New legislation recently came into effect that aims to ease the process of reintegration into the workplace for employees who have been on extended sick leave and who would benefit from a reduced workload in order to aid rehabilitation and reconnect with the workplace. Although it is a well-meant initiative to curb the increase in long-term sickness, the legal framework reveals some major flaws.
Two recent amendments to the Labour Relations Act benefit the legal status of works councils and are geared towards increasing older employees' job prospects. In particular, the term of office for members of a works council has been extended from four to five years. Works council members' entitlement to educational leave has also been extended. Further, the special treatment of employees who start employment at age 50 or older has been abolished.
The Supreme Court recently ruled on the thin line between the freedoms to provide services afforded under EU law and member states' legislation to contain social dumping, which can be extended to employers of other member states when they perform their services abroad. The decision clarifies that foreign minimum wage legislation will be avoided where its application poses an undue burden on employers and where it can be guaranteed that the purpose of minimum wage legislation is not undermined.
The Supreme Court recently ruled that a retirement policy which makes redundant all employees who are entitled to early retirement is discriminatory and, as a direct form of age discrimination, cannot be justified by claiming that such a policy amounts to a socially compatible form of redundancy. The decision indicates that the requirement to consider social selection and weigh social hardship can also qualify as a justification for age discrimination.
The Supreme Court recently ruled that the wearing of a niqab need not be tolerated by an employer because, although religious dress is protected under anti-discrimination legislation, it is one of the basic rules of interpersonal communication that facial expressions be visible. Further, although an employer's prohibition on religious dress amounts to direct religious discrimination, this ban can be justified as an occupational requirement.
In a recent decision with potentially far-reaching consequences, the Court of Appeals for the Vienna Circuit ruled that a peculiar provision in the Act on Rest Periods violates EU law and must therefore be disregarded by the courts. The court of appeals gave leave to appeal to the Supreme Court. If the Supreme Court hears the case and upholds the court of appeal's decision, Austrian employees may soon celebrate yet another public holiday.
The Supreme Court recently sought to set the standard for an employer's right to introduce or enforce a dress code. Basing its decision on the privacy rights under the Civil Code and the European Convention on Human Rights, the court clarified that an employee's outer appearance is his or her private affair, and that the test to be applied as to where this privacy ends is trustworthiness. Although clear-cut in theory, the guidance leaves considerable leeway for interpretation.
The new year has brought some substantive changes in employment legislation, including new minimum working time reductions for parental part-time work and new requirements for job offers under which employers must first offer job openings to part-time employees. Further changes include new laws and regulations in relation to non-compete agreements, all-in salaries and overtime and working time provisions.
Imagine that a foreign entity employing Austrian staff in Austria asks its Austrian employees to sign a standard employment agreement template and then tries to terminate one of those employment relationships under Austrian law. Those were the facts underlying a recent Supreme Court decision, wherein the court concluded that the termination of an employment relationship was governed by the laws of the foreign employer, not Austrian law.
The Supreme Court recently ruled on whether and how an employer can request that employees submit to alcohol testing. The court qualified the employer's unannounced breathalyser tests as a control measure that affected human dignity and thus required the works council's prior consent. This decision has left some questions for employers, as it is almost impossible to comply with strict safety standards without unannounced testing.
For decades it was settled case law that compensating (or promising to compensate) a new hire for contractual penalties owed by the employee to his or her former competitor employer for breaching a non-compete clause amounted to anti-competitive practice, and both the former employee and new employer were liable under the Unfair Competition Act. However, the Supreme Court recently reversed this case law.
In line with the EU Transfer of Undertakings Directive, share sales do not trigger the works council's information or consultation rights. However, the provisions transposing the EU directive into Austrian law are not the only statutory rules that must be observed when it comes to share sales. As such, share sales with substantial operational changes trigger works council rights that far exceed those that apply under the EU directive.
In a recent decision the Supreme Court had to consider whether activities performed during an employee's sick leave that would not typically be regarded as adequate conduct were acceptable. The Supreme Court confirmed the lower courts' decisions and opined that the plaintiff had only followed his doctor's instructions and that he could rely on this advice.
The Supreme Court has upheld a lower court decision which dismissed an employer's claim that an employee should be liable for surveillance costs incurred by his employer. The decision reminds employers to think twice before incurring costs for detective surveillance of employees, as they can claim those costs from employees only where surveillance confirms misconduct and the misconduct warrants a valid, actionable claim.
