If you are injured at work, you typically hear about money from three different places: sick pay, the company's accident insurance, and the idea that “the employer has to pay”. As a broker, I see that these three strands often get mixed up in injured people's minds: many believe that the insurer's fixed-sum payment is the employer's compensation, and do not even know that the two apply side by side. Yet the three systems rest on different legislation, different logic and different evidence. This article sorts out the roles: who pays what, on what basis – and what you need to do so that none of the strands is left as a loose end.
- After an occupational accident, three independent systems may come into play: the state social-security system (TB), with accident sick pay and accident benefits; accident insurance (the fixed sum set in the contract); and the employer's liability for damages under the Labour Code (Mt.).
- Under Section 166 of the Mt., the employer is liable, regardless of fault, for damage caused in connection with the employment relationship, and can exonerate itself only in narrow circumstances – in which case the burden of proof is on the employer; for harm to physical integrity, non-pecuniary damages (sérelemdíj) can also be claimed.
- The insurer's payment is not compensation but a pre-agreed sum – it does not measure the actual loss and does not replace the claim against the employer. The three routes have to be pursued separately, but the documents are the same for all three.
First strand: accident benefits from the state social-security system (TB)
Under Section 52 of the Health Insurance Act (Ebtv., Act LXXXIII of 1997), an occupational accident is one that befalls the insured person while working in the course of their occupation or in connection with it – including a commuting accident on the way to work or on the way home. Whether an accident counts as occupational is not a matter of the employer's “goodwill”; it is decided by the body entitled to determine accident sick pay (the social-security payment office or the county government office). Once that decision has been made, according to the Hungarian State Treasury (Magyar Államkincstár), accident sick pay equals the full calendar-day amount of the sick-pay base, or 90% of it for a commuting accident – so it is more favourable than sick pay due to illness. Where there are lasting consequences, the Ebtv. provides that an accident annuity may be payable, and accident-related healthcare services may be available for treatment connected with the injury. What counts as occupational and what does not is explained in detail in the overview of occupational accidents; the system as a whole is shown in the map of TB accident benefits.
Important: the TB does not pay compensation but benefits defined by law. It does not ask who is at fault, and it does not reimburse, for example, lost overtime, treatment you pay for yourself or pain. That is precisely why the other two strands remain.
Second strand: the fixed sum from accident insurance
Under Section 6:487 of the Hungarian Civil Code (Ptk.), accident insurance – whether a group policy taken out by the employer or your own individual contract – undertakes to pay the sum or annuity specified in the contract in the event of the insured person's accidental death, impairment of health or disability. The key phrase is “specified in the contract”: the insurer does not measure the actual loss but pays according to a pre-set benefit schedule – for fractures, days in hospital, surgery, permanent impairment. This payment does not depend on whether the accident was occupational, nor on who is liable for it; however, the insurer pays only for what is an insured event under the given contract. If the injury falls under an exclusion in the policy conditions, or its accidental cause is not proven, the insurer may decline the claim – regardless of whether the TB has recognised the accident as occupational.
Group accident insurance is often confused with employer's liability. The relationship between the two is explained in the article on employer's liability and group cover; the point here is simply that the insurer's payment does not in itself replace the employer's obligation to pay compensation. Whether the payout from a group policy paid for by the employer can be counted towards the compensation depends on the content of the specific contract and the circumstances of the case – it is worth clarifying this when the claim is reported, not in the middle of a dispute.
Third strand: the employer's liability for damages
Under Section 166(1) of the Labour Code (Mt., Act I of 2012), the employer must compensate the employee for damage caused in connection with the employment relationship. This liability is independent of fault: you do not have to prove that your boss made a mistake, only that the damage arose in connection with the employment relationship, and how much it amounts to. Exoneration is up to the employer: under Section 166(2), it is released from liability if it proves that the damage was caused by a circumstance outside its sphere of control that it did not have to reckon with and could not have been expected to avert – or that the damage was caused solely by the injured person's unavoidable conduct. In court practice these two escape routes are narrow; a poorly maintained machine, a slippery shop floor or missing protective equipment typically falls within the sphere of control.
What does the compensation cover? Under Section 167(1) of the Mt., the employer must compensate the employee's entire loss – lost income (including what sick pay does not replace), damage to property, and justified costs connected with recovery. There are three limits: under Section 167(1), the employer need not compensate damage that it proves was not foreseeable at the time the damage was caused; under Section 167(2), it need not compensate the part of the damage that was caused by the employee's culpable conduct or that resulted from a failure to meet the obligation to mitigate the damage; and under Section 172, benefits provided by the state social-security system must be deducted from the amount of compensation. So TB benefits do not come on top of the compensation but form part of it – the employer pays the difference.
On top of this come non-pecuniary damages (sérelemdíj). Under Section 2:43 of the Ptk., physical integrity and health are personality rights, and under Section 2:52 non-pecuniary damages can be claimed for their violation – and Section 9 of the Mt. requires the Civil Code's rules on personality rights to be applied in employment relationships as well. Non-pecuniary damages are awarded for pain and for the added hardship in everyday life; in a dispute the amount is assessed by the court, which is why I do not give a figure either. Under Section 286 of the Mt., employment-law claims become time-barred after three years – much shorter than the general five-year limitation period in civil law, so it is worth bearing in mind.
What the three strands have in common: the documents
All three routes rely on the same bundle of paperwork. Under Sections 64–68 of the Occupational Safety and Health Act (Mvt., Act XCIII of 1993), a work accident must be reported, investigated and recorded – this is the employer's obligation, while the injured person's obligation is to report the accident without delay to the person directing the work. The work accident report is the basis for recognition as an occupational accident, for the claim notification to the insurer and for the claim against the employer alike. If the employer does not record the accident or does not acknowledge it, you can turn to the occupational safety authority under the Mvt. The process is described step by step in the guide on reporting an occupational accident at the workplace.
- Medical records: outpatient sheet, test results, discharge summary, follow-up visits – needed both by the insurer and for the compensation claim.
- Work accident report and the investigation file: these show the circumstances on which the employer's liability is based.
- Receipts for costs: medicines, medical aids, travel, treatment you paid for – for compensation they are needed item by item.
- Income data: payslips, the sick-pay decision – for calculating lost income and the deduction.
What should you do in practice?
First, treatment and documentation, then the three notifications: to the employer (the report), to the TB (having the accident recognised as occupational, typically through the employer or the social-security payment office) and to the insurer – the primary route for an accident claim notification is the insurer's claims line. It is worth submitting the claim against the employer in writing and itemised; if the employer has liability insurance, the compensation is typically settled by that insurer. If the parties cannot reach a settlement, the route is an employment lawsuit – for this it is advisable to involve a legal adviser. As a broker, I help where I can in the insurance strand: in preparing the claim notification, in interpreting the policy conditions and in a stuck or disputed case – employer compensation and non-pecuniary damages, however, are legal questions, and there an employment lawyer is the right partner.
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Sources
- Health Insurance Act (Ebtv., Act LXXXIII of 1997) Section 52 – occupational accident, accident benefits
- Hungarian State Treasury (Magyar Államkincstár) – Accident sick pay (rate: the daily amount of the sick-pay base; 90% of it for a commuting accident)
- Labour Code (Mt., Act I of 2012) Sections 9, 166–167, 172 and 286 – employer's liability for damages, limitation period
- Occupational Safety and Health Act (Mvt., Act XCIII of 1993) Sections 64–68 – reporting and investigating work accidents
- Hungarian Civil Code (Ptk., Act V of 2013) Sections 2:43, 2:52 and 6:487 – personality rights, non-pecuniary damages (sérelemdíj), accident insurance contract
