Practice Area Articles
By Dr. Philipp Spatz and Ivan Ivanic
Back to International Employment Law
KEY DEVELOPMENTS FOR 2021
Short-time work arrangements
A short-time working model had already been introduced in the early phase of the pandemic to mitigate the negative effects on the labour market. The employer and the employee or the works council (Betriebsrat) may agree in writing on the implementation of a short-time work scheme including its duration and the scope of work to be performed. "Phase 3" started on 1 October 2020. Although it was initially possible to reduce the working time down to zero hours with almost full wage compensation (up to 90%), as of 1 October 2020 the minimum working time increased to 30% of the regular working time.
If a short-time work arrangement has been implemented, the employer may submit an application for support to the Austrian Employment Office (Arbeitsmarktservice or AMS). The actual work performed is to be borne by the employer. The AMS reimburses the employer for the balance to the total amount payable to the employee under the short-time arrangement according to fixed flat rates.
Short-time work can be agreed for a maximum period of six months (initially three months with the option of an extension).
The short-time work model was initially expected to run until March 2021 but may be further extended.
Standardization of notice periods and dates
Austrian (labour) law traditionally distinguished between workers (Arbeiter) and employees (Angestellte) but recently, the rights of workers and employees have been streamlined in many respects. With effect from 1 July 2021, the notice periods and dates have been aligned.
Before 1 July 2021, the notice periods and dates for employees were regulated in the Austrian Employees Act (Angestelltengesetz – AngG), while those for workers were governed by the Austrian Trade Code (Gewerbeordnung – GewO), the Austrian General Civil Law (Allgemeines Bürgerliches Gesetzbuch – ABGB) and the various collective bargaining agreements (Kollektivverträge).
Under the new regime, the notice periods and dates for workers are aligned with those applicable to employees under the Employees Act.
In the event of a dismissal by the employer, the "seniority principle" (Senioritätsprinzip) will also apply to workers. Accordingly, the notice period increases depending on the years of employment. The notice period is generally six weeks and increases up to five months after 25 years of continued employment.
The standard termination date for workers continues to be the end of the quarter; but this can be changed by mutual agreement to the 15th or the last day of a month.
Home office regulations may be introduced
The number of people working in home office has rapidly increased in Austria since March 2020. Some legal regulations on the protection of employees working in home office already exist, but they are scattered and incomplete, which is why the creation of a special law on home office work is being discussed. However, it is unclear when this will actually be implemented.
KEY DEVELOPMENTS FOR 2020
Cancellation of termination fee
Employers were required to pay a public termination fee (Auflösungsabgabe) of €131 upon the termination of an employment relationship. This applied when an employer gave notice of termination or an employment relationship was terminated by mutual consent. However, this fee has been abolished as of 1 January 2020, so from an employer's perspective, the additional financial burden on termination of an employment relationship no longer applies.
Entitlement to nursing leave and part-time nursing care
From 1 January 2020, employees are legally entitled to take time off work or work part-time to care for their sick relatives, without needing to obtain consent from their employers. This was previously not a legal entitlement but could be agreed with the employer. The new rules only apply to businesses with more than five employees. Employees must have been employed for at least three months before they become eligible for care leave and the relative to be cared for must be assigned to care level 3 or higher. An employee can request up to two weeks' nursing leave/part time nursing leave but is entitled to an extension of two weeks, upon request. Therefore, the legal entitlement covers up to four weeks in total. Upon request, the employee must provide evidence that the legal requirements have been complied with.
A short-time working model has been introduced to deal with COVID-19. It is now possible to work down to zero hours with almost full wage compensation (up to 90%) without dissolving the employment relationship. The employer and the employee or the works council (Betriebsrat) should agree on the duration and the scope of short-time work in writing. Short-time work can be agreed for a maximum period of three months, whereby an extension is possible.
If a short-time work agreement exists, the employer can apply to the (Un-)employment office ("Arbeitsmarktservice" or "AMS") to receive a reimbursement of the additional costs incurred by the employee's lost working hours, according to fixed flat rates. The labour inspectorate has already identified over 500 infringements in connection with short-time work (as of May 2020). Some of these were intentional offences, while others were committed negligently. Incorrect calculations, for example, when overtime is offset against lost hours (even if not intentionally), can lead to sanctions. Therefore, employers should be aware that they may face such administrative penalties.
KEY DEVELOPMENTS FOR 2019
Extension of maximum working hours and overtime limits
Pursuant to an amendment to the Austrian Working Hours Act and the Austrian Rest Periods Act, which came into force on 1 September 2018, the maximum daily working time has increased from 10 hours to 12 hours and the maximum weekly working time from 50 hours to 60 hours. The regular working hours of 8 hours per day and 40 hours per week (or less, under an applicable collective bargaining agreement), however, remains unchanged. Any work performed beyond the regular working hours continues to qualify as overtime work for which employees are entitled to extra remuneration. Employees can choose whether they prefer to receive their overtime remuneration in cash or by way of compensation.
