Termination of employment

Grounds for termination

May an employer dismiss an employee for any reason or must there be ‘cause’? How is cause defined under the applicable statute or regulation?

Immediate dismissal without observing notice periods is only possible for cause. ‘Cause’ can be anything that makes continued employment until the next termination date justifiably unacceptable for the employer.

Notice

Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice?

Should there not be cause for dismissal, notice is mandatory. Pay in lieu of notice is not possible.

In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?

Immediate dismissal is possible for cause. Cause for dismissal can be anything that makes continued employment until the next termination date justifiably unacceptable for the employer (eg, theft, falsified time records).

Severance pay

Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?

Employment relationships that started prior to 2003 are subject to the Old Severance Payment Scheme. Such employees are entitled to severance pay upon termination of employment (if they did not terminate themselves). Severance pay is calculated as a multiple of the monthly salary and depends on the years of service (12 monthly salaries after 25 years of service).

Employees who started in 2003 or later are not entitled to severance pay as such, but the employer pays 1.53 per cent of their monthly gross salary to a fund. Any payment claims have to be determined between that fund and the employee.

Procedure

Are there any procedural requirements for dismissing an employee?

If a works council is established, it has to be informed at least one week prior to termination. Failure to comply results in the invalidity of the termination.

Mass terminations have to be notified to the labour market agency at least 30 days prior; any termination within that 30-day period is invalid.

Employee protections

In what circumstances are employees protected from dismissal?

Austrian law stipulates a number of circumstances in which an employee enjoys special protection against termination. The most relevant are employees on maternity leave or parental part-time, works council members, disabled employees (degree of disability of at least 50 per cent) and employees on military or civil service.

Mass terminations and collective dismissals

Are there special rules for mass terminations or collective dismissals?

Mass terminations have to be notified to the labour market agency at least 30 days prior; any termination within that 30-day period is invalid.

Class and collective actions

Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?

For the most part, there are no class or collective actions in Austrian employment law. A works council can, however, demand a ruling on the existence or non-existence of rights if those rights concern at least three employees.

Mandatory retirement age

Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?

It is, in general, possible to terminate employment upon reaching the statutory retirement age (currently 65 years). However, in specific cases, this could be construed as age discrimination, for which reason a case-by-case assessment is recommended.