"It's a common fallacy that an employment contract has to be in writing. Of course, they often are, but verbal contracts are just as valid. If you have agreed to work for someone and will be paid in return, that is a binding contract even if it's not written down, and as such, protects you from any discrimination or illegal behaviour on the part of an employer. "

Have you heard anything like this before? This is really a country of trust. I can not imagine how this could work in Hungary. Without written contract noone would pay tax in Hungary. 

I don't understand how a system like this can work, but in a country where citizens don't have ID cards, anything can happen :)

The only thing I would like to know, if there is a disaggreement between the employer and employee, how the court can decide who is right? Because verbal contract can not be proven unless they recorded the conversation. 

As we say in hungarian: "Words fly away, writing stays"