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Country snapshot

Key considerations
Which issues would you most highlight to someone new to your country?

The Austrian labour relations system provides for adequate checks and balances which help to establish harmonious workplaces. As a result, Austria is among the European countries with the fewest strikes and lockouts. On average, Austria’s strike statistics show less than one minute of strikes per employee per year in recent decades. Therefore, Austria’s workforce – although afforded strong protections on both a contractual and collective level – is a reliable source of productivity. 

What do you consider unique to those doing business in your country?

One of the guarantors of the long-standing social peace in Austria is the institution of so-called ‘social partnership’, where unions, employer representatives and legislators cooperate closely to establish regulations that anticipate potential conflicts of interest and resolve issues on a collective industry-wide level in order to avoid major disputes and disruptions at the plant level.

Is there any general advice you would give in the employment area?

Although legally effective and enforceable, oral agreements and amendments relating to employment conditions should be avoided.

In addition, employers should not seek to sway relevant works councils: co-determination, rights and obligations are exhaustively regulated in the Labour Relations Act, and thus deal making outside the statutory framework is unnecessary. 

Emerging issues/hot topics/proposals for reform
Are there any noteworthy proposals for reform in your jurisdiction?

Austrian law distinguishes between blue-collar employees and white-collar employees, resulting in different levels of protection in various contexts (eg, grounds for summary dismissal and notice terms). The distinction is widely considered outdated and is expected to be abolished soon.

Other recent reforms include regulations for all-inclusive contracts and restrictive covenants.

With effect from January 1 2016 the monthly base salary for all employees must be included in the employment contract. A reference to the rules in the collective bargaining agreement is no longer sufficient. Non-compliance with this new rule in the case of all-inclusive agreements entitles the employee to a reasonable actual base salary comparable to the industry in the region. An all-inclusive compensation means that the agreed salary also covers any overtime and extra hours. In this case, any extra hours or overtime is covered, as long as the overpayment compared to the minimum salary under the applicable collective bargaining agreement sufficiently covers the actual work provided (including any premiums).

Since January 1 2016 the salary threshold for the permitted penalty for breaches of non- compete clauses has risen from 17 to 20 times the ASVG – maximum assessment base (ie, for 2016 €3,240 per month). The amount of a contractual penalty has also been limited, so that the agreed penalty must not exceed six net monthly salaries (excluding special payments).

What are the emerging trends in employment law in your jurisdiction?

Following European Court of Justice case law and legislation adopted within the last decade which transposed EU directives and regulations into national law, anti-discrimination has played an ever-increasing role in the Austrian legal landscape. Almost unheard of a decade ago, discrimination claims are now a focus in employment law.

The employment relationship

Country specific laws
What laws and regulations govern the employment relationship?

The statutory framework governing employment is multi-layered. The Austrian employment regime comprises numerous individual statutes, each of which addresses specific aspects of the employment relationship (eg, working hours, the employment of foreigners, annual leave and protection for working parents). Specific legislation regulates special groups of employees (eg, actors, journalists, agriculture workers and construction workers). The legal status of the employer also determines the applicable law (eg, special statutory provisions for civil servants employed by federal, provincial or local governments).

Key statutes include the following.

Employment Act
The Employment Act regulates the contractual side of white-collar employment. It contains mandatory provisions that govern the employment relationship, unless otherwise agreed for the benefit of employees. As such, it defines the statutory minimum requirements. Generally – and under the doctrine of pre-emption – contractual provisions must comply with the statutory minimum requirements; as such, most of the act’s terms are implied by law. The Employment Act regulates crucial aspects of employment (eg, restrictive covenants and non-compete clauses, sick leave, commission payments and other regular benefits, statutory notice terms and grounds for dismissal, severance pay and referral letters).

Contract Law Adjustment Act 
The Contract Law Adjustment Act:

  • regulates employers’ obligation to provide employees with written statements of employment terms;
  • contains various mandatory provisions regarding employees on assignment or secondment in Austria; and
  • transposes the EU Transfer of Undertakings Directive into Austrian law (ie, the mandatory transfer of employment to the acquirer of a business).

