also of the national labour market. The links between legal migration and demographical trends have to be taken into account, particularly in case of migrants staying on a long-term basis in Hungary. As written in the Hungarian Policy Report 2009, the strategy states that in the field of legal migration the circular migration of highly skilled migrants needs to be encouraged to the benefits of the Member States and third countries and that of the migrants themselves. The strategy also states that in line with the Commission Communication Researchers in the European Research Area: One profession, multiple careers 10 and the Commission Recommendation on the European Charter for Researchers and on a Code of Conduct for the Recruitment of Researchers 11, it is important to promote the adoption of legislation that makes the international mobility and employment of persons working in scientific positions possible without barriers. As mentioned in the introductory notes, in Hungary the transposition of Researcher Directive 2005/71/EC was already in 2007 completed. The main challenge with regard to this category was to lay /2009. (IV. 24.) Korm. határozata Magyar Köztársaságnak a szabadság, biztonság és a jog érvényesülése térségében való együttmőködésére vonatkozó közötti kormányzati stratégiájáról. 10 COM/2003/0436 final /251/EC Official Journal L 075, 22/03/2005 P and is financially supported by the European Commission 21

22 down the conditions and the procedure under which a research organization can be approved by the competent authority. Such research organizations have the right to conclude hosting agreements with researchers from third countries, facilitating their admission to the country. The transposition of the last year accepted EU Blue Card Directive 12 Sanctions Directive 13 are already under preparation. and In order to get a complete overview on the Hungarian labour market we have to briefly touch upon the current legislation regarding persons having to right to free movement. In 2008 the Government Decree No. 355/2007 (XII.23.) on the provisional rules relating to free movement of workforce of persons having the right to free movement and residence 14 was amended and this modification entered into force on 1 st of January Pursuant to this amendment Hungary has opened its labour market to workers coming from countries of the European Economic Area irrespective of their skills or the principle of reciprocity. This means that all persons concerned can work in the territory of Hungary without having a work permit, however the employer is obliged to notify the labour centre on the employment of such person. The notification has to take place for statistical reasons, in order to keep a record on migrant workers in Hungary. According to the general rules third-country nationals are only entitled to work in Hungary with having a work permit. There are a few exceptions to this rule listed by law. Although the list has become broader and broader in the recent years, it was mainly due to a spontaneous decision/promise of the government or due to the lobbying of certain groups. The minister responsible for labour and social 12 Council Directive 2009/50/EC of 25 May 2009 on the conditions of entry and residence of thirdcountry nationals for the purposes of highly qualified employment, OJ L 155, , p Directive 2009/52/EC of the European Parliament and of the Council of 18 June 2009 providing for minimum standards on sanctions and measures against employers of illegally staying thirdcountry nationals. 14 A Magyar Köztársaság által a szabad mozgás és tartózkodás jogával rendelkezı személyek tekintetében alkalmazott, a munkaerı szabad áramlásával összefüggı átmeneti szabályokról szóló 355/2007. (XII.23.) Korm.rendelet. and is financially supported by the European Commission 22

23 affairs with the agreement of other competent ministers is entitled to set the highest number of work permits to be issued to third-country nationals. This quota may not exceed the requested workers reported during the previous year. It should be noted that this quota far exceeds the number of foreigners working legally in Hungary in the given years. According to the available data in 2009 the number of the issued work permits hardly reached the 30% of the abovementioned quota. Before looking at the figures regarding the labour market situation in Hungary, it has to be stressed, that unfortunately the statistics are based on issued work permits or notifications, and not attached to a person. Therefore, the numbers provided by the employment centres have to be treated with reservation. According to the number of permits issued by the Employment Centres, the total number of foreign workers in Hungary was in 2007 while it was in 2008, which shows a significant decrease of 27%. In the first half of 2009, work permit were issued which shows a 32,5% decrease in comparison to the number of work permits issued during the first half of The total number of work permits, registrations, green card certificates issued and notifications made in the first half of 2009 decreased with 50% in the construction sector (2 689) and processing industry (2 062), whilst it doubled in the agriculture sector. As regards to the labour authorising procedures, seasonal employment in agriculture may be allowed up to 150 days within 12 months. The 12-month period should be counted from the earliest commencement date of employment that is indicated in the first issued seasonal work permit of the employer. The authorising procedure must be carried out on the basis of the labour market examination, at the same time certain facilities are provided by the law. The employment of third-country nationals is necessary to be approved by labour centres pursuant to the examination of the Hungarian labour market situation. and is financially supported by the European Commission 23

