Employment 2021 Austria: Law & Practice Jakob Widner and Axel Guttmann Graf Isola Rechtsanwälte GmbH
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Definitive global law guides offering comparative analysis from top-ranked lawyers Employment 2021 Austria: Law & Practice Jakob Widner and Axel Guttmann Graf Isola Rechtsanwälte GmbH practiceguides.chambers.com
AUSTRIA
Law and Practice
Contributed by:
Jakob Widner and Axel Guttmann
Graf Isola Rechtsanwälte GmbH see p.23
CONTENTS
1. Introduction p.3 6. Collective Relations p.13
1.1 Main Changes in the Past Year p.3 6.1 Status/Role of Unions p.13
1.2 COVID-19 Crisis p.3 6.2 Employee Representative Bodies p.14
6.3 Collective Bargaining Agreements p.15
2. Terms of Employment p.6
2.1 Status of Employee p.6 7. Termination of Employment p.16
2.2 Contractual Relationship p.6 7.1 Grounds for Termination p.16
2.3 Working Hours p.7 7.2 Notice Periods/Severance p.17
2.4 Compensation p.7 7.3 Dismissal For (Serious) Cause (Summary
2.5 Other Terms of Employment p.8 Dismissal) p.18
7.4 Termination Agreements p.18
3. Restrictive Covenants p.9
7.5 Protected Employees p.19
3.1 Non-competition Clauses p.9
3.2 Non-solicitation Clauses – Enforceability/ 8. Employment Disputes p.19
Standards p.10 8.1 Wrongful Dismissal Claims p.19
8.2 Anti-discrimination Issues p.20
4. Data Privacy Law p.10
4.1 General Overview p.10 9. Dispute Resolution p.20
9.1 Judicial Procedures p.20
5. Foreign Workers p.11
9.2 Alternative Dispute Resolution p.21
5.1 Limitations on the Use of Foreign Workers p.11
9.3 Awarding Attorney’s Fees p.22
5.2 Registration Requirements p.13
2AUSTRIA Law and Practice
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
1. INTRODUCTION short-time work scheme in March 2020, the
short-time work scheme is now already in its fifth
1.1 Main Changes in the Past Year phase. This fifth phase started on 1 July 2021
In the last 12 months, Austrian employment leg- and will last until 6 June 2022.
islation was foremost concerned with contain-
ing the consequences of the COVID-19 crisis for Like so many other furlough schemes across
the labour market, but also saw some legislative Europe, the model aims at reducing costs to
changes concerning the harmonisation of blue- employers while at the same time safeguarding
and white collar workers’ law and the voting age that lay-offs are avoided and the workforce is
for the works council. ready to support an economic recovery. From
employees’ perspectives, they retain their jobs
Harmonisation of Notice Periods and spending power, which helps to stimulate
When terminating an employment contract, the economy once the pandemic has subsided
employers have to observe different notice peri- and government measures seeking to contain
ods depending on the status of the employee the spread of the virus are lifted.
(blue-collar or white-collar worker). A new law
will harmonise the notice periods of blue-collar Eligibility
and white-collar workers. This adjustment was Generally, all employers are eligible to partici-
originally planned for 1 January 2021, but the pate, regardless of industry or type of workforce,
new law was postponed twice and shall now be with the exception of entities not pursuing pri-
applicable to terminations that occur after 30 marily economic purposes, such as political par-
September 2021. ties and certain other public or quasi-govern-
mental bodies.
Reduction of the Voting Age for Works
Councils Also, all types of employees are eligible for
The required age to stand as a candidate (“active support, including chief executive officers and
right to vote”) for the election in works coun- managerial personnel, apprentices and trainees
cils was reduced from 18 to 16 years. For more and also parents returning from parental leave
information on Austrian works councils see 6.2 of absence, provided they are insured under the
Employee Representative Bodies. General Social Security Act (ASVG) and earn
above the current marginal level of EUR460.66
1.2 COVID-19 Crisis per month.
COVID-19 legislation as explained here is fore-
most a temporary initiative by the Austrian gov- Contractual arrangements and proceedings
ernment, planned to be abolished by the time The so-called “social partners”, ie, the Cham-
the pandemic ends. ber of Commerce as the quasi-governmental
employer organisation, and the labour unions,
Short-Time Work play a decisive role in administering the short-
Introduction time scheme. Introduction of short-time work
Short-time work schemes were first introduced requires employers to sign a model agreement
in 1949, amended during the financial crisis in drafted by the social partners, which is then
2008 and 2009 and now again overhauled to counter-signed by the social partners and also
meet the requirements of both employers and those staff who are affected, whereby staff are
the workforce. Since the reintroduction of the
3Law and Practice AUSTRIA
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
represented by the works council, if such a rep- • monthly gross salary of up to EUR2,685, sal-
resentative body has been elected. ary + subsidy amount to 85% of previous net
salary;
The current fifth phase of the short-time scheme • monthly gross salary of more than EUR2,685,
will last for a maximum period of six months. salary + subsidy amount to 80% of previous
net salary.
During the term of the scheme and for a period of
one month thereafter (retention period), employ- Salaries above EUR5,370 are not eligible for
ers are prohibited from terminating any employ- allowances.
ment relationship concerning the operational
unit where short-time work has been introduced, Until the beginning of the fifth phase of the short-
regardless of whether all staff participate, unless time work scheme, the government refunded
terminations were prompted by the misconduct almost all the subsidies paid by the employer
of employees, in which case the employer had to their staff. Now, employers are refunded for
to hire a replacement. Mutual terminations also only 85% of the subsidies paid. An exemption
require replacement hires, unless the employee is made for businesses that were especially hit
was counselled by the Chamber of Employees by the pandemic, such as those that weren’t
or the union that a refusal to agree on a termi- allowed to operate, at all (eg, night clubs, hotels)
nation would hardly aggravate the employee’s or companies that saw a decline in turnover by
legal position. at least 50% since the start of the pandemic.
