Employment 2021

Last Updated September 07, 2021


Law and Practice


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In the last 12 months, Austrian employment legislation was foremost concerned with containing the consequences of the COVID-19 crisis for the labour market, but also saw some legislative changes concerning the harmonisation of blue- and white collar workers’ law and the voting age for the works council.

Harmonisation of Notice Periods

When terminating an employment contract, employers have to observe different notice periods depending on the status of the employee (blue-collar or white-collar worker). A new law will harmonise the notice periods of blue-collar and white-collar workers. This adjustment was originally planned for 1 January 2021, but the new law was postponed twice and shall now be applicable to terminations that occur after 30 September 2021.

Reduction of the Voting Age for Works Councils

The required age to stand as a candidate (“active right to vote”) for the election in works councils was reduced from 18 to 16 years. For more information on Austrian works councils see 6.2 Employee Representative Bodies.

COVID-19 legislation as explained here is foremost a temporary initiative by the Austrian government, planned to be abolished by the time the pandemic ends.

Short-Time Work


Short-time work schemes were first introduced in 1949, amended during the financial crisis in 2008 and 2009 and now again overhauled to meet the requirements of both employers and the workforce. Since the reintroduction of the short-time work scheme in March 2020, the short-time work scheme is now already in its fifth phase. This fifth phase started on 1 July 2021 and will last until 6 June 2022.

Like so many other furlough schemes across Europe, the model aims at reducing costs to employers while at the same time safeguarding that lay-offs are avoided and the workforce is ready to support an economic recovery. From employees’ perspectives, they retain their jobs and spending power, which helps to stimulate the economy once the pandemic has subsided and government measures seeking to contain the spread of the virus are lifted.


Generally, all employers are eligible to participate, regardless of industry or type of workforce, with the exception of entities not pursuing primarily economic purposes, such as political parties and certain other public or quasi-governmental bodies.

Also, all types of employees are eligible for support, including chief executive officers and managerial personnel, apprentices and trainees and also parents returning from parental leave of absence, provided they are insured under the General Social Security Act (ASVG) and earn above the current marginal level of EUR460.66 per month.

Contractual arrangements and proceedings

The so-called “social partners”, ie, the Chamber of Commerce as the quasi-governmental employer organisation, and the labour unions, play a decisive role in administering the short-time scheme. Introduction of short-time work requires employers to sign a model agreement drafted by the social partners, which is then counter-signed by the social partners and also those staff who are affected, whereby staff are represented by the works council, if such a representative body has been elected.

The current fifth phase of the short-time scheme will last for a maximum period of six months.

During the term of the scheme and for a period of one month thereafter (retention period), employers are prohibited from terminating any employment relationship concerning the operational unit where short-time work has been introduced, regardless of whether all staff participate, unless terminations were prompted by the misconduct of employees, in which case the employer had to hire a replacement. Mutual terminations also require replacement hires, unless the employee was counselled by the Chamber of Employees or the union that a refusal to agree on a termination would hardly aggravate the employee’s legal position.

Reduced work hours, subsidies and net replacement rate

From the fifth phase, employers are now more restricted in the possible work hour reduction: Previously, the employer could reduce work hours up to 90%, whereas now employees should work for at least 50% of their previous work time (30% in companies that were especially hit by the pandemic). The allowance paid by employer to compensate for the resulting shortfall in earnings is a flat rate that is staggered on the basis of the employee’s salary level.

Employers therefore continue payment of salaries for work actually performed during reduced work hours and, in addition, pay a subsidy which depends on the employee’s previous net salary/month, as follows:

  • monthly gross salary of up to EUR1,700, salary + subsidy amount to 90% of previous net salary;
  • monthly gross salary of up to EUR2,685, salary + subsidy amount to 85% of previous net salary;
  • monthly gross salary of more than EUR2,685, salary + subsidy amount to 80% of previous net salary.

Salaries above EUR5,370 are not eligible for allowances.

Until the beginning of the fifth phase of the short-time work scheme, the government refunded almost all the subsidies paid by the employer to their staff. Now, employers are refunded for only 85% of the subsidies paid. An exemption is made for businesses that were especially hit by the pandemic, such as those that weren’t allowed to operate, at all (eg, night clubs, hotels) or companies that saw a decline in turnover by at least 50% since the start of the pandemic.

Continued Remuneration without Performance

Short-time work schemes are not the only legislative initiative that was introduced to mitigate the consequences of the COVID-19 crisis.

Employee quarantine

Based on the Act on Epidemics, employees quarantined by health authorities are entitled to continued remuneration by their employer, unless the need for a quarantine was prompted by negligent conduct on the part of employee, eg, infection with the virus due to travels in countries that were to be avoided under travel advisories by the Austrian government. If expressly decreed by authorities, the employer can then request reimbursement for remunerations paid during quarantine without the employee rendering any corresponding services.

Childcare in the case of sickness

A parent can apply for care leave of up to one week if their child suffers from COVID-19. Employers must afford continued pay during such a leave period, and if childcare takes more than one week, the parent can take annual leave without requesting approval from their employer, also triggering continued remuneration. Employers are not eligible for government subsidies under this scheme.

Business closures

The COVID-19 lockdown prompted closures of retail, gastronomic and tourist outlets. A pandemic-triggered lockdown would be classified as a force majeure incident by Austrian courts, which would therefore have avoided an obligation to continued pay on the part of employers. New legislation changed this long-standing view and now provides that employers carry the burden of continued pay, nonetheless. Employers can then request from their staff that all entitlements to paid leave accrued during previous holiday accrual periods, and also current entitlements of up to two weeks, must be used up, but not exceeding a total period of eight weeks.

Childcare due to school and pre-school closings

Once pre-schools and schools were closed for educational purposes, school children were taught remotely at home and required parental care. As a consequence, the Austrian government introduced a special care leave: an employer can agree with the parent that a care leave of up to three weeks can be taken if this is necessary to care for children not older than 14 years, or for near relatives in need of care. Employees have no entitlement to request this form of leave, but employers introducing the measure are entitled to a subsidy covering one third of the remuneration paid to employees during the care period.

New legislation concerning the home office

In light of the COVID-19 pandemic and the subsequent lockdowns the need for some regulation regarding the concept of home office arose.

There is now a legal definition of the term “home office”, namely: “working in home office means that the employee regularly performs work from their home”. This includes both the home of the employee themselves, as well as the home of “closely related persons”, but excludes other places such as coffee shops or co-working-spaces.

The new law also constitutes that working from home must be agreed between the employer and the employee in writing (although an agreement is not invalid if it is not set forth in a written document). The employer has to provide for the necessary digital work equipment that is needed for home office work. It can also be agreed that employees use their own devices while the employer shall carry the cost.

Accidents that occur while working remotely, or on the way from or to the home office (eg, from the supermarket) are now classified as “accidents that occur during work“ in terms of social security law.

The law governing home office is not temporary, but rather meant to survive the pandemic.

Special paid leave for certain pregnant women

As the COVID-19 virus is especially dangerous to pregnant women, a new law was enforced to protect pregnant women workers from becoming infected. Some pregnant employees now can demand an early paid leave of absence from the start of the 14th week of pregnancy if they meet the following two conditions:

  • the pregnant employee must work at a job where she has physical contact with other people (eg retail personnel); and
  • it must be impossible to change this workplace (eg, by agreeing on remote work).

This law will be in force until 30 September 2021, but might be extended beyond that date (depending on the COVID-19 situation).


Employees are grouped into white-collar and blue-collar workers. According to the legal definition, white-collar workers are employees who are employed in the business of a merchant primarily for the performance of commercial or higher non-commercial services or for clerical work, for example, office staff and sales staff. Blue-collar workers are said to perform “manual” work of a kind that is less demanding of cognitive faculties, such as waiters, craftsmen, drivers, construction workers, and also soccer players. The distinction between white-collar and blue-collar workers has been considered anachronistic for a long time now, and, consequently, Austrian parliament has started a legal initiative to harmonise the legal entitlements of both groups. Most recently, adjustments that have been made concern continued remuneration during sick pay (2018) and harmonisation of notice periods (2021) (see 1.1 Main Changes in The Past Year).