Austrian law generally allows for imputation or attribution of knowledge to a principal where an agent, in the course of performing that task, learns something about a third party that has legal relevance to the principal's relationship with that third party. Employers should establish functioning reporting lines or risk knowledge being imputed to their detriment.
Under Austrian law, employees are granted protection against a termination of employment that lacks social justification. This means that employees can challenge their termination before the courts if it results in detrimental consequences that exceed the usual negative effects of a termination. The Supreme Court recently summed up the previous case law on the issue and specified what amounts to 'unusual' consequences.
In recent years, extended education-oriented programmes (eg, for educational leave and other subsidised leaves of absence) have set a precedent for allowing employees to find a work-life balance in an increasingly competitive work environment. Employees who are dismissed because of their intention to take educational or family care leave, or because of the actual leave taken, can challenge the dismissal as unfair.
The Supreme Court recently ruled that dismissal of an employee because of his or her national origin is deemed to constitute unlawful workplace discrimination based on ethnic grounds. Employers would be well advised to communicate clearly to staff that harassment, including offhand remarks or other verbal conduct, directed towards any ethnic or national group is unlawful.
Austrian legislation protects employees against the socially unjustified termination of employment. The Supreme Court recently clarified that an employer is not obliged or authorised to examine the decision-making process of a works council regarding its consent to the termination of an employee, provided that the employer was unaware of any illegality concerning the internal decision-making process of the works council.
In a recent decision the Supreme Court clarified that arrangements by works council members for a paid leave of absence are not enforceable if they go beyond the limits set forth in the Labour Relations Act. The court made it clear that the paid leave in the agreement at hand exceeded the benefits that works council members could accept in exchange for their honorary post and violated the concept of volunteering.
The Supreme Court recently clarified a conceptual question concerning age discrimination. The case was unique in that the plaintiff was the only contender for the job and the vacancy was never filled. The court had to decide whether discrimination could occur even in the absence of a person with whom the applicant's situation could be compared.
Employers must respond quickly when defending employees against mobbing attacks and harassment by their peers, a recent Supreme Court decision has confirmed. The court made clear that although an employer is free to choose any means necessary to protect its employees against such behaviour in the workplace, measures must be taken without delay.
Although Austria has had a statutory framework in place since 1988 regulating the relationship between temporary workers, their employers and the entity to which they are assigned, the legislature was slow to implement the regulations set forth in the EU Directive on Temporary Agency Work. In order to adopt the directive's provisions, the Temporary Employment Act will shortly be amended accordingly and signed into law.
Confidence in occupational retirement schemes has been lost over the years due to financial crises current and past, incorrect investment decisions and lax oversight. Many employees transferred their pension rights to defined contribution models hoping for higher returns, but instead suffered losses. The recent amendment of the Pension Fund Act aims to mitigate potential negative effects on occupational pensions.
Austrian law requires companies to be members of the Chamber of Commerce. In general, the applicability of a collective bargaining agreement is determined through mandatory membership of the relevant division of the Chamber of Commerce; the division to which a company belongs depends on the employer's trade/business and corresponding business licence.
In two recent decisions the Supreme Court clarified employer liability for harassment perpetrated by employees. The decision demonstrates that sexual harassment by the employer can also be perpetrated by the victim's superior. In such case the employer will be (vicariously) liable even where the harassment was the first such conduct of its kind.
The Supreme Court recently clarified that the termination indemnity for commercial agents can be forfeited if an agent has terminated the agency contract for retirement reasons other than reaching the regular retirement age. Agents would be well advised to consider the implications for their termination indemnity and principals have been granted yet another reason to avoid payment of the indemnity once an agent retires.
Austrian law allows employers and employees to enter into non-compete agreements. The law distinguishes between restrictions of competing activities during employment and restrictive covenants pertaining to post-termination periods. Whether a restrictive covenant on post-termination periods is enforceable depends on how, and by whom, the employment relationship was terminated.
In order to carry out dismissals and mass terminations, the Austrian legal regime requires the employer to give prior notification to the appropriate agency and observe the relevant terms. Additionally, the regime provides for staggered severance pay, increasing with seniority, if the termination of employment is not initiated or primarily caused by the employee.
The Supreme Court recently clarified the scope of a works council's right to freedom of information under the Labour Relations Act. The employer, an airline, intended to evaluate its quality of service using so-called 'mystery flyers'. The information gathered was passed on to the airlines works council, which made several inquiries, requesting further information.
In general, companies can collect employees' personal data. A prerequisite for the lawful processing of non-sensitive personal data is that it does not infringe an employee's legitimate interest in the confidentiality of the data. This condition is met if there is an explicit legal authorisation or duty to carry out the processing and the data subject has expressly agreed to, or has a vital interest in, such processing.