Reduced work hours, subsidies and net Continued Remuneration without
replacement rate Performance
From the fifth phase, employers are now more Short-time work schemes are not the only leg-
restricted in the possible work hour reduction: islative initiative that was introduced to mitigate
Previously, the employer could reduce work the consequences of the COVID-19 crisis.
hours up to 90%, whereas now employees
should work for at least 50% of their previous Employee quarantine
work time (30% in companies that were espe- Based on the Act on Epidemics, employees
cially hit by the pandemic). The allowance paid quarantined by health authorities are entitled
by employer to compensate for the resulting to continued remuneration by their employer,
shortfall in earnings is a flat rate that is stag- unless the need for a quarantine was prompted
gered on the basis of the employee’s salary level. by negligent conduct on the part of employee,
eg, infection with the virus due to travels in coun-
Employers therefore continue payment of sala- tries that were to be avoided under travel advi-
ries for work actually performed during reduced sories by the Austrian government. If expressly
work hours and, in addition, pay a subsidy which decreed by authorities, the employer can then
depends on the employee’s previous net salary/ request reimbursement for remunerations paid
month, as follows: during quarantine without the employee render-
ing any corresponding services.
• monthly gross salary of up to EUR1,700, sal-
ary + subsidy amount to 90% of previous net Childcare in the case of sickness
salary; A parent can apply for care leave of up to one
week if their child suffers from COVID-19.
4AUSTRIA Law and Practice
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
Employers must afford continued pay during New legislation concerning the home office
such a leave period, and if childcare takes more In light of the COVID-19 pandemic and the sub-
than one week, the parent can take annual leave sequent lockdowns the need for some regulation
without requesting approval from their employer, regarding the concept of home office arose.
also triggering continued remuneration. Employ-
ers are not eligible for government subsidies There is now a legal definition of the term “home
under this scheme. office”, namely: “working in home office means
that the employee regularly performs work from
Business closures their home”. This includes both the home of the
The COVID-19 lockdown prompted closures of employee themselves, as well as the home of
retail, gastronomic and tourist outlets. A pan- “closely related persons”, but excludes other
demic-triggered lockdown would be classified places such as coffee shops or co-working-
as a force majeure incident by Austrian courts, spaces.
which would therefore have avoided an obliga-
tion to continued pay on the part of employers. The new law also constitutes that working from
New legislation changed this long-standing view home must be agreed between the employer
and now provides that employers carry the bur- and the employee in writing (although an agree-
den of continued pay, nonetheless. Employers ment is not invalid if it is not set forth in a written
can then request from their staff that all enti- document). The employer has to provide for the
tlements to paid leave accrued during previous necessary digital work equipment that is need-
holiday accrual periods, and also current enti- ed for home office work. It can also be agreed
tlements of up to two weeks, must be used up, that employees use their own devices while the
but not exceeding a total period of eight weeks. employer shall carry the cost.
Childcare due to school and pre-school Accidents that occur while working remotely, or
closings on the way from or to the home office (eg, from
Once pre-schools and schools were closed for the supermarket) are now classified as “acci-
educational purposes, school children were dents that occur during work” in terms of social
taught remotely at home and required paren- security law.
tal care. As a consequence, the Austrian gov-
ernment introduced a special care leave: an The law governing home office is not temporary,
employer can agree with the parent that a care but rather meant to survive the pandemic.
leave of up to three weeks can be taken if this
is necessary to care for children not older than Special paid leave for certain pregnant
14 years, or for near relatives in need of care. women
Employees have no entitlement to request this As the COVID-19 virus is especially dangerous
form of leave, but employers introducing the to pregnant women, a new law was enforced to
measure are entitled to a subsidy covering one protect pregnant women workers from becom-
third of the remuneration paid to employees dur- ing infected. Some pregnant employees now
ing the care period. can demand an early paid leave of absence from
the start of the 14th week of pregnancy if they
meet the following two conditions:
5Law and Practice AUSTRIA
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
• the pregnant employee must work at a job tions. According to settled case law, a freelance
where she has physical contact with other service contract is of a more relaxed nature
people (eg, retail personnel); and where discipline and oversight is concerned. The
• it must be impossible to change this work- “free” employee renders personal services for a
place (eg, by agreeing on remote work). definite or indefinite period of time, but without
being subjected to the same level of monitoring
This law will be in force until 30 September by the employer pertaining to working time and
2021, but might be extended beyond that date place of work. The freelance employee is also
(depending on the COVID-19 situation). integrated into the client’s business to a much
lesser degree than a “real” employee and usually
also has the right to have a replacement worker
2. TERMS OF perform the services owed under the contract.
EMPLOYMENT
Mandatory employment legislation seeking to
2.1 Status of Employee protect the “personally dependent” employee,
Blue-Collar/White-Collar such as provisions on notice periods (Employee
Employees are grouped into white-collar and Act), annual leave (Holiday Act), working time
blue-collar workers. According to the legal defi- (Working Time Act; Act on Rest Periods) and
nition, white-collar workers are employees who challenge of dismissals (Labour Relations Act)
are employed in the business of a merchant does not apply, nor do collective bargaining
primarily for the performance of commercial or agreements.