Freelance Service Contracts

A distinction is made between contracts of employment and freelance service contracts. Freelance contracts are not regulated by statute, except for their inclusion as personal service contracts subject to social security contributions. According to settled case law, a freelance service contract is of a more relaxed nature where discipline and oversight is concerned. The “free” employee renders personal services for a definite or indefinite period of time, but without being subjected to the same level of monitoring by the employer pertaining to working time and place of work. The freelance employee is also 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 perform the services owed under the contract.

Mandatory employment legislation seeking to protect the “personally dependent” employee, such as provisions on notice periods (Employee Act), annual leave (Holiday Act), working time (Working Time Act; Act on Rest Periods) and challenge of dismissals (Labour Relations Act) does not apply, nor do collective bargaining agreements.

With regard to contractual relationships covering personal services, a distinction is made between employment contracts, freelance contracts for services and contracts for work (see 2.1 Status of Employee). The employment contract need not be in writing; oral or also tacit/implied employment contracts are legally valid. However, the employer must provide the employee with a written record of the essential rights and obligations arising from the employment contract (service note – Dienstzettel), summarising:

  • the name and address of the employer;
  • the name and address of the employee;
  • the start of employment;
  • the termination date if the employment is fixed-term;
  • the notice terms;
  • the general place of work, indication of alternating work place;
  • the job grade;
  • the job description;
  • the remuneration or salary;
  • the annual holiday entitlement;
  • the hours of work;
  • the applicable collective agreements; and
  • the name and address of the outside severance pay provider.

An employment contract can be concluded for a fixed term or for an indefinite period. Under settled case law, a succession of fixed-term employment contracts is only permissible if economic or social reasons so require. Without such an objective justification, consecutive short-term employments are deemed to be concluded for an indefinite period of time.

Working Hours and Rest Periods

Working hours are regulated in the Working Hours Act, the Working Hours Rest Act and collective-bargaining agreements. The daily standard working time is eight hours, the weekly working time is 40 hours (some collective-bargaining agreements provide for 38.5-hour work weeks). As soon as the normal working hours are exceeded, overtime is accrued, to be compensated with a statutory surcharge of 50%, or time off at a ratio of 1 to 1.5. Many collective-bargaining agreements provide for higher compensation, in particular for work on Sundays and public holidays, and also during night-time. “All in” or flat-rate compensation schemes for overtime worked are permissible, if the employee, on average, receives at least the minimum wage under applicable bargaining agreements. The statutory maximum daily work hours have been set at 12 hours and the weekly working time limit at 60 hours. Also, the average weekly working time must not exceed 48 hours during a period of consecutive 17 weeks.

Employees are entitled to the following rest periods:

  • 30 minutes' rest (lunch break) if the total daily working time exceeds six hours;
  • 11 hours' rest after the end of the daily working time;
  • 36 hours of weekend rest, including the whole of Sunday, starting on Saturday at 1pm; and
  • 24 hours' rest on public holidays.

Part-Time Work and Flexitime

Part-time work is permissible and quite common. An employee is working part-time if the agreed weekly working time is, on average, less than the statutory normal working time. If part-time employees exceed the agreed working time, they are entitled to a statutory overtime bonus of 25%, or time off without a surcharge if this time off is granted within the three months following performance of the work.

In recent years, flexitime agreements have become increasingly popular, allowing employees to determine the start and end of their daily working hours within an agreed timeframe. Where established, a flexitime arrangement must be concluded with the works' council in written form (plant agreement).

Collective Bargaining Agreements

Minimum wages are not mandated by statute, but by collective bargaining agreements, which cover approximately 99% of the Austrian work force. Recently, the social partners, who are the parties to collective-bargaining agreements, representing all employers and the entire work force of a specific trade or industry, have determined that minimum wages under collective-bargaining agreements must not fall below EUR1,500 pre-tax per month (full-time).

13th and 14th Salary Instalments; Performance-Related Bonus; Stock Options

Special bonuses are also frequently agreed in collective-bargaining agreements, consisting of a 13th and 14th salary instalment, usually termed “holiday pay” and “Christmas bonus”, taxed at only 6% and exempt from social security contributions.

It is also increasingly common to agree on performance-related bonus payments; there are generally no statutory restrictions. Other forms of remuneration include commissions and employee stock options.

Holiday Entitlement and Pay

The statutory holiday entitlement is five weeks per year, increasing to six weeks after 25 years of service. During annual leave, the employee is entitled to continued pay. Taking leave requires an agreement between employer and employee, and, generally, neither has the right either unilaterally to take leave or instruct that leave be taken.

Maternity Leave

Expectant mothers are prohibited from performing any work eight weeks before the expected date of birth and eight weeks (12 weeks in the case of a Caesarian section) after giving birth. Instead of continued pay by their employees, female employees receive a weekly allowance (Wochengeld) from the social security provider. Mothers and fathers are entitled to share parental leave up until their child’s second birthday, during which they are eligible to receive an allowance by the government.

Parental Part-Time Employment

If a parent has already been employed for at least three years with their employer (the two-year maternity leave does count against this period) who employs more than 20 staff, he or she is entitled to part-time work until the child's seventh birthday. The regular weekly working time must be reduced by at least 20%, but must not be less than twelve hours. If the employer has fewer than 20 staff, or if the parent has not completed three years of service, and in the absence of a contractual solution, the employee can go to court and seek to enforce a part-time model that suits their needs for child care.

Sick Leave

Employees are entitled to continued pay in the case of sickness or accident, payable by the employer, unless their lack of capacity to perform services had been caused intentionally or with gross negligence. An employee is entitled to full remuneration for six weeks per year of service, and as the length of service increases, so does the entitlement, resulting in continued pay of 12 weeks after 25 years of service.

Following the full pay-entitlement, the employee can additionally claim 50% of the salary for a period of four weeks.


Confidentiality obligations apply to business and trade secrets which have become known to the employee during their professional activities. Under a theory of fiduciary duty, and in the absence of an express clause in the employment contract, employees are solely bound by secrecy obligations during the term of their employment relationship. It is possible and advisable, though, to agree on a far-reaching confidentiality obligation in the contract that also survives termination. Such confidentiality obligations are also outside the scope of the rules on post-termination non-competes and can therefore be concluded for periods exceeding one year. The breach of the duty of confidentiality constitutes a ground for dismissal.

In 2016, the EU issued a directive on the protection of trade secrets, which was transposed into Austrian national law through an amendment of the Act against Unfair Competition in 2018. The directive provides for a uniform definition of the term “trade secret”, classifying it as information which is secret, has a commercial value because it is secret, and has been subject to reasonable steps by the employer to keep it secret. The measures for the protection of trade secrets are only applicable if the company has actively taken appropriate confidentiality measures to protect its information. It is thus essential to review existing employment contracts and samples to ensure they reflect the amendment of the Act against Unfair Competition.

Employee Liability

The Employee Liability Act modifies general tort law and principles under the Austrian Civil Code in that employees’ liability in relation to their employers can be reduced to zero if damage was caused with only a lesser degree of fault. The liability is graded according to the degree of negligence on the part of the employee: in the case of an “excusable misconduct” (the slightest form of negligence), the employee is exempt from any obligation to pay compensation; in the case of slight negligence, the court may, for reasons of equity, exclude liability in part or in its entirety; and even in a case of gross negligence, the court may decide that compensation to the employer should be reduced in part (although not entirely).

If the employee inflicts damage on a third party while performing services (eg, a customer), and the employee holds the third party to be harmless following a claim supporting compensation, the employee has a right of recourse against his or her employer if damage was caused with only a lesser degree of fault.

Statutory Non-compete during Employment

White-collar workers must neither operate an independent commercial enterprise during their employment without the employer's approval nor conduct commercial transactions in the employer's branch of business on their own or a third party's account. A violation of this statutory prohibition of competition during the term (Section 7 of the Employee Act) is a ground for dismissal.

Non-compete Post Termination

Restrictive covenants pertaining to post-termination periods are also permissible, following some statutory restrictions (Secs 36 et seqq of the Employee Act).

A post-termination non-compete, within the purview of those statutory restrictions, is defined as an agreement that limits the employee's freedom to pursue his or her occupation for the period after the termination of employment. The restrictions on post-termination activities (employed, self-employed or otherwise) may relate to a specific group of customers (customer-protection clause), a specific industry, or also locally to a specific territory.