Equal Protection Act
The Equal Protection Act was signed into law a decade ago. It prohibits discrimination against job applicants and employees on the grounds of age, race, religion, sexual orientation, gender and disability.

Labour Relations Act
Enacted in the mid-1970s, this core statute regulates the collective aspects of the employment relationship, including:

  • collective bargaining at the industry and plant level (eg, plant agreements between the works council and an employer);
  • the election, tenure and termination of works council members;
  • comprehensive and far-reaching regulations on each works council’s co-determination in social, personal and business matters; and
  • general protections against dismissal based on a lack of social justification or impermissible motives (eg, dismissal motivated by union membership).

Maternity Leave Act and Paternity Leave Act
These acts allow both parents of a newborn child to request parental leave (alternately or exclusively) until the child’s second birthday. After parental leave, either or both parent can request to work part time or reduce existing part-time working hours until the child’s seventh birthday, subject to certain exemptions. Both acts afford special protection against dismissal.

Holiday Act, Working Hours Act and Act on Daily Rest Periods
These acts govern:

  • holiday entitlements and allowances;
  • maximum working hours and overtime;
  • minimum daily rest periods; and
  • flexible working schemes.

Austrian employment relationships are also largely governed by collective bargaining agreements entered into at the industry level between a labour union and the competent body representing the employer (usually the chamber of commerce).

Who do these cover, including categories of worker?

Several statutes apply to both white-collar and blue-collar employees, while some apply only to white-collar employees. Civil servants are subject to a separate legal framework, broadly mirrored on the legislation for private-sector employees.

Misclassification
Are there specific rules regarding employee/contractor classification?

Austrian employment legislation generally applies only to individuals performing personal services within a strict framework of instructions in relation to time, place and method of rendering their services. These individuals are qualified as ‘employees’ within the meaning of Austrian employment legislation. Once this determination has been made, several statutes regulate the specific types of employment, which are determined by:

  • the type of work performed (eg, blue-collar workers or white-collar workers);
  • the employee’s responsibilities (eg, managerial or non-managerial personnel, who have different protections regarding working time and dismissal); or
  • the type of employer (eg, private-sector employer or public-sector employer).

Contracts
Must an employment contract be in writing?

Although no legal requirement states that employment contracts must be in writing, employers must issue written statements of employment terms to employees.

Are any terms implied into employment contracts?

Austrian employment legislation mostly comprises mandatory provisions that allow deviations from the law only for the employee’s benefit. Therefore, under the doctrine of pre-emption, contractual terms must not contravene the majority of the terms under Austrian employment legislation. The scope of this legislation means that most employment terms are implied by law. 

Are mandatory arbitration/dispute resolution agreements enforceable?

Enforcement of the employment statutes mainly rests with the judiciary. In relation to employment, the Austrian court system is strictly federal and has a three-tier structure. The district courts have jurisdiction over first-instance employment disputes. The Vienna circuit has a specialised court at district court level (the Vienna Labour Court).

Appeals are heard by one of the four courts of appeal located across Austria. As a last resort, the Supreme Court may be called on to review an appellate decision if certain legal requirements are met (eg, the case has paramount legal significance). Based on the procedural rights afforded to employees under the civil procedure rules, mandatory arbitration or dispute resolution agreements are enforceable only if they concern ongoing disputes between an employer and employee. As for potential future disputes, only members of the management boards of either limited liability companies or stock corporations may opt for private arbitration. 

How can employers make changes to existing employment agreements?

Austrian law allows for unilateral changes to existing employment agreements to a limited extent. Employers can retain and exercise the right to determine certain aspects of employment, but this right is mostly subject to judicial scrutiny. Therefore, as a rule, changes to existing employment agreements can be made only by mutual consent. One lawful way to exert influence on an employee is to present a proposed change in a notice of termination, which is conditional on the employee’s refusal to consent to the proposed change. Although this type of conditional termination is subject to regulation, the courts usually allow employers to reduce an employee’s salary by up to 20% without incurring the general statutory protection against dismissal (ie, lack of social justification).

In addition, an employer will be considered to have tacitly accepted a modification in an employee’s contractual obligations if it does not request a specific performance. 

