By Walter Pöschl & Isabel Firneis, Wolf Theiss
Austrian employment law has historically treated “blue collar” (manual workers) and “white collar” (office workers) workers differently. Each category of employee is currently subject to different rules in important areas of employment law, leading in general to more unfavourable treatment of blue collar workers.
Due to recent technological advancements and the shift from simple manual labour to highly skilled technical work, the differentiation between these two categories of employees seems outdated and has been significantly scrutinised in the last few years. This discussion was recently picked up by the Austrian parliament which, at least in part, has decided that these two categories of worker should be treated more equally, particularly in the following areas.
The first important change in law, which will take effect on 1st July 2018, concerns continued remuneration in case of sickness (sick pay). Under current law, both blue and white collar workers have the following entitlements (depending on their length of service with the same employer):
- up to 5 years’ service – full pay for 6 weeks and half pay for an additional 4 weeks;
- between 5 and 15 years’ service – full pay for 8 weeks and half pay for an additional 4 weeks;
- between 15 and 25 years of service – full pay for 10 weeks and half pay for an additional 4 weeks;
- 26 years of service or more – full pay for 12 weeks and half pay for an additional 4 weeks.
There are, however, several differences between each category of worker, such as different reference periods for acquiring new claims and additional full sick pay entitlement for blue collar workers in case of work accidents or occupational diseases.
The new regime not only harmonises these differences but also changes the existing regulations for both categories of worker, leading to a simplification of the sick pay rules such that both categories of worker will be entitled to full sick pay for eight weeks from the second year of service onwards while the rest of the entitlements remain unchanged.
Termination of employment
Another important change in law will affect the termination of employment. Statutory notice periods for white collar workers currently range from six weeks to five months depending on their length of service. For blue collar workers, on the other hand, notice periods for (regular) dismissal mainly depend on the applicable collective bargaining agreement (“CBA”). In some business sectors the applicable CBAs only provide for extremely short notice periods; some as short as one week or even one day.
The new laws will extend the notice periods for blue collar workers to mirror those applicable for white collar workers. Whilst this brings greater protection for blue collar workers, due to the prolonged notice periods, employers are facing increased costs for terminating employment relationships with blue collar employees. To soften this impact on employers, the change in law will only take effect from 2021 and will provide certain exemptions, such as for seasonal work.
Whilst the legislator has taken steps to harmonise employment rights between the different category of workers, it has however missed the opportunity to create full parity between blue collar and white collar workers. Different sets of rules will remain applicable in many areas of the employment relationship, including core rights such as the ability to immediately dismiss the employee for good reason. Further, in many business sectors different CBAs for blue collar and white collar workers exist, leading to a difference in fundamental rights such as minimum wages, which are in general significantly lower for blue collar employees.
It is uncertain to what extent and when the remaining difference in treatment of blue and white collar workers will be completely put to an end.