A non-competition clause is null and void if the employee is a minor at the time the non-competition clause is concluded, or if the employee's remuneration in the last month of their employment does not exceed an amount equalling 20 times the daily maximum contribution basis under the General Law on Social Security (currently: EUR3,700.00 per month). Moreover, non-competition clauses are only effective to the extent that the restriction relates to the activity in the employer's line of business, does not exceed a period of one year and does not render the employee's professional advancement unreasonably burdensome.

A post-termination non-compete is also not enforceable if the employer gave notice without cause, or if the employee had terminated the employment relationship with cause (eg, breach of contract by the employer). Non-compliance with statutory restrictions pertaining to the scope of the non-compete (territory; activity) does not render the entire provision invalid, but only the part exceeding the statutory limits. The question of validity must be considered on the basis of equity considerations.

Compensation Payments for Specific Performance

Generally, enforceability of non-competes does not require payment of compensation by the employer, unless the employer gave notice (without cause) and still wishes to enforce the clause. In such a case, the employer had expressly to state, together with the notice letter, that they wish to invoke their statutory right to enforce the non-compete clause and offer continued pay during the restrictive period (one year maximum).

Remedies in the Case of Breach

If an employee violates a competition clause, the employer has the following options.

  • To file for damages, which is difficult to prove and is the least advisable avenue to pursue.
  • To request specific performance and seek injunctive relief, which is the most likely and advisable route.
  • To collect a contractual penalty if such a penalty had been agreed in advance. Contractual penalties are, however, also not advisable. In the case of breach:
    1. the employer is then restricted from suing for specific performance;
    2. contractual penalties are capped at six times the employee’s net salary; and
    3. under more recent case law by the Austrian supreme court, a new, competing employer could agree to hold the breaching employee harmless by offering a signing on-bonus equalling the contractual penalty.

Customer and Supplier Protection

A customer- or client-protection clause prohibiting an employee from entering into business relations with customers of the employer post termination are also deemed competition clauses and such a clause is therefore also subject to the statutory restrictions delineated under 3.1 Non-competition Clauses. Supplier-protection clauses prohibiting the employee from entering into business contacts or maintaining business relations with the employer's suppliers post termination are also subject to those restrictions.

Non-solicitation/Non-poaching Clauses

Clauses seeking to avoid solicitation of (former) co-workers by the employee are viewed differently. Such clauses prohibit the employee from enticing away employees of their common (former) employer but need not pertain to a specific competing activity following termination of employment. The restrictions on competition clauses are not applicable so the agreement of a contractual penalty does not exclude specific performance and contractual penalties are also not capped. However, the judicial right of moderation is applicable.

Principles and Legal Sources

The protection of employee data is covered under a combination of tightly interwoven legal sources, namely employment contract law, statutes governing labour relations and, of course, data protection law. The EU’s General Data Protection Regulation (GDPR) is directly applicable in Austria, and the Austrian Data Protection Act additionally covers certain specifics of the Austrian legal landscape.

When handling the personal data of their employees, employers (as data controllers) must comply with the principles of the GDPR, including:

  • the existence of a legal basis for data processing;
  • secure storage of employee data;
  • limitation of data to what is necessary for the purposes of the processing;
  • personal data must be accurate and, where necessary, kept up to date;
  • transparent processing.

The processing of personal data is only lawful if one of the following conditions is met:

  • the data subject has given his or her consent to the processing of personal data;
  • the processing is necessary for the execution of the employment contract;
  • the processing is necessary for compliance with a legal obligation to which the data controller is subject;
  • the processing is necessary in order to protect the legitimate interests of the data controller or a third party, except where such interests are outbalanced by the interests or fundamental rights and freedoms of the data subject.

Sensitive Data

The processing of personal data revealing racial or ethnic origin, political opinions, religious or philosophical beliefs or trade union membership is particularly sensitive, as is the processing of genetic data, biometric data, health data or data concerning a person's sex life or sexual orientation. The processing of sensitive data is generally prohibited by the GDPR, unless one of the exceptions listed exhaustively in the regulation is applicable.

Under the GDPR, the employee has certain rights that they can enforce against the employer. The employer must provide the employee with all information on data processing in a comprehensible and transparent form, free of charge and without delay. The employee has the right to obtain information on the origin of the data, the recipients, the purposes of processing, the legal basis and the storage period. If the data were processed incorrectly, the employee has a right to rectification. Furthermore, the employee has the right to request deletion if the data have been processed unlawfully, if there is no legal basis, if the data are no longer needed, or if the employee withdraws his or her consent to the processing of their data.

Under the terms of the Data Protection Act, employees must keep confidential any data that has been entrusted to them or has become accessible to them as a result of their employment.

Free Access to Labour Market

In accordance with the principle of free movement of labour, employees from the European Economic Area (EEA) do not require special permits to work in Austria. Since 30 June 2020, the transitional provisions for Croatian citizens restricting access to the labour market have expired. Foreigners who are not citizens of an EEA member state who have the residence titles "family member" or "permanent resident EU" also have free access to the Austrian labour market.

Red-White-Red Card

Foreigners who are not citizens of an EEA member state may apply for a Red-White-Red Card (RWR Card), if they meet certain criteria. Applicants must be part of one of the following particular occupational groups:

  • highly qualified employees;
  • employees working in shortage occupations;
  • self-employed key personnel;
  • other key personnel;
  • graduates of an Austrian university;
  • start-up founders.

The application for the RWR Card is either submitted to the competent Austrian representative authority abroad (embassy or certain consulates) or, under certain legal conditions, to the competent authority in Austria. The authority is responsible for issuing the residence permit. It forwards the application to the competent regional office of the Austrian Labour Market Service (AMS), which decides whether the requirements for the granting of an RWR Card have been met. These include the general requirements for granting residence permits (secure livelihood, health insurance, accommodation) and, additionally, the following special requirements:

  • the achievement of a minimum score (based on a defined skill set) mandated under the Act Governing the Employment of Foreign Nationals;
  • a secure job with a minimum gross salary set by the Act Governing the Employment of Foreign Nationals;
  • for the vacant position to be filled, there is neither a national nor a foreigner available on the labour market who is willing and able to perform the employment applied for (labour market assessment).

Achievement of the minimum score depends on criteria laid down by law, including education, professional experience, age and language skills. After the AMS has carried out the labour market assessment, the application is returned to the settlement authority, which finally issues the combined residence and work permit. The RWR Card is employer-bound and is issued for a limited period of two years.

Blue Card EU

Particularly highly qualified academics from non-EEA states can apply for a Blue Card EU. Applicants must fulfil the general requirements for the granting of residence permits. In addition, the following requirements must be met:

  • completion of a college degree or similar (study time at least three years);
  • a binding job offer for a highly qualified employment for at least one year;
  • a gross annual salary corresponding to 150% of the average Austrian gross annual salary (2021: EUR65,579).

In contrast to the RWR card, there is no minimum score required for the Blue Card EU. However, the mandatory minimum salary is higher. The residence and employment law procedure is the same as for the RWR Card, and the Blue Card EU is also employer-bound. The Blue Card EU is issued for a limited period of two years.

Red-White-Red Card Plus

The RWR Card Plus entitles foreigners who are not citizens of an EEA member state to settle and work for a limited period of time in any part of Austria, in other words, it is not employer-bound. The RWR Card Plus can be obtained if the applicant has already held an RWR Card or a Blue Card EU for two years and has been employed for 21 months within the last two years. Family members of employees with a valid RWR Card or Blue Card EU can also apply for an RWR Card Plus. The RWR Card Plus is issued for a maximum period of three years, with the possibility of renewal.

Work Permit

A normal work permit is issued to the employer and entitles them to employ the foreign worker concerned in a specified workplace. In order to apply for a work permit, the applicant/employee must already have obtained a valid residence or settlement permit. Work permits are particularly relevant for students, seasonal workers and harvest workers (all others usually apply for either a RWR Card or Blue Card EU). The procedure is conducted at the regional office of the AMS. The work permit is issued for a limited period of one year and can be extended by one year at a time.