Foreign workers
Is a distinction drawn between local and foreign workers?

Nationals who are not part of the European Economic Area (EEA) must obtain residence permits and work permits. Once a permit has been granted, Austrian law does not distinguish between local and foreign workers.

To the contrary, Austrian legislation on anti-wage dumping clarifies that non-EEA nationals must not be discriminated against in terms of salary or working conditions.

Recruitment

Advertising
What are the requirements relating to advertising positions?

Job ads must state the minimum wage under the collective bargaining agreement applicable to the position and indicate that the future employer is prepared to pay above the minimum wage (if accurate).

Ads cannot be discriminatory.

Background checks
What can employers do with regard to background checks and inquiries in relation to the following:

(a) Criminal records?

No express statutory restrictions prohibit employers or third parties from performing background checks. However, testimonials cannot contain details that might hamper an employee’s job prospects. This prohibition indirectly affects this process, as former employers cannot provide negative information to prospective employers. It is common for job applicants to provide employers with a criminal record certificate (certificate of good standing). Further, human resources reports often provide insightful background information on applicants.

Employers commonly request a criminal record certificate from job applicants. These certificates do not show criminal convictions that have already been expunged from the official database. Convictions for minor offences (ie, jail terms of no more than three months or equivalent) are also not shown in the certificate.

Job applicants need not answer truthfully with respect to previous convictions, unless the conviction has not yet been expunged from the criminal record and concerns a criminal offence that could raise reasonable doubts regarding the applicant’s capacity to perform his or her job without adversely affecting the employer’s legitimate interests (eg, where a sexual offender applies for a teaching job or a fraudster applies for a job as a bank teller).

(b) Medical history?

Certain regulations require that job applicants provide employers with their medical history (eg, airline staff). Otherwise, job applicants generally need not disclose their medical history, unless an illness or injury would result in a permanent incapacity to work. During periods of sick leave, employers can request a certificate from a medical doctor regarding the employee’s incapacity to work; however, these certificates cannot include the employee’s diagnosis.

No statutory restrictions prohibit employers from requiring a medical examination as a condition of employment. Although uncommon in Austria, an employer can theoretically refuse to hire an applicant who refuses to submit to a medical examination, unless this is tantamount to discrimination under the Equal Protection Act.

(c) Drug screening?

No specific restrictions exist. Employers can refuse to hire an applicant who does not submit to an examination. Certain positions (eg, airline staff, train drivers and certain medical positions) require mandatory drug testing.

(d) Credit checks?

Depending on the circumstances, employers can perform credit checks or request that job applicants answer truthfully regarding their financial situation. Ongoing insolvency proceedings in relation to an employee or wage and salary seizures can have a negative impact on an employer’s reputation. In addition, positions that involve the diligent handling of finances (eg, managerial positions at banks and insurers) can give rise to an employer’s legitimate right to enquire about a job applicant’s financial situation.

(e) Immigration status?

In accordance with Austria’s immigration legislation, prospective employers cannot employ applicants without residence and work permits. Therefore, checks on the immigration status of job applicants and employees are legitimate.

(f) Social media?

Employer monitoring of job applicants’ social media presence is a widely used and lawful tool to verify statements made in applications and learn more about applicants’ personalities.

(g) Other?

Questions regarding military service or mandatory civil service must be answered truthfully.

Job applicants can refuse to answer (or answer incorrectly) any questions pertaining to pregnancy and their desire to have children. 

Wages and working time

Pay
Is there a national minimum wage and, if so, what is it?

Minimum wages are typically set by collective bargaining agreements and depend on:

  • the classification of the position, based on qualifying criteria within the relevant collective bargaining agreement; and
  • the employee’s length of previous employment.

Collective bargaining agreements apply to foreign employees working in Austria. However, no national minimum wage exists, with some exceptions (eg, the minimum wage for apprentices); as such, salary and wages in certain sectors can be negotiated freely. Most employees are covered under applicable bargaining agreements and benefit from the minimum wages set out therein. 

Are there restrictions on working hours?

