Hungary: Retail shops will be closed on Sundays

The Hungarian Parliament has adopted Act CII of 2014 on the Prohibition of Work on Sundays in the Retail Sector (the "Sunday Retail Act"). The Sunday Retail Act was published on 30 December 2014 and it will enter into force on 15 March 2015.

1. Social disputes

Although one aim of the Sunday Retail Act is to protect families and employees, this change is highly controversial as it may reduce profitability and lead to store closures and lay-offs in some retail chains. Furthermore, some employees may suffer a pay reduction by losing their Sunday allowance and the change will make it harder for many families to find time for shopping within their busy schedules.

2. Limitations from March

Currently, retail shops may be open every day, including Sundays. The Sunday Retail Act introduces new regulations for businesses in the retail sector regarding their opening hours with effect from 15 March 2015. The Sunday Retail Act applies to most retail activities, irrespective whether such activity is permanent or periodical and whether it has a fixed or variable location. However, the scope of the Sunday Retail Act does not cover - among others - restaurants, hotels, pharmacies, shops at airports, shops around the area of railway/bus terminal buildings, markets, petrol stations.

According to the new rules, shops in the retail sector which fall under the scope of the Sunday Retail Act can be open from 06:00 to 22:00 on calendar days other than Sundays and public holidays. The prohibition does not apply to the four Sundays before Christmas (the so-called advent period), to 24 December and 31 December and to one optional Sunday every calendar year. Shops must give at least 15 days' prior notice to the competent commercial authority of their intention to open on Sundays during the advent period and on the optional Sunday.

There are some exceptions: some retail businesses will be allowed to operate on Sundays and public holidays under specific terms and conditions. Such exceptions are retail shops in sport facilities during sporting events, shops only selling bakery and dairy products, florists, newspaper stands, and shops not exceeding 200 m2 provided that during such time they are operated by private entrepreneurs, members of private firms, certain members of business associations or their family members.

Some of the exceptional businesses may be open within different time limits. For instance, shops only selling bakery and dairy products can be open on Sundays and public holidays between 5 a.m. and noon, and on other days between 05:00 and 22:00. Florists and newspaper-stands can be open on Sundays and public holidays between 06:00 and noon.

In practical terms the above means that supermarkets and hypermarkets with more than 200m2 of retail space and other retail businesses that do not fall under any of the exceptions will no longer be able to open on Sundays and on national holidays from 15 March 2015.

The Government (in a decree) may regulate differently the provisions above and may consider local specialities, customs or the habitants' interests (e.g. tourism, environment) when determining opening hours of shops. Based on our information the relevant Government decree in the matter will be published already this spring before the Sunday Retail Act comes into force.

Currently there is a public debate on how the Sunday-restrictions apply to home-delivery services and on-line shopping. The problem originates from the terminology and definition used in the Sunday Retail Act as it is unclear whether a webshop would be considered a 'shop' which must be closed on Sundays or whether the trader could prepare the package and/or deliver the products ordered via a website to consumers on such days as well.

According to the unofficial communication of the Ministry of Economic Affairs available in online press, the Sunday Retail Act applies to retail activity which also covers both the distribution of products and directly related services. Therefore, it also applies e.g. to packaging services and delivering products to customers. Based on the above, domestic traders operating online stores possibly will not be able to deliver the products to customers on Sundays. However, online traders operating in the neighbouring countries (e.g. Austria, Slovakia etc.) may supply goods to customers in Hungary on Sundays as well.

3. Consequences of breaching the law

The Authority for Consumer Protection (the "Authority") has the competence to inspect whether the affected shops comply with the prohibition under the Sunday Retail Act. In the case of a breach, the Authority will close the store temporarily:

• for at least 5 but not more than 15 days for the first breach;
• for 30 days for the second breach;
• for 90 days for the third breach;
• for 365 days for any consecutive breaches.

Besides the above, the Authority may impose an administrative fine based on Act CLV of 1997 on Consumer Protection the amount of which depends on the given circumstances.

4. Impact on employers

These changes mean that Sunday may no longer be scheduled as regular working time for employees working in the affected part of the retail sector. Those working in retail outlets that are permitted to open on Sundays can schedule it as regular working time as long as the rules on Sunday allowances and the requirements of the Labour Code are met.