a)  Hungary / b)  Constitutional Court / c) / d)  08-05-1998 / e)  16/1998 / f) / g)  Magyar Közlöny (Official Gazette), 38/1998 / h) .
Keywords of the systematic thesaurus:
General Principles - Democracy.
General Principles - Social State.
General Principles - Rule of law.
Institutions - Executive bodies - Sectoral decentralisation.
Fundamental Rights - Equality - Scope of application - Social security.
Fundamental Rights - Civil and political rights - Electoral rights.
Keywords of the alphabetical index:
Democratic, legitimacy / Public body / Social security, board.
The constitutional requirement of exercising public power is that the power should be based on democratic legitimacy. The legitimacy of the Social Security Self-governing bodies depends on whether the representatives of these Self-governing bodies are elected or delegated, and it also depends on the circle of persons who have the right to vote for the representatives of these bodies.
In its decision, the Constitutional Court examined whether Social Security Self-governing bodies are public bodies, and if so, whether they are based on democratic legitimacy as required by Article 2.1 and 2.2 of the Constitution, according to which Hungary is an independent and democratic constitutional State, where all power belongs to the people, and where the people exercise their sovereignty through elected representatives or directly. In its previous decision, the Court stated that public bodies are those which undertake public tasks, which otherwise should be carried out by the State or by local governments (Decision no. 38/1997, Bulletin 1997/2 [HUN-1997-2-007]). In the case of Social Security Self-governing bodies, public tasks are the following: the Self-governing bodies have the right to express their opinion on the draft of the law concerning social security, they can discuss with the Finance Minister the social security budget of the next year and the budget and the final accounts of the Social Security Funds, the Self- governing bodies have the right to decide inter alia on the use of the income of the Social Security Funds and, finally, the head of their central organ manages the offices of the Self-governing bodies. The Social Security Self-governing bodies are therefore public bodies. But are they established based on democratic legitimacy? The Social Security Self-governing body is a body made up of delegates from unions and employer associations. The subjects of the Self-governing bodies are therefore employers and workers paying into the funds. Under Article 7 of the Act LXXXIV of 1991 on the management of the Social Security Self-governing bodies however, the representatives of these Self-governing bodies should be delegated by the national trade unions of the employees and employers. Since only 54% of the employees are members of these national trade unions, the Self-governing bodies established according to this provision of the Act lack the democratic legitimacy the Constitution requires. Excluding a considerable part of the insured from electing the representatives of the Social Security Self-government results in the lack of democratic legitimacy of this body.
If the representatives of the Social Security Self-governing bodies are elected, it is a constitutional requirement that all the persons who have the right to vote should be entitled to participate in electing the representatives. If the representatives are delegated according to the law, the majority of the subjects should decide on who will be the representative. Where trade unions or social groups are entitled to delegate the members of the Social Security Self-governing bodies, it is important that the overwhelming majority of the subjects of the Self-governing body should be members of these organisations. In its current decision, the Court held that 54% cannot be considered as an overwhelming majority, therefore the Court annulled the provisions regulating the method of delegating the representatives of the Social Securities Self-governing bodies.
Supplementary information:
In the middle of July 1998 the Parliament passed a law that permitted the newly formed government to exercise full supervision and administration over the Social Securities Funds and broke up the two governing boards of the social security funds.
Decision no. 38/1997, Bulletin 1997/2 [HUN-1997-2-007].