Under the Working Time Act, the regular maximum working hours are 40 hours per week and eight hours per day. Overtime must not result in working time of more than 10 hours per day or 50 hours per week. The act allows those limits to be increased to 13 hours per day and 60 hours per week if specific working time models apply (eg, models including standby time). With effect from January 1 2016 the maximum daily working time can also be increased from 10 to 12 hours in case of increased travel times.

Hours and overtime
What are the requirements for meal and rest breaks?

Under the Working Time Act, a meal and rest break of at least 30 minutes must be granted after at least six hours of work. Meal and rest breaks do not count as working time. Breaks must be at a time either elected by the employee or foreseeable to him or her.

How should overtime be calculated?

Employees working overtime are entitled to overtime pay, unless already compensated by way of an all-inclusive salary. If not already compensated through a higher salary, overtime can be compensated by way of extra time off or through overtime pay. Overtime pay is calculated as the employee’s average hourly pay, plus 50%; this increases to 100% for night and weekend shifts. Many collective bargaining agreements grant higher supplements (eg, 150%).

What exemptions are there from overtime?

Pregnant employees must not work overtime, night shifts or on weekends. There is no general obligation to work overtime. However, if there is an operational emergency, employees must work overtime if required to avert any damage to their employer. This general obligation stems from employees’ fiduciary duties.  

Is there a minimum paid holiday entitlement?

The Holiday Act provides for 30 working days (weekdays from Monday through Saturday) of annual holiday for full-time employees. After 25 years of service, this period is extended to 36 working days of annual holiday. These entitlements translate to five weeks and six weeks of holiday, respectively. Additionally, employees are entitled to 13 public paid holidays. The full entitlement to annual holiday accrues after six months of service with an employer. Before this six-month period has elapsed, employees are entitled to two and a half days of holiday for each month of employment. Employers and employees must reach an agreement on holiday periods.

What are the rules applicable to final pay and deductions from wages?

Employment income is subject to income tax (to be withheld by the employer) and social security contributions (to be paid by both the employer and employee). The income tax rates are as follows (after deductions for social insurance and deductible expenses):

  • up to €11,000 – 0%;
  • between €11,001 and €18,000 – (income - 11,000) x 25%;
  • between € 18,001 and € 31,000 – (income – 18,000) x 35 %;
  • between €31,001 and €60,000 – (income – 31,000) x 42%;
  • between €60,001 and €90,000 – (income – 60,000) x 48%;
  • between €90,001 and €1,000,000 – (income – 90,000) x 50 % and
  • above €1 million – (income –1 million) x 55%.

Social security contributions depend on an employee’s income level. Above a marginal level of €415,72 per month (2016), income is subject to social security contributions at a rate of 37.75% (of which the employer pays 20.68%).

Record keeping
What payroll and payment records must be maintained?

The statutory retention period for payroll records (including salary and bonuses) is seven years, if tax related. This applies with respect to wage withholding tax, social security contributions and tax-exempt reimbursements.

Discrimination, harassment & family leave

What is the position in relation to:
Protected categories

(a) Age?

Under the Equal Protection Act, employees may not be discriminated against on the basis of age. Both direct and indirect discrimination are prohibited.

Protection against discrimination covers all aspects of the working relationship, including:

  • recruitment and assessment;
  • access to employment, promotions and assignments;
  • professional training;
  • working conditions;
  • termination; and
  • payment terms. 

(b) Race

Under the Equal Protection Act, employees may not be discriminated against based on their racial or ethnic origin. Both direct and indirect discrimination are prohibited.

Protection against discrimination covers all aspects of the working relationship, including:

  • recruitment and assessment;
  • access to employment, promotions and assignments;
  • professional training;
  • working conditions;
  • termination; and
  • payment terms. 

(c) Disability?

As of January 1 2006, the Equal Protection Act prohibits discrimination based on disability.

Additionally, under the Employees with Disabilities Act, employers must make reasonable adjustments for disabled employees not only with respect to business premises, but also in relation to their capabilities and experience. The act makes it compulsory for employers to employ one disabled employee for every 25 employees or, alternatively, choose to pay a monthly fee of between €251 (for businesses with between 25 and 99 employees) and €374 (for businesses with at least 400 employees).