higher non-commercial services or for clerical
work, for example, office staff and sales staff. 2.2 Contractual Relationship
Blue-collar workers are said to perform “man- With regard to contractual relationships covering
ual” work of a kind that is less demanding of personal services, a distinction is made between
cognitive faculties, such as waiters, craftsmen, employment contracts, freelance contracts for
drivers, construction workers, and also soccer services and contracts for work (see 2.1 Sta-
players. The distinction between white-collar tus of Employee). The employment contract
and blue-collar workers has been considered need not be in writing; oral or also tacit/implied
anachronistic for a long time now, and, conse- employment contracts are legally valid. How-
quently, Austrian parliament has started a legal ever, the employer must provide the employee
initiative to harmonise the legal entitlements of with a written record of the essential rights and
both groups. Most recently, adjustments that obligations arising from the employment con-
have been made concern continued remunera- tract (service note – Dienstzettel), summarising:
tion during sick pay (2018) and harmonisation of
notice periods (2021) (see 1.1 Main Changes in • the name and address of the employer;
The Past Year). • the name and address of the employee;
• the start of employment;
Freelance Service Contracts • the termination date if the employment is
A distinction is made between contracts of fixed-term;
employment and freelance service contracts. • the notice terms;
Freelance contracts are not regulated by stat- • the general place of work, indication of alter-
ute, except for their inclusion as personal service nating work place;
contracts subject to social security contribu- • the job grade;
6AUSTRIA Law and Practice
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
• the job description; Employees are entitled to the following rest peri-
• the remuneration or salary; ods:
• the annual holiday entitlement;
• the hours of work; • 30 minutes’ rest (lunch break) if the total daily
• the applicable collective agreements; and working time exceeds six hours;
• the name and address of the outside sever- • 11 hours’ rest after the end of the daily work-
ance pay provider. ing time;
• 36 hours of weekend rest, including the whole
An employment contract can be concluded for of Sunday, starting on Saturday at 1pm; and
a fixed term or for an indefinite period. Under • 24 hours’ rest on public holidays.
settled case law, a succession of fixed-term
employment contracts is only permissible if eco- Part-Time Work and Flexitime
nomic or social reasons so require. Without such Part-time work is permissible and quite com-
an objective justification, consecutive short-term mon. An employee is working part-time if the
employments are deemed to be concluded for agreed weekly working time is, on average, less
an indefinite period of time. than the statutory normal working time. If part-
time employees exceed the agreed working
2.3 Working Hours time, they are entitled to a statutory overtime
Working Hours and Rest Periods bonus of 25%, or time off without a surcharge if
Working hours are regulated in the Working this time off is granted within the three months
Hours Act, the Working Hours Rest Act and following performance of the work.
collective-bargaining agreements. The daily
standard working time is eight hours, the weekly In recent years, flexitime agreements have
working time is 40 hours (some collective-bar- become increasingly popular, allowing employ-
gaining agreements provide for 38.5-hour work ees to determine the start and end of their daily
weeks). As soon as the normal working hours working hours within an agreed timeframe.
are exceeded, overtime is accrued, to be com- Where established, a flexitime arrangement
pensated with a statutory surcharge of 50%, or must be concluded with the works’ council in
time off at a ratio of 1 to 1.5. Many collective- written form (plant agreement).
bargaining agreements provide for higher com-
pensation, in particular for work on Sundays and 2.4 Compensation
public holidays, and also during night-time. “All Collective Bargaining Agreements
in” or flat-rate compensation schemes for over- Minimum wages are not mandated by statute,
time worked are permissible, if the employee, but by collective bargaining agreements, which
on average, receives at least the minimum wage cover approximately 99% of the Austrian work
under applicable bargaining agreements. The force. Recently, the social partners, who are the
statutory maximum daily work hours have been parties to collective-bargaining agreements, rep-
set at 12 hours and the weekly working time limit resenting all employers and the entire work force
at 60 hours. Also, the average weekly working of a specific trade or industry, have determined
time must not exceed 48 hours during a period that minimum wages under collective-bargaining
of consecutive 17 weeks. agreements must not fall below EUR1,500 pre-
tax per month (full-time).
7Law and Practice AUSTRIA
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
13th and 14th Salary Instalments; entitled to part-time work until the child’s sev-
Performance-Related Bonus; Stock Options enth birthday. The regular weekly working time
Special bonuses are also frequently agreed in must be reduced by at least 20%, but must not
collective-bargaining agreements, consisting be less than twelve hours. If the employer has
of a 13th and 14th salary instalment, usually fewer than 20 staff, or if the parent has not com-
termed “holiday pay” and “Christmas bonus”, pleted three years of service, and in the absence
taxed at only 6% and exempt from social secu- of a contractual solution, the employee can go
rity contributions. to court and seek to enforce a part-time model
that suits their needs for child care.
It is also increasingly common to agree on
performance-related bonus payments; there Sick Leave
are generally no statutory restrictions. Other Employees are entitled to continued pay in the
forms of remuneration include commissions and case of sickness or accident, payable by the
employee stock options. employer, unless their lack of capacity to per-
form services had been caused intentionally or
2.5 Other Terms of Employment with gross negligence. An employee is entitled
Holiday Entitlement and Pay to full remuneration for six weeks per year of
The statutory holiday entitlement is five weeks service, and as the length of service increases,
per year, increasing to six weeks after 25 years so does the entitlement, resulting in continued
of service. During annual leave, the employee is pay of 12 weeks after 25 years of service.
entitled to continued pay. Taking leave requires
an agreement between employer and employee, Following the full pay-entitlement, the employee
and, generally, neither has the right either uni- can additionally claim 50% of the salary for a
laterally to take leave or instruct that leave be period of four weeks.
taken.
