A new law with the view to establish equality between Blue Collar Employees and White Collar Employees has been promoted in the media effectively shortly before the Austrian parliament election in October. Does the new law provide equality? It is appropriate to take a closer look at the regulations.

1. Amendments / Establishment of Equality

Actually, the new law provides equality between Blue Collar Employees and White Collar Employees in two important aspects of labour law, namely with regard to continued remuneration in case of incapacity or other justified absence from work and with regard to notice periods for the termination of employment.

1.1 Continued Remuneration

At present, an employee is entitled to continued remuneration by the employer in full amount for a duration of six weeks. This was harmonized for Blue Collar Employees and White Collar Employees already in the past. The entitlement rises to eight weeks (for both groups) after five years of service, to ten weeks after 15 years of service and to 12 weeks after 25 years of service. For additional four weeks, an employee is entitled to continued remuneration at half of its amount – this remains unaltered.

According to the new law, Blue Collar Employees and White Collar Employees will be entitled to continued remuneration in full amount for a duration of eight weeks after the first year of service. The rest of the echelon remains the same. Precisely, this is not a “new” harmonization – the provisions change equally for Blue Collar Employees and White Collar Employees.

Employees will in addition be entitled to continued remuneration in case of sickness or accident also in case of a mutual agreement on the termination of the employment relationship beyond the ending date.

For White Collar Employees any and all times of absences from work within one year will be cumulated now, which constitutes a deterioration as the accumulation was in general made in six months cycles in the past.

The provisions on work accidents and occupational diseases will be harmonized in future. It is clarified that the entitlement to continued remuneration in case of a work accident or an occupational disease is being handled separately from “normal” times of justified work absences also for White Collar Employees – as already has been the case in the past for Blue Collar Employees.

Further, Blue Collar Employees will mandatorily be entitled to continuation of remuneration for times of work absences for “other good causes” (e.g. marriage, death of a relative, etc.) in the future – as already has been the case for White Collar Employees in the past. Collective Bargaining Agreements may not provide any more for less favourable rules.

Apprentices will be entitled to continued compensation in case of sickness or accident for a duration of eight weeks (instead of four weeks) in full amount and for a further four weeks (instead of two weeks) at half of the amount. 

1.2 Notice Periods

Blue Collar Employees are presently subject to shorter notice periods (regularly two weeks) compared to White Collar Employees. This will be harmonized. As a consequence, the notice periods also for Blue Collar Employees will range from six weeks to five months, depending on the years of service – the same as for White Collar Employees. As already has been the case for White Collar Employees, an employment relationship can be terminated by giving notice with effectiveness at the end of each calendar quarter, whereby possible ending dates at the 15th or last day of each calendar month can be agreed upon.

The (new) notice periods will apply also to part time employees, who work less than a fi fth of the maximum normal weekly working time (i.e. less than around 8 hours per week). This is new (also for White Collar Employees).

As a consequence of the new provisions with regard to notice periods, deviating regulations in collective bargaining agreements that are less favourable become void. According to the Austrian Chamber of Commerce (WKO), more than 300 collective bargaining agreements are affected.

1.3 Transitional Provisions

In general, the new provisions with regard to continued remuneration will come into force with eff ect from 1 July 2018 and the new regulations on notice periods for Blue Collar Employees with effect from 1 January 2021. However, White Collar Employees working part time (less than about 8 hours per week) are already subject to the new notice periods in case of a notice declaration after 31 December 2017. In industry sectors predominated by seasonal businesses, collective bargaining agreements may stipulate deviating notice periods for Blue Collar Employees even beyond 2021 (this primarily affects sectors, for which short term notices are given regularly, like e.g. the building sector or tourism).

2. Unequal Treatment

In many – also important – areas, the new law does not provide for equal treatment:

2.1 Terminology of “employee”

Conspicuously, the new law does not provide for harmonization in terms of terminology and adheres to the “old” categories “Blue Collar Employees” and “White Collar Employees”. In particular, this has an impact on the collective bargaining agreements and the works councils (see points 2.2 and 2.3).

2.2 Collective Bargaining Agreement

There are different collective bargaining agreements in place for Blue Collar Employees and for White Collar Employees in many industry sectors, which generally provide – among other inequalities – significantly lower salary schemes for Blue Collar Employees. There will be no changes with this regard due to the adherence to the “old” categories (“Blue Collar Employees” and “White Collar Employees”).

2.3 Works Council

Generally, different works councils for Blue Collar Employees and for White Collar Employees will continue to exist as a consequence of the old categorisation. Such different treatment and representation cannot be understood as equality and will maintain the increased administrative burden.

2.4 Prohibition of Competition

The difference in the legal concept of the prohibition of competition during the employment for Blue Collar Employees and for White Collar Employees remains unchanged. Due to the deviating and partly very vague wording of the provisions, employers still face many uncertainties when applying the provisions on Blue Collar and White Collar Employees.

2.5 Dismissal with Immediate Effect 

In particular with regard to the reasons for a dismissal with immediate effect, there are (major) differences, which appear outdated and anachronistic. For example, untrustworthiness as a reason for a dismissal with immediate effect for Blue Collar Employees refers to criminal offences (like e.g. theft, embezzlement or the like), which is not the case for White Collar Employees in this strict form. Further, the law provides outdated and from todays view unintelligible grounds for dismissal with immediate effect for Blue Collar Employees as e.g. “deterrent diseases”. Moreover, a Blue Collar Employee can be dismissed with immediate effect in case he is arrested for more than 14 days. The mere old-fashioned diction of the legal provisions would justify amendments.

2.6 Occupational Disability / Invalidity

The difference in treatment for Blue Collar Employees and White Collar Employees in case of inability to work due to disability/invalidity is being maintained due to the adherence of the differentiation in terminology (regulations on occupational disability for White Collar Employees and on invalidity for Blue Collar Employees).

3. Résumé

With the Law as agreed upon in parliament on 12 October 2017, the notice periods for Blue Collar Employees were aligned with the longer periods for White Collar Employees. As far as continued payment is concerned, a prolongation of the payment by employers has been decided for both, Blue and White Collar Employees. Nevertheless, there still exist several different laws and regulations for Blue and White Collar Employees within other areas.

A transitional period of about 3 years is provided for as regards the new notice periods for Blue Collar Employees so that they have to be observed as of 1 January 2021. It remains to be seen whether at least during this period compensatory measures will be implemented as a relief for employers on the other side.