Disabled employees are also afforded special protection against dismissal if their disability results in a 50% decrease in their capacity to work. In such cases, dismissal requires the previous consent of a special agency established under the Ministry of Social Affairs.

(d) Gender?

Under the Equal Protection Act, employees may not be discriminated against based on their gender. Both direct and indirect discrimination are prohibited.

Protection against discrimination covers all aspects of the working relationship, including:

  • recruitment and assessment;
  • access to employment, promotions and assignments;
  • professional training;
  • working conditions;
  • termination; and
  • payment terms.

(e) Sexual orientation?

Under the Equal Protection Act, employees may not be discriminated against based on their sexual orientation. Both direct and indirect discrimination are prohibited.

Protection against discrimination covers all aspects of the working relationship, including:

  • recruitment and assessment;
  • access to employment, promotions and assignments;
  • professional training;
  • working conditions;
  • termination; and
  • payment terms.

(f) Religion?

Under the Equal Protection Act, employees may not be discriminated against based on their religion or beliefs. Both direct and indirect discrimination are prohibited.

Protection against discrimination covers all aspects of the working relationship, including:

  • recruitment and assessment;
  • access to employment, promotions and assignments;
  • professional training;
  • working conditions;
  • termination; and
  • payment terms.

(g) Medical?

Where a medical condition amounts to a ‘disability’ under the broad definition set out in the Employees with Disabilities Act, employees are afforded statutory protection against dismissal.

(h) Other?

N/A.

Family and medical leave
What is the position in relation to family and medical leave?

Sick leave

The Employee Act requires employers to provide at least six weeks of paid leave for any serious health condition (illness or injury). This period may be extended to 12 weeks, depending on seniority or if the illness or injury was caused by a work accident. After this period, an employee is entitled to 50% of his or her full pay for another four weeks. An employee will not be covered if his or her serious health condition was caused by his or her recklessness or gross negligence. If an employee falls ill within six months of previous sick leave, sick pay will be reduced to 50% of his or her full entitlement, if the previous sick leave exceeded the statutory six-week minimum (or any longer period up to 12 weeks).

The full sick pay allowance is equal to the employee’s regular pay. Once the full sick pay allowance is reduced to 50% or less, the employee can claim state incapacity benefits. Time off due to a health condition is unrestricted, although continued periods of sickness entitle the employer to terminate the employment relationship. Entitlement to sick leave and sick pay accrues at the start of employment. However, full entitlement to sick pay is restricted to six weeks (or up to 12 weeks based on seniority) per year.

Employees may take up to two weeks of paid time off per year in order to provide medical care to a close relative (eg, spouse, civil partner or child).

Parental leave
The Maternity Leave Act and Paternity Leave Act allow the parents of a newborn child to take parental leave alternately or exclusively until the child’s second birthday. Thereafter, both parents can request to change from full-time to part-time employment until the child’s seventh birthday. During parental leave, employers are not obliged to pay the employee’s salary, but he or she is entitled to a government allowance, which varies according to the duration of the leave and his or her salary.

Nursing leave
Employees, both male and female, can request up to one week of nursing leave during each working year in order to:

  • care for a sick relative living in the same household;
  • care for a biological, adopted or foster child, or the biological child of the employee’s husband, wife, civil partner or domestic partner living in the same household; or
  • accompany a sick biological, adopted or foster child, or the biological child of the employee’s husband, wife, civil partner or domestic partner living in the same household, if inpatient treatment in a hospital is needed and the child is under 10 years old.

An employee may request an additional week of nursing leave within the same working year if he or she:

  • has already taken his or her initial week of nursing leave;
  • cannot resume work because he or she must care for a sick child (biological, adopted or foster) under 12 years old who lives in the same household, or the biological child of his or her husband, wife, civil partner or domestic partner who lives in the same household; or
  • has no other statutory or mandatory entitlement (eg, under applicable collective bargaining agreement) providing for continued pay.

An employee may use accrued holiday to care for a child younger than 12 years old if his or her entire two-week nursing leave entitlement has already been used for such purpose.