Confidentiality
Maternity Leave Confidentiality obligations apply to business
Expectant mothers are prohibited from perform- and trade secrets which have become known
ing any work eight weeks before the expected to the employee during their professional activi-
date of birth and eight weeks (12 weeks in the ties. Under a theory of fiduciary duty, and in the
case of a Caesarian section) after giving birth. absence of an express clause in the employment
Instead of continued pay by their employees, contract, employees are solely bound by secre-
female employees receive a weekly allowance cy obligations during the term of their employ-
(Wochengeld) from the social security provider. ment relationship. It is possible and advisable,
Mothers and fathers are entitled to share paren- though, to agree on a far-reaching confidential-
tal leave up until their child’s second birthday, ity obligation in the contract that also survives
during which they are eligible to receive an termination. Such confidentiality obligations
allowance by the government. are also outside the scope of the rules on post-
termination non-competes and can therefore be
Parental Part-Time Employment concluded for periods exceeding one year. The
If a parent has already been employed for at least breach of the duty of confidentiality constitutes
three years with their employer (the two-year a ground for dismissal.
maternity leave does count against this period)
who employs more than 20 staff, he or she is
8AUSTRIA Law and Practice
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
In 2016, the EU issued a directive on the protec- 3. RESTRICTIVE
tion of trade secrets, which was transposed into COVENANTS
Austrian national law through an amendment of
the Act against Unfair Competition in 2018. The 3.1 Non-competition Clauses
directive provides for a uniform definition of the Statutory Non-compete during Employment
term “trade secret”, classifying it as information White-collar workers must neither operate an
which is secret, has a commercial value because independent commercial enterprise during their
it is secret, and has been subject to reasonable employment without the employer’s approval
steps by the employer to keep it secret. The nor conduct commercial transactions in the
measures for the protection of trade secrets are employer’s branch of business on their own or
only applicable if the company has actively taken a third party’s account. A violation of this statu-
appropriate confidentiality measures to protect tory prohibition of competition during the term
its information. It is thus essential to review (Section 7 of the Employee Act) is a ground for
existing employment contracts and samples to dismissal.
ensure they reflect the amendment of the Act
against Unfair Competition. Non-compete Post Termination
Restrictive covenants pertaining to post-termi-
Employee Liability nation periods are also permissible, following
The Employee Liability Act modifies general tort some statutory restrictions (Secs 36 et seqq of
law and principles under the Austrian Civil Code the Employee Act).
in that employees’ liability in relation to their
employers can be reduced to zero if damage A post-termination non-compete, within the pur-
was caused with only a lesser degree of fault. view of those statutory restrictions, is defined as
The liability is graded according to the degree of an agreement that limits the employee’s freedom
negligence on the part of the employee: in the to pursue his or her occupation for the period
case of an “excusable misconduct” (the slight- after the termination of employment. The restric-
est form of negligence), the employee is exempt tions on post-termination activities (employed,
from any obligation to pay compensation; in the self-employed or otherwise) may relate to a spe-
case of slight negligence, the court may, for rea- cific group of customers (customer-protection
sons of equity, exclude liability in part or in its clause), a specific industry, or also locally to a
entirety; and even in a case of gross negligence, specific territory.
the court may decide that compensation to the
employer should be reduced in part (although A non-competition clause is null and void if the
not entirely). employee is a minor at the time the non-compe-
tition clause is concluded, or if the employee’s
If the employee inflicts damage on a third party remuneration in the last month of their employ-
while performing services (eg, a customer), and ment does not exceed an amount equalling 20
the employee holds the third party to be harm- times the daily maximum contribution basis
less following a claim supporting compensation, under the General Law on Social Security (cur-
the employee has a right of recourse against his rently: EUR3,700.00 per month). Moreover, non-
or her employer if damage was caused with only competition clauses are only effective to the
a lesser degree of fault. extent that the restriction relates to the activ-
ity in the employer’s line of business, does not
exceed a period of one year and does not ren-
9Law and Practice AUSTRIA
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
der the employee’s professional advancement times the employee’s net salary; and
unreasonably burdensome. (c) under more recent case law by the Austrian
supreme court, a new, competing employer
A post-termination non-compete is also not could agree to hold the breaching employ-
enforceable if the employer gave notice without ee harmless by offering a signing on-bonus
cause, or if the employee had terminated the equalling the contractual penalty.
employment relationship with cause (eg, breach
of contract by the employer). Non-compliance 3.2 Non-solicitation Clauses –
with statutory restrictions pertaining to the scope Enforceability/Standards
of the non-compete (territory; activity) does not Customer and Supplier Protection
render the entire provision invalid, but only the A customer- or client-protection clause prohib-
part exceeding the statutory limits. The question iting an employee from entering into business
of validity must be considered on the basis of relations with customers of the employer post
equity considerations. termination are also deemed competition claus-
es and such a clause is therefore also subject
Compensation Payments for Specific to the statutory restrictions delineated under 3.1
Performance Non-competition Clauses. Supplier-protection
Generally, enforceability of non-competes does clauses prohibiting the employee from entering
not require payment of compensation by the into business contacts or maintaining business
employer, unless the employer gave notice (with- relations with the employer’s suppliers post ter-
out cause) and still wishes to enforce the clause. mination are also subject to those restrictions.
In such a case, the employer had expressly to
state, together with the notice letter, that they Non-solicitation/Non-poaching Clauses
wish to invoke their statutory right to enforce Clauses seeking to avoid solicitation of (former)
the non-compete clause and offer continued co-workers by the employee are viewed differ-
pay during the restrictive period (one year maxi- ently. Such clauses prohibit the employee from
mum). enticing away employees of their common (for-
mer) employer but need not pertain to a spe-
Remedies in the Case of Breach cific competing activity following termination of
If an employee violates a competition clause, the employment. The restrictions on competition
employer has the following options. clauses are not applicable so the agreement of
a contractual penalty does not exclude specific
• To file for damages, which is difficult to prove performance and contractual penalties are also
and is the least advisable avenue to pursue. not capped. However, the judicial right of mod-
• To request specific performance and seek eration is applicable.
injunctive relief, which is the most likely and
advisable route.