24 Labour market situation analysis means that in case of a general work permit 30 days, in case of a seasonal work permit 15 days before the planned starting date of the employment the future employer has to announce his or her workforce demand to competent labour centre. The issue of a work permit is only possible, when no Hungarian or EEA citizen or a relative of such has applied for the job concerned. To sum up, work permit is not easy to obtain and this is why the procedure has often been criticised by foreigners and employers. In many cases the procedure has been considered as an administrative burden by being too long and bureaucratic. This is the situation particularly in cases, when it is already decided that the vacancy shall be filled by the third-country national concerned and it seems obvious, that the applicant cannot be substituted by any national or EEA citizen. In this respect the whole authorising procedure becomes a waste of time. With regard to other technical regulations, work permits are issued by the employment centres. The residence permit and the work permit are not incorporated into a single document for the time being. Two authorities, namely the OIN and the employment centres are involved in the process. Nevertheless, the rules of this procedure will have to be changed in due time, if the relevant EC directive on the single permit enters into force. At the moment not only the authorities involved are different, but also the applicants, since it is the thirdcountry national who has to submit an application for a residence permit, while in case of the work permit, it is the employer who asks for the issuance. Third-country nationals coming to Hungary for the purpose of gainful employment might be divided into two main groups. The first group takes up employment in possession of a work permit and a work contract while members of the other group are owners or directors of business associations, cooperative or some other legal entity formed to engage in gainful employment, or are members of the executive, representative or supervisory board of such entity. The Act on Third-Country Nationals mentions a third form of employment namely and is financially supported by the European Commission 24

25 when a migrant lawfully performs work in a self-employed capacity, but it is not typical. When speaking about problems of implementation, the major concern arises regarding the classic case of employment. In this case the purpose of the residence is justified by work permit and work contract, and supposing the severe interpretation of the law this would mean the automatic acceptance of the reason for stay. According to the colleagues of the employment centres, their authorisation procedure is practically more or less automatic; there is only a very narrow space where it is possible to reject the application for the work permit. As a result of the above, there is no obstacle for submitting non-realistic applications as Mongolian cleaner, a Turkish and Moroccan unskilled worker in the construction industry, a market researcher speaking Ukrainian language exclusively etc. According to the relevant rules it is not even a reason for refusal if the employer and the employee do not speak a common language or if the applicant is pregnant at a very advanced stage and physical work should be carried out. The larger countries of origin become specialized in one occupation. Therefore, third-country nationals from Turkey are mainly from China exclusively cooks, from Mongolia sewers and from Thailand masseurs. It might be also a problem that there is no limit in issuing work permits for the migrant workers of one company, so it occurs, that a small Chinese buffet can get work permit for twenty people at once, even if it s physically impossible for location given. Looking at from the other side, owing to the incomplete regulation the control of the company considers as unnecessary since there is no obstacle for foreigners to switch the job in a few weeks after receiving the residence permit. In cases like this the withdrawal of a residence permit is really rare since previous employers do not announce the change. However, according to the Act on Third-Country Nationals the employer is obliged within three working days to notify the competent body, but unfortunately the failure to do so does not face any penalty. and is financially supported by the European Commission 25

26 It is often the case that the employer might meet his responsibility, but towards one of the offices only, and the other office does not obtain knowledge about this. The previous practice of the employment centres was to send the withdrawing decision on work permits to the OIN. The introduction of the onestop system and the establishing of the legal basis for the mutual information between the authorities would impose fewer administrative burdens on the employer, so that the authorities with greater certainty and in larger numbers would acquire knowledge of the withdrawal underlying facts. An additional problem which was pointed out by the employees is, when after the termination of their employment a new job has been found, and given the fact that the former employer had failed to notify the termination of employment to the competent employment center, no new work permit would be issued because of the previously issued but valid permit they have. For this reason they are not able to attach a current valid work permit in the immigration procedure. In Hungary, xenophobia is also mentioned as one of the main barriers of implementing migration policy, as the Hungarian society is one of the most xenophobic societies in contemporary Europe. According to the 2007 annual survey of the TÁRKI Social Research Institute 15, researching the amount of xenophobia in the adult Hungarian population for a decade, 29% of the Hungarians can be considered openly xenophobic. Since 2007, the EU Integration Fund has started to fund several multicultural awareness raising and anti-xenophobic projects. However, the major drawback is that antidiscrimination actions are only experimental and project-financed, consequently fragmented, temporary and do not have long lasting effects. 16 In the field of labour migration there have been numerous projects financed by the 15 Data collected in the course of the Omnibusz research project in February 2007, published on the website of the TÁRKI Research Institute on [Available at ( )] 16 B. Frouws MSc and Drs. B.J. Buiskool: Migrants to Work, Innovative approaches towards successful integration of third country migrants into the labour market, March and is financially supported by the European Commission 26