Family care leave and family care part-time employment 
Employees can request family care leave/part-time employment in order to look after an ill family member. Family care leave/part-time employment can be used only to care for a close family member who is receiving a certain level of Austrian care allowance (known as ‘pflegegeld’).

Family care leave/part-time employment requires a mutual agreement between the employer and employee, stating the start date, duration and scope of the leave or part-time employment. Further, the employee must have been employed with the employer for a minimum of three months before the start date of the leave or part-time employment. Family care leave/part-time employment must have a minimum duration of one month, with a maximum duration of three months. It must be taken as a single leave period and the employee must work a minimum of 10 hours per working week.

Medical appointments
Reasonable time off will be granted for necessary visits to the doctor, dentist and hospital. However, employees must arrange appointments at times which will cause the least disruption to their work or department and give reasonable notice, unless the appointment is an emergency.

Harassment
What is the position in relation to harassment?

Harassment is considered discrimination under the Equal Protection Act and is thus prohibited.

A harassed employee can request adequate damages of at least €1,000 as compensation.

Whistleblowing
What is the position in relation to whistleblowing?

Austrian law has no general statutory protection for whistleblowers. No case law on this issue exists.

Legal scholars hold that whistleblowing can amount to a ‘control measure’, as defined in the Labour Relations Act. Therefore, if an employer wishes to establish a whistleblowing system, it must obtain the consent of the relevant works council or, absent an elected representative, its employees.

The Data Protection Agency has ruled on several aspects of whistleblowing hotlines, as they typically involve the collection of personal data and the transfer of such data to third parties in and outside the European Union (eg, the United States). The Data Protection Agency will approve the implementation of whistleblowing hotlines only with the consent of the relevant works council or employees. The agency has yet to clarify whether the provision of technical devices by an employer or employer initiatives to report violations of law qualify as a control measure. In effect, the Data Protection Agency is claiming jurisdiction over the Austrian labour courts on the issue of consenting to control measures.

Recent legislation (ie, the Banking Act) has introduced whistleblowing regulations to the banking sector. 

Privacy in the workplace

Privacy and monitoring
What are employees’ rights with regard to privacy and monitoring?

Employers that wish to monitor or control employees in the workplace must obtain prior approval from the relevant works council or, absent a works council, the consent of each affected employee if the control measure relates to human dignity. Where a control measure would effectively violate human dignity (eg, ongoing video surveillance), it will be prohibited, regardless of any consent given by the works council or employees.

To what extent can employers regulate off-duty conduct?

The Employment Protection Act contains several regulations regarding safety in the workplace and prohibits employees from working under the influence of alcohol, medication or drugs if these pose a health risk to their co-workers. The Labour Inspectorate can fine employees for non-compliance. Similar rules apply with respect to construction workers.

No other specific rules regulate off-duty conduct. As a rule, employees’ privacy usually trumps regulations concerning off-duty conduct. Where off-duty conduct shows a reckless disregard for an employer’s legitimate interest, it can be prohibited by the employer or, in more egregious cases, result in dismissal (eg, a news report about a manager driving under the influence).

Are there rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?

No specific rules protect social media passwords or the monitoring of social media accounts.

Employers can prohibit the private use of email and the Internet in the workplace. Employers can also request that private email correspondence be marked as ‘private’, stating that correspondence not marked as such can be accessed freely by the employer. However, if an employer becomes aware that unmarked emails contain private messages, it must refrain from inspecting them. Requesting passwords for social media accounts amounts to a breach of privacy.

Trade secrets and restrictive covenants

Intellectual Property
Who owns IP rights created by employees during the course of their employment?

Under the Patent Act, without an agreement to the contrary, an employee owns whatever he or she invents during his or her employment. An employee can agree to transfer ownership rights in connection with patentable inventions to his or her employer. However, transfers are restricted to inventions that are made within the normal scope of the employer’s business and where the employee made the invention aided by the employer’s resources and research tools and within the scope of his or her job description. Patent assignments and the transfer of inventions are thus limited in scope, and employees are entitled to fair compensation.

Restrictive covenants
What types of restrictive covenants are recognised and enforceable?