• To collect a contractual penalty if such a pen- 4 . D ATA P R I V A C Y L A W
alty had been agreed in advance. Contractual
penalties are, however, also not advisable. In 4.1 General Overview
the case of breach: Principles and Legal Sources
(a) the employer is then restricted from suing The protection of employee data is covered
for specific performance; under a combination of tightly interwoven legal
(b) contractual penalties are capped at six sources, namely employment contract law, stat-
10AUSTRIA Law and Practice
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
utes governing labour relations and, of course, tion. The processing of sensitive data is gener-
data protection law. The EU’s General Data Pro- ally prohibited by the GDPR, unless one of the
tection Regulation (GDPR) is directly applicable exceptions listed exhaustively in the regulation
in Austria, and the Austrian Data Protection Act is applicable.
additionally covers certain specifics of the Aus-
trian legal landscape. Under the GDPR, the employee has certain
rights that they can enforce against the employ-
When handling the personal data of their employ- er. The employer must provide the employee
ees, employers (as data controllers) must com- with all information on data processing in a com-
ply with the principles of the GDPR, including: prehensible and transparent form, free of charge
and without delay. The employee has the right
• the existence of a legal basis for data pro- to obtain information on the origin of the data,
cessing; the recipients, the purposes of processing, the
• secure storage of employee data; legal basis and the storage period. If the data
• limitation of data to what is necessary for the were processed incorrectly, the employee has a
purposes of the processing; right to rectification. Furthermore, the employee
• personal data must be accurate and, where has the right to request deletion if the data have
necessary, kept up to date; been processed unlawfully, if there is no legal
• transparent processing. basis, if the data are no longer needed, or if the
employee withdraws his or her consent to the
The processing of personal data is only lawful if processing of their data.
one of the following conditions is met:
Under the terms of the Data Protection Act,
• the data subject has given his or her consent employees must keep confidential any data
to the processing of personal data; that has been entrusted to them or has become
• the processing is necessary for the execution accessible to them as a result of their employ-
of the employment contract; ment.
• the processing is necessary for compliance
with a legal obligation to which the data con-
troller is subject; 5. FOREIGN WORKERS
• the processing is necessary in order to
protect the legitimate interests of the data 5.1 Limitations on the Use of Foreign
controller or a third party, except where such Workers
interests are outbalanced by the interests or Free Access to Labour Market
fundamental rights and freedoms of the data In accordance with the principle of free move-
subject. ment of labour, employees from the European
Economic Area (EEA) do not require special
Sensitive Data permits to work in Austria. Since 30 June 2020,
The processing of personal data revealing racial the transitional provisions for Croatian citizens
or ethnic origin, political opinions, religious or restricting access to the labour market have
philosophical beliefs or trade union membership expired. Foreigners who are not citizens of an
is particularly sensitive, as is the processing of EEA member state who have the residence
genetic data, biometric data, health data or data titles “family member” or “permanent resident
concerning a person’s sex life or sexual orienta-
11Law and Practice AUSTRIA
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
EU” also have free access to the Austrian labour Achievement of the minimum score depends
market. on criteria laid down by law, including educa-
tion, professional experience, age and language
Red-White-Red Card skills. After the AMS has carried out the labour
Foreigners who are not citizens of an EEA mem- market assessment, the application is returned
ber state may apply for a Red-White-Red Card to the settlement authority, which finally issues
(RWR Card), if they meet certain criteria. Appli- the combined residence and work permit. The
cants must be part of one of the following par- RWR Card is employer-bound and is issued for
ticular occupational groups: a limited period of two years.
• highly qualified employees; Blue Card EU
• employees working in shortage occupations; Particularly highly qualified academics from non-
• self-employed key personnel; EEA states can apply for a Blue Card EU. Appli-
• other key personnel; cants must fulfil the general requirements for the
• graduates of an Austrian university; granting of residence permits. In addition, the
• start-up founders. following requirements must be met:
The application for the RWR Card is either sub- • completion of a college degree or similar
mitted to the competent Austrian representative (study time at least three years);
authority abroad (embassy or certain consulates) • a binding job offer for a highly qualified
or, under certain legal conditions, to the compe- employment for at least one year;
tent authority in Austria. The authority is respon- • a gross annual salary corresponding to 150%
sible for issuing the residence permit. It forwards of the average Austrian gross annual salary
the application to the competent regional office (2021: EUR65,579).
of the Austrian Labour Market Service (AMS),
which decides whether the requirements for the In contrast to the RWR card, there is no mini-
granting of an RWR Card have been met. These mum score required for the Blue Card EU. How-
include the general requirements for granting ever, the mandatory minimum salary is higher.
residence permits (secure livelihood, health The residence and employment law procedure
insurance, accommodation) and, additionally, is the same as for the RWR Card, and the Blue
the following special requirements: Card EU is also employer-bound. The Blue Card
EU is issued for a limited period of two years.
• the achievement of a minimum score (based
on a defined skill set) mandated under the Red-White-Red Card Plus
Act Governing the Employment of Foreign The RWR Card Plus entitles foreigners who are
Nationals; not citizens of an EEA member state to settle and
• a secure job with a minimum gross salary work for a limited period of time in any part of
set by the Act Governing the Employment of Austria, in other words, it is not employer-bound.
Foreign Nationals; The RWR Card Plus can be obtained if the appli-
• for the vacant position to be filled, there is cant has already held an RWR Card or a Blue
neither a national nor a foreigner available on Card EU for two years and has been employed
the labour market who is willing and able to for 21 months within the last two years. Family
perform the employment applied for (labour members of employees with a valid RWR Card
market assessment). or Blue Card EU can also apply for an RWR Card
12AUSTRIA Law and Practice
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
Plus. The RWR Card Plus is issued for a maxi- 6. COLLECTIVE
mum period of three years, with the possibility R E L AT I O N S
of renewal.