Posting Permit

For foreigners who are employed in Austria for less than six months by a foreign employer without a permanent establishment in Austria, a posting permit issued for a maximum of four months is sufficient.

Intra-corporate Transferees (ICT)

This permit is aimed at key personnel from non-EEA states (executives and professionals) who are being transferred within the company to an Austrian branch of a foreign company.

Apart from general registration requirements such as notification requirements or registration with social security, there are no particular registration requirements for foreign workers.


The Austrian Trade Union Federation (ÖGB) with its specialist labour unions is the only Austrian organisation representing the interests of employees based on voluntary membership. Not only employed personnel, but also unemployed and retired people are represented. The tasks of the ÖGB are to promote trade union action to bring about favourable employment relations, not only by concluding collective agreements with the competent employer organisation (Chamber of Commerce), but also by participating in the law-making process through legal opinions and negotiations with their employer-counterpart. Other tasks include providing free legal protection for their members and fostering the education and training of employees.

The Federation of Trade Unions is divided into seven specialist labour unions, including the Union of Private Employees, the Union of Public Employees, the Union of Production Workers and the Union of Transport and Services.

Employees who wish to join a trade union are protected by the constitutionally guaranteed freedom of association. If employees are dismissed because of their membership in a trade union, they can challenge such an unfair dismissal in court.


Union membership has been decreasing constantly since the 1980s, when approximately 60% of the Austrian work force was unionised (today, only approximately 32% of the workforce 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 members has only decreased from approximately 1.7 million to 1.2 million over the same period. Unions, however, are very much ingrained in the Austrian employment landscape and still have considerable political clout.


The Labour Relations Act provides for the establishment of a works council in companies with at least five full-time employees with permanent employment. However, in practice, only larger employers with 50 staff or more have an elected works council and no sanctions are imposed on either staff or employer where the work force fails to hold elections. The works council under the Labour Relations Act is the only representative body on the company level acknowledged by law and authorised to represent staff in connection with certain tasks that are exhaustively enumerated in both the Act and applicable collective-bargaining agreements.

Organisational Principles

Depending on the size and type of the workforce, there must be separate works councils for white-collar and blue-collar workers, a general meeting, a central works council, a group representative body and, under certain legal premises, a European works council. The number of works council members is dependent on the number of employees. The works council will consist of:

  • one member in operations with fewer than ten employees;
  • two members in operations with ten to 19 employees;
  • three members in operations with 20 to 50 employees;
  • four members in operations with 51 to 100 employees;
  • one additional member for each 100 additional employees; or
  • in organisational units with more than 1,000 employees, one additional member for every 400 employees.

The works council represents the entire workforce, irrespective of union affiliation or membership of individual workers/employees. Members of the works council need not also be trade union members. The works council election mirrors the general election principles that also apply with respect to parliamentary elections (equal and direct vote, secret ballot, proportional representation). The period of office of the works council is five years, and re-election is possible.

The employer must provide the works council with equipment necessary to fulfil its statutory tasks (eg, separate office space within the employer's premises; office equipment). The employer and works council must consult quarterly, and the works council must convene at least once per month.

Special Rights/Protections of Works Council Members

Works council members are not bound by instructions when carrying out their duties, must not be disadvantaged or privileged and are bound by confidentiality obligations. Members of the works council enjoy special protection against dismissal/termination. They may only be dismissed for reasons specified by law (in essence: material breach of contract, criminal conviction), and the prior consent of the labour court (see 7.5 Protected Employees).

Employee rights, voiced through the works council, include the right to information, disclosure, monitoring, consultation, objection and approval. The employer and the works council can conclude plant agreements, so that some measures that the employer wishes to introduce can be vetoed by the works council, while others can be coerced by either the employer or works council upon the other side before a special panel set up at the labour court in the event of a refusal to consent to a measure. Other types of plant agreements are voluntary and cannot be vetoed or enforced by either party through legal means. Plant agreements that require the approval of the works council and can effectively be vetoed include the introduction of control measures that affect human dignity, such as surveillance cameras. Enforceable plant agreements include, for example, the introduction of systems for the automated transmission of employees' personal data, introduction of disciplinary measures, regulations or the setting of working hours and social plans. Voluntary plant agreements include introduction of bonus and pension systems.

In addition, the works council has rights of participation in the hiring, transfer and promotion of employees and must be informed about terminations/dismissals (see 7.1 Grounds for Termination). The works council must also be represented on a supervisory board of employer; one employee representative must be appointed to the Supervisory Board for every two shareholder representatives.

Transfer of Undertaking

Furthermore, the works council has participation rights in the event of a transfer of business (eg, restriction, relocation or closure of the entire business, mass dismissals, introduction of new working methods). It has to be informed about the planned changes in operations and can make suggestions to mitigate any detrimental consequences for the workforce resulting from the transfer of undertakings. If a transfer of business prompts substantial hardship for a significant part of the workforce, the works council can enforce the conclusion of a social plan.


The most important mechanism of collective labour law in Austria is the collective-bargaining agreement. In general, it is concluded by the competent branch of the Chamber of Commerce and the Austrian Trade Union Federation or its separate labour unions.

Collective bargaining agreements are not concluded on the company level, but for entire trades and industries. For instance, there is one collective-bargaining agreement for all of Austria’s metal workers, regardless of who their employer is, if their employer is a member of the competent branch of the Chamber of Commerce (membership is mandatory for all employers conducting a trade or industry, and their affiliation with a specific branch is determined by the type and scope of their business licence).

99% of all workers (both white- and blue-collar) are covered under one or more of the several hundred collective-bargaining agreements currently in place across various trades and industries. It is possible, however, to conclude company collective agreements, but this rarely happens and mostly concerns very large employers (eg, the Austrian carrier “Austrian Airlines”).

Normative Effect

A collective bargaining agreement is not only a contract between the parties but also has a normative effect in that its provisions are not only binding on the parties to the agreement, but in particular also on their associated members (employers and employees of the respective sector).

While on the employer side, membership with a professional association of the Chamber of Commerce determines the application of a particular collective bargaining agreement, it is not a legal requirement for employees to be a member of the trade union acting on their behalf for the collective-bargaining agreement to become legally binding. Once an employer is bound by its terms, all of his or her employees are also defined under the personal scope of the agreement. Rights and obligations under a collective bargaining agreement thus apply, regardless of a unionisation of the work force.

Subject Matter/Termination

Collective bargaining agreements must not run counter to statutory law in that the terms of any such agreement can only be more beneficial than statutory regulations, otherwise the respective provision in the collective-bargaining agreement would not be enforceable.

Collective bargaining agreements set forth rights and obligations of employers and employees on such diverse issues as minimum wages, working hours, vacation, notice terms and introduction of pension schemes. The current minimum wage under any collective-bargaining agreement is at least EUR1,500 (pre-tax), and many agreements provide for a reduction of weekly work hours from 40 hours to 38.5 hours.

Collective agreements can be concluded for a limited or unlimited period of time. Signed for an unlimited period, they can be terminated not earlier than after one year.


Subject to contractual or statutory default notice terms, the employer can generally terminate the employment relationship without stating a reason or motivation. This is also true with respect to a summary dismissal. The dismissal (oral or written) itself need not state the reason for the employer’s decision. Only if the employee then seeks to challenge his or her termination/dismissal before a court must the employer show sufficient cause.

Pre-notice Proceedings (Works Council Involvement)

The Labour Relations Act requires employers to notify the works council (where elected) of any intended ordinary termination at least one week before notice is given. In the case of a summary dismissal for cause, which is always given with immediate effect, no such restrictions apply, but the employer must notify the works council that a summary dismissal has occurred.

Following receipt of information of the ordinary termination of a specific employee intended by the employer, the works council has one week to state its position on the measure. A notice of termination given by the employer before this one-week period has lapsed is legally void. The works council has three options:

  • it can expressly consent to the termination of the employee, in which case the employee is barred from challenging his or her dismissal before a court on grounds that the termination lacks social justification (general protections against termination/dismissal). The employee can, however, still challenge on other grounds (unfair dismissal, discrimination claim; see 8.1 Wrongful Dismissal Claims);
  • it can expressly oppose the termination, in which case the works council can also challenge the termination on social grounds on behalf of the employee (or the employee also can, on any other ground); and
  • it can refrain from commenting on the termination, ie, remain silent, in which case the employee has all the legal remedies to himself or herself, including the general protection against dismissal/termination which is commonly used by plaintiffs to invoke a lack of social balance and undue social hardship prompted by the redundancy.