Austrian law permits employers and employees to agree to restrictive covenants.

Under Section 7 of the Employee Act, an employee cannot perform any competing activity during employment without the consent of his or her employer. Any breach of this requirement is cause for summary dismissal.

Restrictive covenants pertaining to post-termination periods are unenforceable if:

  • the employer unilaterally terminated the employment relationship and provided appropriate notice (not applicable to summary dismissal); or
  • the employee terminated the employment relationship with immediate effect due to a breach of contract by the employer.

In the case of termination, an employer can still enforce a restrictive covenant by offering to pay the employee’s full salary during any restrictive period. In all other cases (eg, where the employee resigns without cause), non-compete clauses are enforceable and employers need not offer to pay the employee’s salary during the restrictive period. 

Non-compete
Are there any special rules on non-competes for particular classes of employee?

After termination, the use of restrictive covenants must:

  • not exceed 12 months;
  • relate only to activities in the employer’s industry or trade; and
  • be reasonable and not place undue hardship on the employee’s job prospects in terms of time and geographical area, in light of the legitimate business interests of the employer.

Employees can consent to post-termination restrictive covenants only if they are of legal age and earning at least €3,240 per month. Junior office staff and part-time employees usually do not meet these criteria.

Discipline and grievance procedures

Procedures
Are there specific laws on the procedures employers must follow with regard to discipline and grievance procedures?

Disciplinary and grievance procedures and performance management procedures are not mandatory under Austrian law. Some collective bargaining agreements contain rudimentary disciplinary procedure models; however, without a provision in the collective bargaining agreement, disciplinary procedures need not be introduced in the employment contract.

Disciplinary measures (ie, measures that are not only corrective, but also punitive in nature) can be implemented only by way of a plant agreement concluded with the relevant works council. Verbal warnings and investigations into grounds for dismissal are not disciplinary measures, but refusal to promote an employee or award a pay rise are considered disciplinary measures that require the works council’s consent. 

Industrial relations

Unions and layoffs
Is your country (or a particular area) known to be heavily unionised?

By law, unionisation and establishment of a works council are distinct legal concepts. Members of the works council need not be labour union members. Regardless of the union affiliation of the works council’s members or employees, the works council represents the entire staff.

There is a higher level of unionisation in production businesses, with less unionisation in the various service sectors.

What are the rules on trade union recognition?

Austria has one major trade union – the Association of Trade Unions (ÖGB) – which is the umbrella organisation of all Austrian labour unions. The ÖGB can conclude collective bargaining agreements on behalf of employees. Historically, Austrian trade unions (now combined under the ÖGB umbrella) have been established as associations under the liberal regulations on establishing associations and the constitutional right to freedom of assembly. Once established, trade unions can conclude collective bargaining agreements by way of a government decree under the Labour Relations Act. The collective bargaining agreements concluded by unions also govern the employment relationships of employees without union membership and usually cover entire sectors of industry, service or craft (as opposed to a single company or geographical area). For instance, the same collective bargaining agreement applies to metalworkers in Vienna and Tyrol.

What are the rules on collective bargaining?

Collective bargaining agreements are concluded between employees and employer associations or representative bodies legally authorised to engage in collective bargaining. The Chamber of Commerce usually negotiates on behalf of employers. By establishing a business and conducting any type of professional activity within the meaning of the Trade Act, employers become – by operation of law – members of the Chamber of Commerce, which in turn determines their affiliation with a specific collective bargaining agreement. Labour unions (under the ÖGB umbrella) negotiate on behalf of employees in a certain sector.

Collective bargaining agreements are usually concluded for entire business sectors, not just individual companies. Collective bargaining agreements not only introduce minimum wages, but also regulate other legal entitlements which are more beneficial to employees than the relevant statutory regulations. At the plant level, employers and works councils can conclude plant agreements in relation to aspects of the employment relationship that are specifically assigned by statute or a collective bargaining agreement.

Termination

Notice
Are employers required to give notice of termination?

Employers must observe contractual notice terms or, in the absence of agreed notice terms, the default notice regulations implied by law (or the relevant collective bargaining agreement). The minimum notice period is six weeks. The notice period increases in tandem with seniority, up to five months after 25 years of service.