The European Works Council Directive imposed obligations on EU member states to establish a European works council or a procedure to inform and consult employees. Austria implemented these obligations by way of an amendment to the Labour Relations Act. The act provides for specific rules on the composition of a European works council, including rules on the number of members and the allocation of seats.
The Act on Secondment is broad in scope and basically applies to any scenario in which employees are seconded to a third party. The law's purpose is to provide rules which protect the labour and social rights of the seconded employees. Secondment creates a tripartite relationship between a temporary employment agency, the employer and the employee.
The Working Time Act defines 'overtime' as a period of working hours that exceeds either the maximum daily amount (eight hours) or the maximum weekly amount (40 hours) of standard working hours. Unless otherwise provided by collective bargaining agreements, a 50% premium is added to the normal hourly wage for calculating overtime pay.
Recent legislation has amended certain ingrained and inflexible rules on statutory working hours and conferred on staff representatives and employers legal powers to deviate mutually from the usual framework. Generally, standard working hours are up to eight hours per day and up to 40 hours per week; however, now they may be exceeded up to certain limits under certain circumstances.
Following the demise of Enron and ensuing US legislation, US companies have introduced mechanisms to safeguard the compliance of their European operations with the new legal framework. Such mechanisms have included implementing codes of conduct or ethics, which often provide for a whistleblowing hotline. The issue of whether the implementation of such codes is in line with Austrian legislation is twofold.
Under Austrian rules on collective bargaining, certain matters that affect the interests of staff are subject to regulation at plant level. Section 30 of the Labour Relations Act specifically requires that employers must make employees aware of any such plant agreements. In a recent Supreme Court case the employer failed to publish a plant agreement adequately, costing it dearly.
In response to the global economic downturn, Austria has in place a system wherein employers are permitted to reduce their employees' working hours while keeping the employment relationship intact. In accordance with this system, employers pay their employees government-subsidized special allowances instead of regular pay in order to cover most of the earnings shortfall.
Unemployment insurance is compulsory for all employees. Employers and employees must each contribute 3% to the social security provider. Since January 1 2009 self-employed indiviuals can opt into the system. It is hoped that this support programme will foster entrepreneurship and expand the Austrian social system.
A recent Supreme Court decision could have broad ramifications for employers that seek to raise individual employee performance by incentivizing their salary systems. Regardless of obtaining express consent from each individual employee, the court has ruled that such a system is voidable without prior consent from the works council.
In a recent decision the Supreme Court had to decide whether an employer was obliged to pay for office equipment needed by works council members to perform their representative roles on behalf of the workforce. The court concluded that the employer must, at its own cost, provide the chairman of the works council with a mobile phone, a laptop computer and a personal digital assistant.
According to Section 40 of the Labour Relations Act, a works council must be established by employees through an electoral process in companies where at least five employees are regularly employed. Certain changes to the ownership structure of an employing entity may require notification of the works council.
In a recent decision the Supreme Court reiterated previous case law concerning an employee’s private use of a mobile phone or other employer-provided electronic device. The court ruled that cause for dismissal is justified only if an employee uses for private purposes an electronic device provided by his or her employer under the express condition that it be exclusively used in a work-related context.
An amendment to the Working Time Act recently took effect. It brings with it sweeping changes and increased flexibility to maximum working hours. Its intention is to allow employers to adapt to a changing economic environment and at the same time grant legal protection to employees in connection with potential health hazards.
Austria has no codified piece of legislation that specifically regulates all aspects of outsourcing transactions. However, the legal ramifications with respect to employment are specifically set forth in the Employment Law Harmonization Act and the Labour Relations Act.
Austrian employment legislation is fully compliant with applicable EU regulations, yet it is still more flexible than the labour laws of other European jurisdictions. This update considers the legal framework that applies to working hours, tax duties and termination in the Austrian workplace.
Austrian legislation protects employees against socially unjustified termination of employment. This legal recourse regularly serves as a strong bargaining tool in case of redundancies. If an employee challenges his or her dismissal before the courts, a three-prong test is applied to determine whether the termination was justified.
If changes to a business structure proposed by an employer entail redundancies, the works council of the business unit has the legal power to force a social plan upon the employer. In the case of relocation, such a plan would typically provide compensation for increased travel expenses.
Although uncommon under the Austrian legal framework governing labour relations and dispute resolution, some collective bargaining agreements contain disciplinary procedures that must be observed by an employer before dismissal or lesser disciplinary penalties.