Statutory provisions on the special protection against dismissals/terminations must be observed (see 7.5 Protected Employees).

In the absence of a works council, employees can challenge a termination on the same grounds within two weeks following receipt of the respective notice.

Early Warning System

Redundancy measures exceeding certain thresholds require compliance with specific procedures and notifications under labour-market legislation.

Notice Periods

The statutory default rules on notice terms provide for staggered notice periods depending on years of service (some collective-bargaining agreements mandate that previous years of service with other employees must be taken into account for purposes of this calculation):

  • minimum notice period of six weeks, increasing to
  • two months after two years of service;
  • three months after five years of service;
  • four months after 15 years of service; and
  • five months after 25 service years

The statutory notice periods are minimum periods. Collective-bargaining agreements and individual employment contracts can therefore only provide for longer notice periods.

Also, notice can only be given as of certain dates. The statutory notice date is the end of a calendar quarter, but employment contracts can provide for notice dates ending as of the end of a month and also on the 15th day of a calendar month.

Payment in Lieu of Notice; Compensation Payment; Writing Requirement

If an employer does not comply with the contractual or statutory notice terms when giving ordinary notice, or if the employee is summarily dismissed without cause, the employee is entitled to a compensation payment which puts them in the same financial position they would have been in had the employer correctly given notice under applicable notice terms.

Alternatively, the employee can challenge the termination/dismissal and move for reinstatement of employment (see 7.1 Grounds For Termination).

Neither an ordinary notice nor a summary dismissal must be in writing, although this is advisable for evidentiary purposes, and for some collective-bargaining agreements; however, individual employment contracts often contain a clause requiring a termination notice to be made in writing.

Severance Pay (Old Scheme)

Upon termination of employment, the employee can be entitled to severance pay, depending on the applicable severance scheme.

The "old" severance pay scheme’s personal scope covers employment relationships that commenced before 1 January 2003 (and that have since been abolished), and that have lasted for at least three years. The severance is calculated as a multiple of the remuneration payable to the employee before termination, as follows:

  • two monthly salaries, increasing to
  • three monthly salaries after five years of service;
  • four monthly salaries after ten years of service;
  • six monthly salaries after 15 years of service;
  • nine monthly salaries after 20 years of service; and
  • 12 monthly remunerations (ie, annual income) after 25 years of service.

Employees forfeit their claim to receive the "old" severance pay from their employer if they themselves resign or terminate without cause, or if they are summarily dismissed for cause. This system was conflicting with job mobility, because, often, employees only stayed on with their employer so as not to forfeit their severance pay entitlements and, instead, hoped for their employer to instigate a termination. The “old” system was funded and paid for by employers.

Severance Pay (New Scheme)

The "new" severance pay scheme in place for all employment relationships which commenced after 31 December 2002 requires employers to pay monthly contributions amounting to 1.53% of the pre-tax salary to an outside severance fund provider (special-purpose affiliates of insurers and banks) who then also manages and invests funds received from employers. The employee is entitled to the "new" severance pay regardless of how the employment relationship ended, although summary dismissals, resignations by employee and terminations before three years of service have lapsed trigger waiting periods. In any event, however, employees can “piggy-back” their entitlements regardless of how the employment relationship ended and all entitlements will vest, but only once the employee retires.

Grounds for Summary Dismissal

Employees may be dismissed with immediate effect for cause, including the following reasons:

  • severe breach of fiduciary duties;
  • incapacity to perform the agreed services;
  • violation of restrictive covenants;
  • acting against the employer’s instructions; or
  • material misconduct against employer or co-workers.

Procedure and Formalities

A summary dismissal need not be made in writing; oral communication, email or text/social media message will suffice.

Where staff have elected a works council, the employer must inform the works council immediately of any summary dismissal and, upon request, consult with the works council. The works council need only be informed after the dismissal.

The proceedings delineated under 7.1 Grounds For Termination apply accordingly.

If the dismissal lacks sufficient grounds, the employee can opt either to claim money damages (compensation claim), or to challenge the dismissal in court, moving for reinstatement of employment.

Termination agreements are permissible and, in general, no specific procedures or formalities must be observed.

Exceptions to this rule apply where the staff have elected a works council. An employee can request to be counselled by the works council on the consequences of such a move, and within two days following his or her request, a termination agreement cannot be validly concluded.

Another exception concerns employees on maternity or paternity leave and apprentices. Termination agreements with parents on leave must be made in writing. If the parent is a minor, the agreement must also include a written certification that the employee has been counselled by the labour court or the Chamber of Employees on his or her rights and on the special protection against dismissal while on leave. In the case of apprentices, identical legal requirements apply.

The following categories of employees enjoy special statutory protection against dismissal:

  • pregnant women;
  • parents on maternity or paternity leave;
  • members of the works council;
  • apprentices;
  • disabled employees; and
  • employees on military draft.

Protected employees may only be dismissed if there is a statutory reason for dismissal and the labour court or, in the case of the disabled, the Disability Committee (a specialist panel established at the ministry of social affairs) has given its prior consent. Without this consent, the dismissal/termination is legally void and the affected employee can opt either to challenge the dismissal and request reinstatement, or to accept the illicit termination and claim damages for wrongful dismissal.

Dismissals can be challenged before a court either if socially unfair or if premised on an inadmissible motivation (see 9.1 Judicial Procedures). If successful, the court challenge results in a reinstatement of the employment relationship and backpay of all income the employee would have received without the dismissal. Losing such a court battle can therefore be rather costly for employers, and often, such cases are settled in or out of court.

Lack of Social Fairness (Operational Reasons)

The assessment of social unfairness is carried out in a three-step test.

Firstly, the employee must show that, because of the dismissal, their economic interests are significantly impaired and that they are put at a disadvantage far worse than should be expected from a dismissal process. The court then assesses the entire economic circumstances of the employee, such as total family income and assets, caring responsibilities, costs of living and, most importantly, the court will appoint an expert who can testify as to whether the employee’s chances of finding other gainful employment within a reasonable time period are intact.

Secondly, in defence of such a showing by the employee, the employer can argue that there are personal or operational reasons justifying the dismissal, nonetheless. Such operational reasons for dismissal include a decline in orders/business (eg, due to the COVID-19 pandemic), outsourcing of operational units and other restructuring measures. The business judgement of the employer will not be put into question, but the employer must show that the dismissal serves a viable business purpose.

In a last step, and only if the employee and the employer could each meet their burden of proof, the court will then weigh against each other the conflicting interests involved and conclude whether the employee is harder hit by the dismissal or the employer by a reinstatement of the employee.

Lack of Social Fairness (Personal Reasons)

Instead of operational or business-related reasons, the employer can also raise a defence that seeks to justify the dismissal through a misconduct on the part of the employee. Any such misconduct must be serious to warrant a dismissal if the employee was successful in showing that his or her interests have been materially impaired through the dismissal.

Inadmissible Motivation

A dismissal is also not warranted if the motivation behind it is rooted in the employee’s:

  • union membership;
  • instigation or administration of works council elections;
  • activities as safety officer or occupational physician;
  • military draft; or
  • assertion of claims pertaining to the employment relationship.


The Equal Protection Act provides for equal treatment in connection with the employment relationship. Any discrimination based on gender, ethnicity, religion or belief, age or sexual orientation is prohibited. Employees with a disability are protected under the Disabled Persons in Employment Act. The prohibition of discrimination applies to the conclusion and termination of employment relationships, the determination of remuneration, career advancement and other working conditions. This includes both direct discrimination, which is based directly on the protected characteristic, and indirect discrimination, where a seemingly neutral differentiation is meant to justify an act of discrimination.


Harassment is a separate discrimination issue. Sexual harassment is any unwanted or offensive conduct that violates the dignity of the person concerned and creates an intimidating environment. The harassment may originate from the employer or a co-worker. The employer also discriminates if, in the case of harassment by third parties, he or she fails to take appropriate remedial action.