6.1 Status/Role of Unions
Work Permit Organisation
A normal work permit is issued to the employer The Austrian Trade Union Federation (ÖGB)
and entitles them to employ the foreign worker with its specialist labour unions is the only Aus-
concerned in a specified workplace. In order to trian organisation representing the interests of
apply for a work permit, the applicant/employee employees based on voluntary membership. Not
must already have obtained a valid residence or only employed personnel, but also unemployed
settlement permit. Work permits are particularly and retired people are represented. The tasks
relevant for students, seasonal workers and har- of the ÖGB are to promote trade union action
vest workers (all others usually apply for either to bring about favourable employment relations,
a RWR Card or Blue Card EU). The procedure is not only by concluding collective agreements
conducted at the regional office of the AMS. The with the competent employer organisation
work permit is issued for a limited period of one (Chamber of Commerce), but also by partici-
year and can be extended by one year at a time. pating in the law-making process through legal
opinions and negotiations with their employer-
Posting Permit counterpart. Other tasks include providing free
For foreigners who are employed in Austria legal protection for their members and fostering
for less than six months by a foreign employer the education and training of employees.
without a permanent establishment in Austria,
a posting permit issued for a maximum of four The Federation of Trade Unions is divided into
months is sufficient. seven specialist labour unions, including the
Union of Private Employees, the Union of Pub-
Intra-corporate Transferees (ICT) lic Employees, the Union of Production Workers
This permit is aimed at key personnel from non- and the Union of Transport and Services.
EEA states (executives and professionals) who
are being transferred within the company to an Employees who wish to join a trade union are
Austrian branch of a foreign company. protected by the constitutionally guaranteed
freedom of association. If employees are dis-
5.2 Registration Requirements missed because of their membership in a trade
Apart from general registration requirements union, they can challenge such an unfair dis-
such as notification requirements or registration missal in court.
with social security, there are no particular regis-
tration requirements for foreign workers. Membership
Union membership has been decreasing con-
stantly since the 1980s, when approximately
60% of the Austrian work force was unionised
(today, only approximately 32% of the work-
force are union members). This is in large part
due to the increased degree of how labour and
the workforce are organised (eg, the increase in
part-time employment), since the total number of
13Law and Practice AUSTRIA
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
members has only decreased from approximate- • in organisational units with more than 1,000
ly 1.7 million to 1.2 million over the same period. employees, one additional member for every
Unions, however, are very much ingrained in the 400 employees.
Austrian employment landscape and still have
considerable political clout. The works council represents the entire work-
force, irrespective of union affiliation or member-
6.2 Employee Representative Bodies ship of individual workers/employees. Members
General of the works council need not also be trade union
The Labour Relations Act provides for the estab- members. The works council election mirrors the
lishment of a works council in companies with general election principles that also apply with
at least five full-time employees with permanent respect to parliamentary elections (equal and
employment. However, in practice, only larger direct vote, secret ballot, proportional represen-
employers with 50 staff or more have an elected tation). The period of office of the works council
works council and no sanctions are imposed on is five years, and re-election is possible.
either staff or employer where the work force
fails to hold elections. The works council under The employer must provide the works coun-
the Labour Relations Act is the only representa- cil with equipment necessary to fulfil its statu-
tive body on the company level acknowledged tory tasks (eg, separate office space within the
by law and authorised to represent staff in con- employer’s premises; office equipment). The
nection with certain tasks that are exhaustively employer and works council must consult quar-
enumerated in both the Act and applicable col- terly, and the works council must convene at
lective-bargaining agreements. least once per month.
Organisational Principles Special Rights/Protections of Works Council
Depending on the size and type of the workforce, Members
there must be separate works councils for white- Works council members are not bound by
collar and blue-collar workers, a general meet- instructions when carrying out their duties,
ing, a central works council, a group representa- must not be disadvantaged or privileged and are
tive body and, under certain legal premises, a bound by confidentiality obligations. Members
European works council. The number of works of the works council enjoy special protection
council members is dependent on the number against dismissal/termination. They may only
of employees. The works council will consist of: be dismissed for reasons specified by law (in
essence: material breach of contract, criminal
• one member in operations with fewer than ten conviction), and the prior consent of the labour
employees; court (see 7.5 Protected Employees).
• two members in operations with ten to 19
employees; Employee rights, voiced through the works
• three members in operations with 20 to 50 council, include the right to information, disclo-
employees; sure, monitoring, consultation, objection and
• four members in operations with 51 to 100 approval. The employer and the works council
employees; can conclude plant agreements, so that some
• one additional member for each 100 addi- measures that the employer wishes to introduce
tional employees; or can be vetoed by the works council, while oth-
ers can be coerced by either the employer or
14AUSTRIA Law and Practice
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
works council upon the other side before a spe- 6.3 Collective Bargaining Agreements
cial panel set up at the labour court in the event Parties/Mechanism
of a refusal to consent to a measure. Other types The most important mechanism of collective
of plant agreements are voluntary and cannot labour law in Austria is the collective-bargaining
be vetoed or enforced by either party through agreement. In general, it is concluded by the
legal means. Plant agreements that require the competent branch of the Chamber of Commerce
approval of the works council and can effec- and the Austrian Trade Union Federation or its
tively be vetoed include the introduction of con- separate labour unions.
trol measures that affect human dignity, such as
surveillance cameras. Enforceable plant agree- Collective bargaining agreements are not con-
ments include, for example, the introduction cluded on the company level, but for entire
of systems for the automated transmission of trades and industries. For instance, there is
employees’ personal data, introduction of dis- one collective-bargaining agreement for all of
ciplinary measures, regulations or the setting of Austria’s metal workers, regardless of who their
working hours and social plans. Voluntary plant employer is, if their employer is a member of the
agreements include introduction of bonus and competent branch of the Chamber of Commerce
pension systems. (membership is mandatory for all employers
conducting a trade or industry, and their affilia-
In addition, the works council has rights of par- tion with a specific branch is determined by the
ticipation in the hiring, transfer and promotion of type and scope of their business licence).
employees and must be informed about termi-
nations/dismissals (see 7.1 Grounds for Termi- 99% of all workers (both white- and blue-collar)
nation). The works council must also be repre- are covered under one or more of the several hun-
sented on a supervisory board of employer; one dred collective-bargaining agreements currently
employee representative must be appointed to in place across various trades and industries. It
the Supervisory Board for every two shareholder is possible, however, to conclude company col-
representatives. lective agreements, but this rarely happens and
mostly concerns very large employers (eg, the
Transfer of Undertaking Austrian carrier “Austrian Airlines”).