Redundancies
What are the rules that govern redundancy procedures?

Once a works council has been established, an employer must notify it of any planned dismissals. The works council has one week to react by:

  • expressly consenting;
  • expressly dissenting; or
  • not commenting.

If the works council expressly dissents, it can contest the dismissal on behalf of the employee as unfair or in breach of considerations of social reasonableness. If the works council remains silent, the employee can still contest the dismissal on the same grounds. Should the works council expressly consent to the dismissal, the employee cannot appeal on the grounds of breach of considerations of social reasonableness, but may still challenge the dismissal by bringing an unfair dismissal claim. If the employee wins, the court will order the employee’s reinstatement.

Apart from this notification requirement, no other formal redundancy procedures exist. In particular, an employer need not provide a reason for terminating an employee. The grounds for dismissal are considered only if the employee challenges the termination based on a lack of social justification, discrimination or otherwise.

Are there particular rules for collective redundancies/mass layoffs?

Mass terminations require prior notification to the appropriate government employment agency, which triggers a 30-day waiting period during which any termination is invalid. Employers must consult with the relevant works council and discuss measures in order to avoid dismissals, reduce the number of redundancies and mitigate the consequences of collective dismissals with a view to reaching an agreement on a so-called ‘social plan’ (ie, a collective agreement at the facility level between the works council and employer). A social plan must be concluded where roughly one-third of the employees are affected by the planned measures. In the absence of an agreement on the terms of a social plan, both the employer and works council can call on the special Labour Court Tribunal.

Labour unions usually conduct negotiations on behalf of or jointly with the works council in order to receive financial and non-financial benefits (eg, voluntary severance pay, outplacement assistance, specific pension schemes for older employees and personnel counselling).

Protections
What protections do employees have on dismissal?

A dismissal need not be for cause, but employers must give prior notice under either the contractual notice terms or, in the absence of agreed notice terms, the minimum statutory notice terms or those set out in the applicable collective bargaining agreement. Employers need not observe notice terms if an employee is dismissed for cause.

The following categories of employee enjoy special statutory protection against dismissal:

  • pregnant women;
  • parents on maternity or paternity leave;
  • members of the works council;
  • apprentices;
  • disabled employees; and
  • employees on military leave.

These types of employee may be dismissed only on grounds defined by law and with the prior approval of the Labour Court or the Disabled Employees Committee. All employees in businesses with five or more employees are afforded general protection against dismissal if the termination has no sufficient social justification.

Courts/tribunals

Jurisdiction and procedure
Which tribunals or courts have jurisdiction to hear complaints?

The enforcement of employment statutes mainly rests with the judiciary. Administrative agencies – in particular, the Labour Inspectorate, which can enter working premises at any time without notice – come into play in relation to the enforcement of occupational safety laws, hours of service laws and other regulatory aspects of employment in the workplace. 

What is the procedure and typical timescale?

Labour disputes generally follow the rules on civil procedure. Following a complaint, the defendant can file a reply brief and the court will set a date for the first hearing (usually within two to four months of the complaint). The first hearing involves settlement talks only. If talks fail, a discussion of the facts and the required evidence will be held. Following this first preparatory court hearing, one or more hearings are scheduled to hear witnesses and present further evidence. The typical timescale for a relatively straightforward case is as follows:

  • first-instance decision – one year;
  • appellate court decision – a further six to 12 months; and
  • Supreme Court decision – a further six to nine months.

Appeals
What is the route for appeals?

Appeals from any of the general or specialised district courts are heard by one of the four appellate courts located across Austria (Vienna, Linz, Graz and Innsbruck). A panel of three judges decides the appeal. Both the plaintiff and defendant can appeal a first-instance decision. Appeals must be filed within four weeks of receipt of the written decision. The opposing party has four weeks to file a brief in reply of the appeal.

The Supreme Court may be asked to review judgments rendered by the appellate courts if certain legal requirements are met, taking into consideration whether the review of the legal doctrine applied in a specific case requires uniform clarification or is of significant legal importance. The appellate courts and the Supreme Court specialise in employment matters.