Burden of Proof

In the case of discrimination, the burden of proof has been relaxed. An employee claiming discrimination only has to show credible evidence but need not prove beyond doubt that a discrimination occurred. It is then up to the defendant to show that, when weighing all circumstances, it is more likely that a motivation other than the evidence shown by plaintiff was the reason for the unequal treatment.


Depending on the facts of the case, the discriminated employee may be entitled to injunctive relief, specific performance (eg, promotion) or damages. In the case of harassment, the employee is entitled to reasonable compensation from the employer who has violated the obligation to remedy the situation (minimum EUR1,000).

Labour Courts

Jurisdiction in employment matters is exercised by the courts in senates composed of judges and expert lay judges. The lay judges are representing the circle of employers and employees (elected by employer and employee representatives). The regional courts act as competent labour and social courts in the first instance (in Vienna, an independent “Labour and Social Court” is established as the court of first instance at regional level).

Rulings are adopted by a three-member senate, consisting of one professional judge as chairman, and one expert lay judge each from the circle of employers and employees. An appeal against a judgment of the regional court may be filed with the competent court of appeals within four weeks. The court of appeals also decides in special senates (three judges, two lay judges). An appeal against the decision of the court of appeals can be filed with the Austrian supreme court, if the judgment depends on legal questions of general importance (ie, questions that are not only relevant for the individual case, but may serve as a precedent for similar cases).

Attorneys/Qualified Representatives

In employment-related disputes, the parties need not be represented by a lawyer in the first instance. They may conduct the proceedings themselves, or be represented by a lawyer, another “Qualified Representative” (eg, functionaries of statutory representative organisations, such as the Chamber of Employees and the labour union), or other representatives enumerated in an applicable statute (eg, members of the works council). In the second instance, representation must be by a Qualified Representative, and at the Supreme Court, representation by a lawyer is mandatory.

Class Action

There are two types of special declaratory proceedings in employment-related matters that are comparable to class actions (but rarely used in practice): the works council or the employer may file a declaratory action regarding the existence or non-existence of rights or legal relationships that affect at least three employees of the respective company. Alternatively, any employee or employer of the representative organisation with the competence to negotiate collective bargaining agreements (Chamber of Commerce, labour union) may file a declaratory action with the Austrian Supreme Court regarding the existence or non-existence of rights or legal relationships affecting at least three employers or employees.


Arbitration agreements are invalid and unenforceable in disputes on matters governed by the Labour Relations Act (including wrongful dismissal claims based on social unfairness/inadmissible motivation; see 8.1 Wrongful Dismissal Claims). In other labour-related matters, an arbitration agreement may validly be concluded only in respect of legal disputes that have already occurred, but not in relation to potential future disputes (with the exception of arbitration agreements that are concluded with managing directors/management board members, who are not classified as “employees” in the legal sense). Arbitral awards may be submitted to judicial review by a regular court.

Other Dispute Resolution

The parties to an employment contract may validly agree on conciliation clauses stipulating the dispute to be referred to a conciliation body (not an arbitration tribunal) before the regular court is called upon.

Disputes between employer and employee representative organisations concerning the conclusion or amendment of a collective bargaining agreement can be brought before the Federal Settlement Office (Bundeseinigungsamt), which initiates settlement proceedings.

Disputes related to the conclusion, amendment or cancellation of plant agreements between the employer and the works council may be brought before an ad hoc conciliation committee (Schlichtungsstelle) established upon request of a party to the plant agreement with the competent labour court (eg, on the terms of a social plan). An appeal against the decision of the conciliation committee can be lodged with the Federal Administrative Court.


In general, the prevailing party in judicial proceedings is awarded attorney’s fees incurred, which have then to be reimbursed by the other party (the amount of fees to be reimbursed is governed by statute, depending on the amount at issue and the type of procedural act, eg, court hearing, written submission, etc). If functionaries of statutory interest groups or voluntary professional associations have intervened as Qualified Representatives for the prevailing party, applicable statute provides for a flat-rate reimbursement of expenses.

Special Disputes

In disputes related to matters under the Labour Relations Act (in particular, wrongful dismissal claims based on social unfairness/inadmissible motive), the prevailing party is not entitled to reimbursement of attorney’s fees, ie, each party has to bear its own representative costs, irrespective of the proceedings’ outcome (with the exception of attorney’s fees incurred in proceedings before the Supreme Court).

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Trends and Developments


Fellner Wratzfeld & Partners has a team of more than 120 highly qualified legal personnel and is one of Austria’s leading business law firms based in Vienna. Its major fields of specialisation include banking and finance, corporate/M&A, employment, real estate, infrastructure and procurement law, changes of legal form, reorganisation and restructuring. Fellner Wratzfeld & Partners mainly represents Austrian and international private companies but also has clients from the public sector. The firm advises renowned credit institutions and financial services providers on financing projects. Its expertise has proven its worth repeatedly, but also in regard to financing company reorganisations. The firm draws upon substantial experience gained in the financing of complex consortia in the last few years and has been, and still is, involved in the largest banking and finance cases in Austria.

Trends and Developments in Austrian Employment and Labour Law in Light of COVID-19

The trends and developments in Austrian labour law were characterised by efforts to contain the spread of COVID-19 and to provide answers to the challenges posed the pandemic. This overview intends to comprehensively summarize the measures and goes into two essential legislative projects, namely the short-time work (during the pandemic) and the home office regulation (as a legacy of the pandemic) in more detail.

Containing COVID-19

The sudden emergence of the COVID-19-pandemic confronted governments with an unprecedented challenge. Protective measures had to be developed, evaluated, and implemented to contain the spread of COVID-19. The pandemic required special measures to protect the population. The protective measures applied generally, but had a particularly large impact on the way in which work could be carried out.

The government

For protection, the government adopted regulations for the entire population, such as the wearing of a face masks, the observance of minimum distances, restricted hours and entrance test to certain activities. In addition, the government established a protective umbrella over various industries and population groups that are particularly affected by the COVID-19 pandemic. The measures introduced were intended to reduce the risk of the virus infection spreading. The government ensured protection in all areas of life, including the workplace.

Additionally, the government has taken measures to secure jobs and industries that are affected by the COVID-19 pandemic. In order to protect particularly vulnerable groups of people, the government has adopted special exemptions with continued payment of wages or special care time absence.


Employers in particular are facing new challenges since they are legally obliged to protect the health of all employees and to integrate and implement suitable measures in the company. This obligation is derived from the employer's duty of care, the Austrian Employee Protection Act and the associated regulations. Therefore, employers and employees have been forced to adapt to a new normality within a very short time. Driven by the idea of social distancing to stop the COVID-19 virus spreading, working from home, short-time work and/or working with face masks determined the everyday working life of many people during the COVID-19 pandemic. Likewise, the testing and vaccination strategy influenced employers and encouraged them to have in-company testing and vaccination.

In-company testing

Basic principles

In order to contain the spread of COVID-19, the government is focusing on the most complete and recurring testing of all persons living and working in Austria. To ensure this, companies have been called upon to set up their own test lanes or test facilities.

If employers meet certain requirements, the company test lane is subsidised by the government. The subsidy creates an incentive to conduct company testing for COVID-19. This is primarily to protect employees from contracting COVID-19 and to keep supply and value chains intact. Through the test lane, the employer is able to test employees as well as non-company personnel (customers) and thus actively contain the spread of the virus. Companies with more than 50 employees are connected to the federal testing platform. Special regulations apply to companies with less than 50 employees.


The Company Testing Act sets out the framework conditions for company testing. Funding is provided for the performance of in-company testing for COVID-19 in companies and work sites in Austria on employees and/or persons outside the company. The applicant must have its registered office or a place of business in Austria and legally operate the company on its own account and in its own name. The funding is available to existing and newly established companies in all sectors and of all sizes, legally established professional interest groups and other organisations (eg, Austrian Federation of Trade Union).

Only antigen test kits that have CE-certification, a sensitivity of at least 90% and a specificity of at least 97%, and approval for a nose-throat (nasopharyngeal) swab may be used. The company test lane must be under the supervision of a designated medical personnel (eg, physician). The swab test may only be performed by personnel who are professionally qualified. If all requirements are met, a funding of EUR 10.00 is granted for each antigen test performed. It is also possible to use the PCR-test method in the test lane.