Furthermore, the works council has participa-
tion rights in the event of a transfer of business Normative Effect
(eg, restriction, relocation or closure of the entire A collective bargaining agreement is not only
business, mass dismissals, introduction of new a contract between the parties but also has a
working methods). It has to be informed about normative effect in that its provisions are not
the planned changes in operations and can only binding on the parties to the agreement,
make suggestions to mitigate any detrimental but in particular also on their associated mem-
consequences for the workforce resulting from bers (employers and employees of the respec-
the transfer of undertakings. If a transfer of busi- tive sector).
ness prompts substantial hardship for a signifi-
cant part of the workforce, the works council can While on the employer side, membership with
enforce the conclusion of a social plan. a professional association of the Chamber of
Commerce determines the application of a par-
ticular collective bargaining agreement, it is not
a legal requirement for employees to be a mem-
15Law and Practice AUSTRIA
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
ber of the trade union acting on their behalf for employer’s decision. Only if the employee then
the collective-bargaining agreement to become seeks to challenge his or her termination/dis-
legally binding. Once an employer is bound by missal before a court must the employer show
its terms, all of his or her employees are also sufficient cause.
defined under the personal scope of the agree-
ment. Rights and obligations under a collective Pre-notice Proceedings (Works Council
bargaining agreement thus apply, regardless of Involvement)
a unionisation of the work force. The Labour Relations Act requires employers to
notify the works council (where elected) of any
Subject Matter/Termination intended ordinary termination at least one week
Collective bargaining agreements must not run before notice is given. In the case of a summary
counter to statutory law in that the terms of any dismissal for cause, which is always given with
such agreement can only be more beneficial immediate effect, no such restrictions apply, but
than statutory regulations, otherwise the respec- the employer must notify the works council that
tive provision in the collective-bargaining agree- a summary dismissal has occurred.
ment would not be enforceable.
Following receipt of information of the ordinary
Collective bargaining agreements set forth rights termination of a specific employee intended by
and obligations of employers and employees on the employer, the works council has one week
such diverse issues as minimum wages, working to state its position on the measure. A notice of
hours, vacation, notice terms and introduction of termination given by the employer before this
pension schemes. The current minimum wage one-week period has lapsed is legally void. The
under any collective-bargaining agreement is works council has three options:
at least EUR1,500 (pre-tax), and many agree-
ments provide for a reduction of weekly work • it can expressly consent to the termination of
hours from 40 hours to 38.5 hours. the employee, in which case the employee is
barred from challenging his or her dismissal
Collective agreements can be concluded for a before a court on grounds that the termina-
limited or unlimited period of time. Signed for tion lacks social justification (general pro-
an unlimited period, they can be terminated not tections against termination/dismissal). The
earlier than after one year. employee can, however, still challenge on
other grounds (unfair dismissal, discrimination
claim; see 8.1 Wrongful Dismissal Claims);
7 . T E R M I N AT I O N O F • it can expressly oppose the termination, in
EMPLOYMENT which case the works council can also chal-
lenge the termination on social grounds on
7.1 Grounds for Termination behalf of the employee (or the employee also
General can, on any other ground); and
Subject to contractual or statutory default notice • it can refrain from commenting on the ter-
terms, the employer can generally terminate the mination, ie, remain silent, in which case the
employment relationship without stating a rea- employee has all the legal remedies to himself
son or motivation. This is also true with respect or herself, including the general protection
to a summary dismissal. The dismissal (oral or against dismissal/termination which is com-
written) itself need not state the reason for the monly used by plaintiffs to invoke a lack of
16AUSTRIA Law and Practice
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
social balance and undue social hardship a month and also on the 15th day of a calendar
prompted by the redundancy. month.
Statutory provisions on the special protec- Payment in Lieu of Notice; Compensation
tion against dismissals/terminations must be Payment; Writing Requirement
observed (see 7.5 Protected Employees). If an employer does not comply with the con-
tractual or statutory notice terms when giving
In the absence of a works council, employ- ordinary notice, or if the employee is summar-
ees can challenge a termination on the same ily dismissed without cause, the employee is
grounds within two weeks following receipt of entitled to a compensation payment which puts
the respective notice. them in the same financial position they would
have been in had the employer correctly given
Early Warning System notice under applicable notice terms.
Redundancy measures exceeding certain
thresholds require compliance with specific pro- Alternatively, the employee can challenge the
cedures and notifications under labour-market termination/dismissal and move for reinstate-
legislation. ment of employment (see 7.1 Grounds For Ter-
mination).
7.2 Notice Periods/Severance
Notice Periods Neither an ordinary notice nor a summary dis-
The statutory default rules on notice terms pro- missal must be in writing, although this is advis-
vide for staggered notice periods depending able for evidentiary purposes, and for some
on years of service (some collective-bargaining collective-bargaining agreements; however,
agreements mandate that previous years of ser- individual employment contracts often contain a
vice with other employees must be taken into clause requiring a termination notice to be made
account for purposes of this calculation): in writing.
• minimum notice period of six weeks, increas- Severance Pay (Old Scheme)
ing to: Upon termination of employment, the employee
(a) two months after two years of service; can be entitled to severance pay, depending on
(b) three months after five years of service; the applicable severance scheme.