27 European Integartion Fund. An example of such an approach was concluded by Artemisszió Foundation. This training focused not only on migrants, but also on employers, by training them to understand the added value of diversity at work and making them aware of the competences of migrants. The project introduced an innovative integration service package with the help of a new method for measuring competencies, gaining self-awareness, boosting self-confidence and individual mentoring and integration training. In order to set up a suitable programme, it was of particular importance to acknowledge that migrants are often intending to move on towards more developed EU countries in the shortest possible time. So happened that the Artemisszió Foundation decided to offer highly convertible labour market skills, in general such as curriculum vitae writing, business plan development, etc. with some Hungarian specific extras for those who might intend to stay. Also identified as a policy barrier in the report on Hungary, is the lack of migration as a central issue for political parties. Policy discourses about migration in Hungary remain isolated, short term and elicit only ad-hoc attention, usually related to some local event Statistics and Trends With regard to the characteristics of immigration in Hungary, we can conclude as already mentioned, that the number and proportion of immigrants are low. Migrants constitutes approximately only 2% of the whole population. So Hungary is not a main destination country for immigrants, but rather a typical transit country along the migration routes towards the western countries of the European Union. The immigrants mainly come from neighbouring countries and most of them are ethnic Hungarians. The slight immigration is mainly a demand-driven, sub-regional labour migration, 17 B. Frouws MSc and Drs. B.J. Buiskool: Migrants to Work, Innovative approaches towards successful integration of third country migrants into the labour market, March and is financially supported by the European Commission 27

28 often based on seasonal or temporary employment. However, besides immigrants coming for employment purposes, the proportion of residence permit applicants wishing to stay for purposes of family reunification or studying has increased. However, the present situation with low number of foreigners might change rapidly. Experience from the recent past, especially in former emigration countries (such as Italy, Spain, Greece or Ireland) demonstrated that these countries received a significant immigrant population in a few years span, and these countries were totally unprepared from social, political and legal aspect to this situation. Since Hungary is a member of the European Union and a country at the external border of the EU, it is possible that in the near future it will receive larger numbers of third-country nationals. Therefore, it should be considered higly important that Hungary prepares itself both legally and socially for such an event. According to the data given by the OIN the number of migrants coming to the territory of Hungary in 2009 decreased with almost 7% in comparison to the data given in The reason for the slight decrease could be Romania s accession to the EU, as since then Hungary s main foreigner group has not belonged to third-country nationals any more. As mentioned above and shown in Table 2. the migration flows of third-country nationals have been dominated by returning ethnic Hungarian minorities from neighbouring countries. Among the thirdcountry nationals, 17% are Ukrainain citizens, following by the Chinese citizens with 16%, while 10% are of Serbian origin. and is financially supported by the European Commission 28

29 Table 2. Number of applications for a stay exceeding three months according to Acton Third-Counry Nationals by nationality Nationality Numbers of applications Ukrainian Chinese Serbian American Iranian Other Total Source: OIN From the table below it can be seen that the total number of residence permits decreased not significantly from 2008 to This is again attributed to the fact that Romania and Bulgaria joined to the European Union, therefore Romanians and Bulgarians become persons enjoying the right to free movement. It can be also observed that the number of residence permit for gainful emploment in 2009 shrank with 20% compared to 2008 whereas the official purpose of stay became more popular and quadrupled from 2008 to and is financially supported by the European Commission 29

30 Table 3. Number of applications for a stay exceeding three months according to Acton Third-Counry Nationals by the purpose of stay Purpose of stay gainful employment studies family reunification other official visitation voluntary work medical treatment reserach Source: OIN Statistics on the labour market and migration The number of foreigners entering the Hungarian labour market declined steadily over the past few years, according to data of the Public Employment Service. While in 2004, the inflow recorded by PES was about 80 thousand; in 2009 the number of foreign workers coming to Hungary was less than 30 thousand. The migratory pressure has eased; however, the number of persons possessing a valid work permit or registration took a fluctuated shape. Looking at the test period, the number has remained essentially unchanged since It was about 66 thousand in 2004, and five years later the number of legally employed foreigners was around 62 thousand. As a consequence of the global economic recession a temporary downturn on a larger scale was observed, when 53 thousand foreigners were in possession of a valid work permit or were registered and is financially supported by the European Commission 30