Staff Relocation: Court Rules on Employer's Duties - International Law Office

International Law Office

Employment & Labour - Austria

Staff Relocation: Court Rules on Employer's Duties

May 16 2007

Consultation Rights
Protection against Relocation
Decision


In a decision of August 31 2005 the Supreme Court held that the agreement of a social plan in the course of redundancy measures did not exempt an employer from obtaining express approval for the relocation of its staff to another business site. The court clarified the consultation rights of the works council in connection with organizational changes in specific business units by the employer.

Consultation Rights

Under the Labour Relations Act a works council must be established by the staff of a business unit through an electoral process in companies with at least five employees. The term 'employee' under the Labour Relations Act does not include managerial personnel and employees under the age of 18. Certain changes to the business structure (eg, outsourcing, plant closures, organization of workflow, change of ownership and mergers) trigger an obligation by the employer to notify the works council of the proposed measures and start a consultation process. If the measures proposed by the employer entail redundancies, the works council has the legal power to force a social plan upon the employer in which the employer and the employee representative body agree on the terms of redundancy packages to mitigate the detrimental consequences of job losses. In the case of relocation, a social plan would typically provide for an allowance or other monetary compensation for affected staff to compensate for increased travel expenses.

Protection against Relocation

In addition to the consultation rights of the works council in connection with redundancies and other measures by the employer that materially affect a large number of the workforce of a specific business unit, an employee is also granted protection against unilateral relocation by the employer at an individual level. Where an individual relocation has a negative impact on the employee, the employer must obtain the works council's consent prior to such relocation. If the works council refuses to agree expressly that an employee be transferred to a new workplace, the employer must petition the competent labour court for a court approval that would supplant the works council's consent.

Decision

In an earlier decision the Supreme Court ruled that individual approval by the works council is not required in cases where the relocation measures proposed by the employer are already covered under a social plan negotiated between the employer and the works council. Contrary to this interpretation of the Labour Relations Act, in the case at hand the court held that the scope and rationale of a social plan and the collective consultation process at plant level leading to an agreement with the works council on behalf of the entire staff affected by such measures cannot eliminate the requirement to have the works council expressly consent to each relocation of employees on an individual, case-by-case basis.

If the employer fails to obtain the works council's approval, the affected employees can validly invoke their rights under the Labour Relations Act and refuse to follow the employer to the new workplace.

Given the low entry level for the establishment of a works council under Austrian law, even small businesses with fewer than 50 employees fall within this legal framework.


For further information on this topic please contact Jakob Widner at Graf & Pitkowitz Rechtsanwälte GmbH by telephone (+43 1 401 17 0) or by fax (+43 1 401 17 40) or by email (widner@gmp.at). The Graf & Pitkowitz Rechtsanwälte GmbH website can be accessed at www.gmp.at.


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