Another advantage of setting up a company test lane is that it can be linked to the federal government's testing platform. Thus, the result of the tested person is electronically transmitted to it and included in the federal database. The result is accepted as proof of entry to the hospitality industry, travel or other activity where a negative test is required.

There are special regulations for companies with up to 50 employees. For these small companies, the number of tests performed must be confirmed each day by the staff taking the swab and weekly by the medical supervisor. These confirmations as well as the invoices for the purchase of the antigen or PCR test kits, proof of incidental costs and the respective product sheet must be kept for control purposes. For small companies, connection to the federal testing platform is not mandatory.

The funding program for company testing has been extended until the 30 September 2021. According to the associated ordinance, a total of up to EUR100 million is available for the funding program, whereby in principle not only employees but also external persons can be tested.

Test obligation

Employers are not obliged to integrate a company test lane in the company. In principle, employees do not have to be tested against COVID-19 and can - without legal basis - re-fuse a test. The employee does not have to expect any consequences as a result (termination or dismissal).

However, in order to contain the spread of COVID-19, the social partners have concluded a general collective agreement. This applies to all companies for which the chamber of commerce has the collective bargaining power and to all employees employed in such a company. The general collective agreement came into force on 25 January 2021 and is valid until 31 August 2021. The general collective agreement stipulates that employers are obliged to release employees during participation in an antigen or PCR test with continued payment of wages. Furthermore, a prohibition of discrimination and a mask break have been agreed.

Company vaccination

In Austria, the (nine) federal states are responsible for the logistics of carrying out COVID-19 vaccinations. The federal states determine the vaccination options for organisations, associations and companies independently. Information and contacts are made directly with the federal states. Employers have been offered the opportunity to vaccinate all employees through a company vaccination program.

In addition to the state-specific regulations, general regulations must be observed. A needs assessment of employees must be carried out, suitable infrastructure and medical personnel must be available, registration in the electronic vaccination passport must be guaranteed and the approval of the state vaccination co-ordinator is required.

Under current law, participation in COVID-19 vaccination is voluntary, and without a legal basis, mandatory vaccination cannot be established in the employment relationship.

Although the employer may inquire about the employee's vaccination status because it is of great interest. If there is a danger to life and health, questions about health status are permissible. The highly contagious and dangerous virus will therefore allow the question about the vaccination status.

If negative consequences to the company are substantiated by the refusal to vaccinate, a justification for termination may exist. Refusal to receive the COVID-19 vaccination may justify dismissal if the vaccination is an absolute requirement for the performance of work and the employee becomes wholly incapable of performing the job duties because of the refusal. Intentional concealment of the immune status or presentation of a falsified certificate may satisfy the ground for dismissal for lack of trustworthiness.

Exemption of vulnerable employees

Employees who have been exposed to an increased health risk have been exempt from duty with continued pay since May 2020. People with chronic pre-existing conditions and persons older than 65 years are particularly at risk of suffering a serious illness. Chronic pre-existing conditions are defined as, for example, respiratory and pulmonary diseases, diabetes, cardiovascular diseases and persons with pre-existing disease were given a COVID-19 risk group certificate. Due to the decreasing number of infections in connection with the increasing number of vaccinations and the resulting lower risk of infection, there is no longer any need for a special exemption. As of 1 July 2021, all certificates for exemption of members of the COVID-19 risk group lost their effectiveness. Pregnant employees may continue to be exempted until 30 September 2021.

Pregnant employees are at increased risk of serious illness from the 14th week of pregnancy. Since 1 January 2021, pregnant employees with work requiring physical contact with other persons have a right to time exemption. The employer must check whether a change in working conditions, transfer to another workplace or the possibility of home office can reduce the risk. If there is no possibility of reducing the risk, there is a claim for time ex-emption with continued payment of remuneration.

Since vaccination for pregnant employees has only recently been recommended, it cannot be guaranteed that pregnant employees are exposed to a low health risk at the workplace. The government has therefore decided to extend the special exemption for pregnant employees until 30 September 2021.

Accordingly, unvaccinated pregnant employees who have physical contact with other persons must continue to be exempted with continued payment of remuneration from the be-ginning of the 14th week of pregnancy. However, the employee may be assigned to another job in the company if safety is assured. Fully-immunized pregnant employees are exempt from this special regulation as of 1 July 2021.

Suspension of time limits

The COVID-19 pandemic resulted in many terminations and dismissals of employment. Employees can challenge a termination or dismissal in court by filing a lawsuit. The time limit for filing such a lawsuit in Austria is short, generally two weeks. As employees were confronted with other problems during the crisis than having to observe court deadlines and could therefore miss them, the government decided to enact a time limit suspension for termination and dismissal challenges.

By the provisions in the Labor Constitution Act and the second COVID-19 Act, time limit inhibitions in the period from 16 March 2020 to 30 April 2020 have been decided. These provisions are continuation suspensions. In this case, the running of the deadline is suspended for the duration of the continuation suspension. After the suspension has ceased, the rest of the period continues to run. Despite the suspension of the time limit, the employees still had the option of bringing a lawsuit before the court.

Special care time

For the necessary care of a child under 14 years of age, a relative with a disability or a person in need of long-term care, the government has granted the employee a legal right to special care time. Care is considered necessary when no other suitable person can pro-vide care. Special care time is possible for up to four weeks. Employers have been reimbursed 100% of the cost by the government.

Short-Time Work

The COVID-19 pandemic brought the concept of social distancing to the forefront of every-day life. The reason for this is clear: the restriction of personal contacts in order to counter the spread of COVID-19. In particular, the labour-intensive gastronomy and tourism, which is particularly important for Austria, suffered from bans on going out (“lockdown”) and general business closings.

Against this background, the federal government ordered plant closures on several occasions. However, it was not only companies affected by the plant closures that had to contend with severe losses, but also other industries that suffered from the consequences of the pandemic.

The consequences on the labour market were devastating. In April 2020, unemployment in Austria rose by 76.3% compared to April 2019. The opportunity to introduce short-time work ensured that unemployment did not rise further more which would undoubtedly have been the case if there would have been no such opportunity. Accordingly, short-time work was an important instrument to secure jobs and to maintain operational structures.


Basically employees are entitled to remuneration for the agreed normal working hours if they are prepared to work. This applies regardless of whether the work is actually per-formed or not. The usual reaction of an employer to a lack of work is therefore to terminate the employment relationship and distribute the little work left to the remaining employees.

The introduction of short-time working would not be an alternative without government support because the reduced salaries often do not even reach unemployment benefits. The essence of the concept of short-time work is that the employee receives between 80% and 90% of their last net salary from the employer during short-time work, regardless of the number of hours worked. The government supports the employer by compensating him for the difference between the remuneration for the work actually performed and the payment to the employee (short-time-work allowance). In Austria, the social partners have traditionally played an important role in the introduction of short-time work.

It must be agreed at the company level with the works council. This agreement must be approved by the trade union and the Chamber of Commerce (statutory employer representation). The reality of COVID-19 has, however, forced them to rubber stamp the agreements basically unchecked (as long as they conform to the published model agreement).


The central prerequisite to introduce short-time work is a temporary economic difficulty of the employer through no fault of their own. Therefore, at the beginning of the COVID-19pandemic a simple written declaration by the employer which stated that the company was in economic difficulties because of COVID-19 was practically sufficient to receive short-time-work allowance. Meanwhile companies that introduce short-time work for more than five employees must submit confirmation from a tax advisor, auditor or accountant that they are facing economic difficulties.

The economic difficulties have to result of a shortage of orders, supplies and operating resources and arise from external circumstances which cannot be influenced by the company. However, this does not apply to companies that are directly affected by lockdowns (eg, hospitality industry).

Furthermore, a so-called "social partner agreement" must be concluded between the employer, the works council and the relevant trade union and the relevant trade association of the Chamber of Commerce. Where there is no works council each employee who was put on short-time work has to agree. The social partner agreement must be concluded for a specific period of time – but no longer than six months – and must provide for the (basic) maintenance of the number of employees during short-time work and a one-month retention period as well as a minimum net replacement rate. The social partner agreement must provide that the affected employees receive short-time work benefits amounting to at least 90% of net remuneration for gross remuneration up to EUR1,700, 85% of net remuneration for gross remuneration between EUR1,700 and EUR2,685, and 80% of net remuneration for higher gross remuneration.