Extension of the personal exemptions from the Austrian Working Hours Act and the Austrian Rest Periods Act
In the past, executive employees have been exempt from the maximum working hours and mandatory rest periods under the Austrian Working Hours Act and the Austrian Rest Periods Act. The exemption was extended on 1 September 2018 and will also apply to any employees “having significant independent decision-making authority" as well as "close relatives of the employer".
Data of job applicants may be stored for seven months
Under the new EU General Data Protection Regulation, the processing of personal data in the context of a job application is strictly limited to the purposes of the application process (establishment of an employment relationship). Therefore, the personal data of applicants that are unsuccessful should be deleted without delay unless an applicant has specifically consented to it being stored. In addition, a legally binding decision of the Austrian Data Protection Authority has confirmed that the recipient of a job application has a legitimate interest to store the applicant's data for as long as a rejected applicant may raise claims for unlawful discrimination. Accordingly, an applicant’s data may be stored for a period of 7 months from the date of rejection.
KEY DEVELOPMENTS FOR 2018
Alignment of Rules Applicable to Blue Collar Employees with those Applicable to White Collar Employees
From 1 July 2018, there will be an alignment of the rules applicable to blue collar employees with the more employee-friendly rules applicable to white collar employees.
The changes will include:
- in cases of repeated illness, employees will only be eligible for sick pay for the maximum term applicable for a single incident, except where the illness relates to an accident at work or occupational illness;
- if an employee is unable to work, through no fault of their own due to reasons other than illness, there will be a mandatory entitlement to continued pay. Provisions to the contrary in existing collective bargaining agreements will no longer apply;
- termination of employment after December 31, 2020 will be subject to the same notice periods and dates currently applicable to white collar employees. Accordingly, termination with 14 days’ notice will no longer be possible;
- apprentices will be entitled to 8 weeks sick pay instead of 4 and employees’ entitlement to sick pay will be extended from 6 to 8 weeks; and
- it will be possible to stipulate in a collective bargaining agreement or a shop agreement that the calendar year rather than the employment year shall be relevant for the assessment of the maximum term of sick pay.
KEY DEVELOPMENTS FOR 2017
New Wage and Social Dumping Control Act
On 1 January 2017, a newly enacted Wage and Social Dumping Control Act (Lohn- und Sozialdumping-Bekämpfungsgesetz - LSD-BG) (the “Act”) came into force. The Act aims to combat wage and social dumping by foreign employers in the context of the cross-border assignment of employees into Austria. To a large extent, the new legislation only compiles existing rules which are currently spread over several laws. However, the Act, also includes a more strict liability regime for clients and general contractors in the construction industry, new exemptions for cross-border employee assignments within a group, and a simplification of reporting duties and rules on the cross-border cooperation of the competent authorities in EU Member States.
KEY DEVELOPMENTS FOR 2016
New disclosure requirement for all-in-arrangements
Under an all-in-arrangement, an employee is entitled to a fixed remuneration, irrespective of whether he/she is working normal working hours only or overtime. Any new all-in-arrangement concluded from 1 January 2016 onwards needs to specify the amount of the base salary, i.e. the portion of the overall remuneration relating to normal working hours. We recommend allocating a reasonable amount to the base salary as compared to the overtime portion to minimise the risk of legal challenges.
New restrictions on non-competition clauses
A non-competition clause will only be valid if it refers to activities within the employer’s line of business, it doesn’t exceed one year and it does not unreasonably impede an employee’s professional career.
In addition, from 29 December 2015 onwards, a non-competition clause will only be enforceable if the remuneration (excluding special payments) payable for the last month of employment is 20 times the daily maximum under the General Social Insurance Act (“ASVG”) (i.e. currently EUR 3,240). Furthermore, any contractual penalty linked to a non-competition clause and agreed from 29 December 2015 onwards must not exceed six times the last monthly net salary (excluding special payments).
New rules on the reimbursement of training costs
Agreements on the reimbursement of training costs concluded after 28 December 2015 are subject to two new restrictions. The maximum commitment period is generally reduced to four (previously five) years and the agreement needs to provide for a proportionate reduction of the reimbursable amount for every month of employment.
Information requirements vis á vis part-time employees
Since 1 January 2016, an employer needs to inform part-time employees about any job vacancies in the company involving a higher amount of working time. This can be done by posting a notice at an easily accessible place in the company, by electronic data processing, or telecommunication. The information requirement only applies in case a job vacancy is “advertised”, i.e. externally or internally communicated to more than one person. Any offer addressed to only a single person does not qualify as an “advertisement”. Non-compliance with the information requirement incurs a fine.