(c) four months after 15 years of service; and
(d) five months after 25 service years. The “old” severance pay scheme’s personal
scope covers employment relationships that
The statutory notice periods are minimum peri- commenced before 1 January 2003 (and that
ods. Collective-bargaining agreements and indi- have since been abolished), and that have lasted
vidual employment contracts can therefore only for at least three years. The severance is calcu-
provide for longer notice periods. lated as a multiple of the remuneration payable
to the employee before termination, as follows:
Also, notice can only be given as of certain
dates. The statutory notice date is the end of a • two monthly salaries, increasing to
calendar quarter, but employment contracts can • three monthly salaries after five years of
provide for notice dates ending as of the end of service;
17Law and Practice AUSTRIA
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
• four monthly salaries after ten years of ser- • severe breach of fiduciary duties;
vice; • incapacity to perform the agreed services;
• six monthly salaries after 15 years of service; • violation of restrictive covenants;
• nine monthly salaries after 20 years of ser- • acting against the employer’s instructions; or
vice; and • material misconduct against employer or co-
• 12 monthly remunerations (ie, annual income) workers.
after 25 years of service.
Procedure and Formalities
Employees forfeit their claim to receive the A summary dismissal need not be made in writ-
“old” severance pay from their employer if they ing; oral communication, email or text/social
themselves resign or terminate without cause, media message will suffice.
or if they are summarily dismissed for cause.
This system was conflicting with job mobility, Where staff have elected a works council, the
because, often, employees only stayed on with employer must inform the works council imme-
their employer so as not to forfeit their severance diately of any summary dismissal and, upon
pay entitlements and, instead, hoped for their request, consult with the works council. The
employer to instigate a termination. The “old” works council need only be informed after the
system was funded and paid for by employers. dismissal.
Severance Pay (New Scheme) The proceedings delineated under 7.1 Grounds
The “new” severance pay scheme in place for For Termination apply accordingly.
all employment relationships which commenced
after 31 December 2002 requires employers to If the dismissal lacks sufficient grounds, the
pay monthly contributions amounting to 1.53% employee can opt either to claim money dam-
of the pre-tax salary to an outside severance fund ages (compensation claim), or to challenge the
provider (special-purpose affiliates of insurers dismissal in court, moving for reinstatement of
and banks) who then also manages and invests employment.
funds received from employers. The employee
is entitled to the “new” severance pay regard- 7.4 Termination Agreements
less of how the employment relationship ended, Termination agreements are permissible and, in
although summary dismissals, resignations by general, no specific procedures or formalities
employee and terminations before three years must be observed.
of service have lapsed trigger waiting periods.
In any event, however, employees can “piggy- Exceptions to this rule apply where the staff
back” their entitlements regardless of how the have elected a works council. An employee can
employment relationship ended and all entitle- request to be counselled by the works council
ments will vest, but only once the employee on the consequences of such a move, and within
retires. two days following his or her request, a termina-
tion agreement cannot be validly concluded.
7.3 Dismissal For (Serious) Cause
(Summary Dismissal) Another exception concerns employees on
Grounds for Summary Dismissal maternity or paternity leave and apprentices.
Employees may be dismissed with immediate Termination agreements with parents on leave
effect for cause, including the following reasons: must be made in writing. If the parent is a minor,
18AUSTRIA Law and Practice
Contributed by: Jakob Widner and Axel Guttmann, Graf Isola Rechtsanwälte GmbH
the agreement must also include a written certifi- costly for employers, and often, such cases are
cation that the employee has been counselled by settled in or out of court.
the labour court or the Chamber of Employees
on his or her rights and on the special protection Lack of Social Fairness (Operational
against dismissal while on leave. In the case of Reasons)
apprentices, identical legal requirements apply. The assessment of social unfairness is carried
out in a three-step test.
7.5 Protected Employees
The following categories of employees enjoy Firstly, the employee must show that, because of
special statutory protection against dismissal: the dismissal, their economic interests are signif-
icantly impaired and that they are put at a disad-
• pregnant women; vantage far worse than should be expected from
• parents on maternity or paternity leave; a dismissal process. The court then assesses the
• members of the works council; entire economic circumstances of the employee,
• apprentices; such as total family income and assets, caring
• disabled employees; and responsibilities, costs of living and, most impor-
• employees on military draft. tantly, the court will appoint an expert who can
testify as to whether the employee’s chances of
Protected employees may only be dismissed finding other gainful employment within a rea-
if there is a statutory reason for dismissal and sonable time period are intact.
the labour court or, in the case of the disabled,
the Disability Committee (a specialist panel Secondly, in defence of such a showing by the
established at the ministry of social affairs) has employee, the employer can argue that there are
given its prior consent. Without this consent, personal or operational reasons justifying the dis-
the dismissal/termination is legally void and the missal, nonetheless. Such operational reasons
affected employee can opt either to challenge for dismissal include a decline in orders/busi-
the dismissal and request reinstatement, or to ness (eg, due to the COVID-19 pandemic), out-
accept the illicit termination and claim damages sourcing of operational units and other restruc-
for wrongful dismissal. turing measures. The business judgement of the
employer will not be put into question, but the
employer must show that the dismissal serves
8. EMPLOYMENT a viable business purpose.
DISPUTES
In a last step, and only if the employee and the
8.1 Wrongful Dismissal Claims employer could each meet their burden of proof,
Dismissals can be challenged before a court the court will then weigh against each other
either if socially unfair or if premised on an inad- the conflicting interests involved and conclude
missible motivation (see 9.1 Judicial Proce- whether the employee is harder hit by the dis-
dures). If successful, the court challenge results missal or the employer by a reinstatement of the
in a reinstatement of the employment relation- employee.
ship and backpay of all income the employee
would have received without the dismissal. Los- Lack of Social Fairness (Personal Reasons)
ing such a court battle can therefore be rather Instead of operational or business-related rea-
sons, the employer can also raise a defence that
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