Extent of short-time work

The average loss of working time during the short-time working period may not be less than 20% and must not exceed 50% of normal working hours. For companies particularly affected by the COVID-19 pandemic, the average loss of working hours may exceed 70%, for companies which are directly affected by lockdowns even 90%. However, the loss of working time may fall below or exceed the limits in the short term.

Obligation to retain

The number of employees must be maintained during the period in which short-time work is introduced and for a one-month retention period. If the number of employees is not maintained during short-time work, the employer may be obliged to hire new employees so that the number of employees remains constant.

The obligation of the employer to hire new employees does not apply to dismissals that were announced before the start of short-time work, that were announced to the Labor Market Service in the course of a mass dismissal, that were announced by the employee, that were announced during probationary periods or if the continued existence of the company is at risk and an exceptional approval has been granted by the works council or the Labor Market Service. Furthermore, there is no obligation to hire new employees if fixed-term employment contracts expire during short-time work, in case of justified dismissals or unjustified resignations as well as terminations by mutual agreement if the employee has been advised by the works council about the consequences of the termination in advance.

In contrast, terminations due to personal reasons, unjustified dismissals or justified resignations as well as terminations by mutual agreement without prior consultation of the works council trigger the obligation of the employer to hire new employees.

Whether there is individual protection against dismissal for employees if an employer violates the obligation to retain employees so that employees can challenge dismissals issued during the short-time working or retention period in court is disputed. There is no case law on the subject yet. However, individual protection against dismissal may be concluded in the social partner agreement.

By violating the obligation to hire new employees, the employer risks losing all or part of the short-time-work allowance, which may lead to an obligation to repay the allowance.

Home Office

Definition of the home office and home office work

The statuary definition of home office is work regularly performed at home. The term "home" also includes an apartment at a secondary residence or the apartment of a close relative or life partner.

The definition therefore excludes remote or mobile work performed away from a home, such as in a co-working space or in another public place (coffee house, park, etc). The distinction is relevant, among other things, in connection with social insurance coverage, agreement and termination regulations, work equipment and tax treatment.

Only full days may qualify as home office days. Working days on which the employee is partly on a business trip or travels to the employer's office are not to be considered as home office days within the meaning of the legal definition.

Agreement and termination of home office

The possibility of home office is based on voluntariness. Neither can home office be ordered unilaterally by the employer, nor does the employee have a legal claim to perform work at home.

Home office work and its conditions must be agreed upon in writing between the employer and the employee. The agreement may be revoked by either party for good cause upon one month's notice ("legal termination option“). Important reasons for the employee to withdraw from the home office agreement are, for example, a change of residence or a change in the family situation. An important reason that entitles the employer to withdraw from the home office agreement are, for example, essential operational requirements. Further termination options can be agreed ("contractual termination option"). The home office agreement can be concluded for an undefined or limited term.

Provision of digital work equipment

If home office work is agreed, the employer must provide the employees with the digital work equipment required for regular work in the home office. This includes both IT hard-ware (eg, computer/laptop, cell phone) and the required data connection (internet). By way of derogation from this, the use of employees’ own digital work equipment may also be agreed in individual contracts or as part of a company agreement, if the employer bears the reasonable and necessary costs for the digital work equipment provided by the employee for the performance of the work.

The actual amount is to be determined in the individual case. The costs may also be compensated on a lump sum basis. Employers may also assume other costs incurred (electricity, heating, work furniture, office supplies); however, there is no legal obligation to do so. These costs can also be reimbursed in the form of a lump sum.

Compliance with the provisions on working hours and rest periods

The same provisions on working hours and rest periods apply in the home office as in the office.  Unless agreed otherwise in the home office agreement, the previous individual work schedule shall also apply in the home office.

The employer is obliged to record the working time; however, the employer may delegate this obligation to keep records of working hours to the employees. In the case that employees carry out their work in a home office, records of the duration of the daily working time (daily balance) are sufficient, if this has been agreed with the employer.

Home office and social accident insurance

Employees are also insured in the home office in the event of accidents in connection with their professional activities. This also applies to commuting accidents like for example dropping off or picking up children from the kindergarten or picking up lunch at the supermarket on a home office day.

However, this social accident insurance does not apply outside the employee's own home, accidents that occur while performing home office work from a secondary residence or the home of a close relative or life partner are not covered by the social insurance.

Employee protection in the home office

All provisions of the Austrian Employee Protection Act also apply in the home office. The employer is obliged to ensure that the workplace at home is ergonomically designed or that questions of safety and health protection are answered and clarified. Employers must ensure that hazards are identified and assessed and that measures are defined. Home office workplaces must be organisationally assigned to the workplace and included in the work-place evaluation.

Since an inspection of the private home does not take place due to the protection of privacy (the employer and the labour inspectorate may only enter private homes of the employee in the home office with their consent), the information of employees about the employee protection regulations is of particular importance. Employers are therefore required to instruct employees on the requirements of workplace design prior to the commencement of home office work.

Liability for damage in the home office

For damage to the employer's work equipment in the home office caused by the employee or members of their household, the employee is liable to the employer under the provisions of the Austrian Employee Liability Act. This provides liability privileges for the employee. This means that the extent of compensation for damage to the employer's work equipment can be reduced or waived altogether. The lesser the fault of the employee or the employee's household members, the lesser the compensation that must be paid. In the case of minor errors, the obligation to pay damages may also be waived altogether.

Data protection and home office

The employer must take appropriate measures to ensure the protection of data used and processed by the employee for professional purposes. The employer shall inform the employee of the obligation to comply with the data protection regulations.

Tax and social insurance contributions benefits

Required digital work equipment (computer, monitor, keyboard, printer, cell phone, required data connection) provided by the employer shall not be considered as benefits in kind and therefore not be subject to income tax or social security contributions. In cases where none or not all of the digital work equipment used is provided by the employer, there is the option of a home office flat rate. The home office flat rate amounts to up to EUR3.00 per home office day and can be paid out by the employer for a maximum of 100 days per calendar year.

If employers pay less than EUR3.00 per day, employees can claim the difference between the lump sum received and the maximum amount of EUR3.00 for each home office day actually worked within the maximum limit of 100 days as lump sum income-related expenses. If the home office lump sum paid out by the employer exceeds the amount of EUR300.00 per calendar year in total, the exceeding part may be taxable and/or subject to social security contributions.

Fellner Wratzfeld & Partners

Schottenring 12
1010 Vienna

+43 1 537 70 340

office@fwp.at www.fwp.at
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Law and Practice


Graf Isola Rechtsanwälte GmbH was founded in 1994 and is a leading independent Austrian commercial law firm with offices in Vienna and Graz. As a full-service firm, Graf Isola advises in all fields of Austrian and European business law, with a broad domestic and foreign client base from all sectors of industry. The firm's key areas are international arbitration, insolvency, corporate and banking, and real estate law. Quality and the highest-level legal standards take top priority in the firm's consulting work. Graf Isola is comprised of 25 qualified lawyers, including six partners; most are recognised experts in their field and have years of international experience. The firm is internationally known for its hard-work approach and efficient and creative way of handling complex cases in a solution-oriented manner. The firm co-operates with international leading law firms across the globe on a best-friends basis without exclusivity.

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Fellner Wratzfeld & Partners has a team of more than 120 highly qualified legal personnel and is one of Austria’s leading business law firms based in Vienna. Its major fields of specialisation include banking and finance, corporate/M&A, employment, real estate, infrastructure and procurement law, changes of legal form, reorganisation and restructuring. Fellner Wratzfeld & Partners mainly represents Austrian and international private companies but also has clients from the public sector. The firm advises renowned credit institutions and financial services providers on financing projects. Its expertise has proven its worth repeatedly, but also in regard to financing company reorganisations. The firm draws upon substantial experience gained in the financing of complex consortia in the last few years and has been, and still is, involved in the largest banking and finance cases in Austria.

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