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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.

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