Austria: Government plans employment law reforms
Austria's new social democrat-conservative "grand coalition" government has set out its employment and social policy programme. The plans, which have been significantly influenced by the social partners' demands, include: labour law codification and harmonisation; an updated legal definition of "employee"; new rules on overtime; longer shop-opening hours; action to promote the employment of older people and people with disabilities; work-life balance measures; and training reforms.
On this page:
Labour law
Definition of employee
"Free service
contracts"
Working time
More flexible overtime arrangements
Better pay arrangements for part-timers working longer hours
Tougher punishments for contraventions of working time
Regulations
Opening hours
Training leave
Women
Older workers
"Dual system" of vocational training
Disabled people
Illegal working
First steps
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Following the general elections in October 2006 and the ensuing coalition negotiations, a new government was sworn in on 11 January 2007. The new federal chancellor is the leader of the Social Democratic party (SPÖ), Alfred Gusenbauer, who presides over a "grand" coalition with the conservative Austrian People's party (ÖVP).
The coalition's social programme includes many of the proposals presented to the coalition negotiators in December 2006 by the social partners. They have strong links with the following political parties: the Austrian trade union federation (Österreichischer Gewerkschaftsbund, ÖGB) and the federal labour chamber (Arbeiterkammer, AK) with the SPÖ; and the employers' organisations - the federal economic and agriculture chambers (Wirtschaftskammer and Landwirtschaftskammer) - with the ÖVP.
After 13 years of grand coalition government came to an end in 2000, Austria had two centre-right administrations under Chancellor Wolfgang Schüssel (ÖVP). The previous period of grand coalitions ended in 1966, having dominated the post-war years.
The government's programme includes two key commitments in the field of labour law. The first is to codify the fragmented sources of labour law, by creating a single body of law (known as the Arbeitsvertragsbuch).
The second is to work towards abolishing the differences in employment conditions between white- and blue-collar workers. The latter group is subject to less favourable arrangements on some matters, such as notice periods and sickness pay. Further, the law applying to blue-collar workers is contained in many separate pieces of legislation, some of which date back to rules developed during the 19th century. White-collar workers already have their own dedicated body of law (Angestelltengesetz).
The ÖGB has mixed reactions to the government's plans to harmonise the law for white- and blue-collar workers. While it has been demanding the abolition of the disadvantageous conditions applying to blue-collar workers for years, it is also concerned that creating a single body of employment law could potentially weaken the internal organisational structures of the ÖGB and employee representative organisations. The trade union representing white-collar employees in the private sector (Gewerkschaft der Privatangestellten, GPA) is its largest affiliated union and at workplace level there are often separate white-collar and blue-collar works councils.
The government programme states that the definition of "employee" needs to be updated - an area on which the social partners do not agree and which was not included in their proposals.
The trade unions are keen to see the current definition of employee extended to cover new forms of "pseudo-self-employment". In particular, they are concerned about "economically dependent self-employed workers" - those who are formally self-employed but do not employ other people and often work only for a single client, under conditions that are very close to employee status. Employers' representatives have consistently opposed any such extension.
"Free service contract" workers ("freie" Dienstnehmer) provide an ongoing service, but do not fulfill the criteria set out by the labour courts to qualify as employees. Formally, they are not subject to the instructions of the client and are free to schedule their own working time.
These workers are only partly integrated into the social security insurance schemes. They are not covered by an unemployment insurance scheme, and although they are covered by sickness insurance, this extends only to medical treatment and not sick pay. Further, the new severance pay arrangements, under which employers are obliged to pay 1.53% of each employee's wages into a special fund, do not apply to free service contract workers. The government plans to remove these inequalities.
The trade unions are demanding that these workers be covered by an extended definition of employee, so that they are placed on the same footing as employees in standard employment, in terms of labour law and social security.
More flexible working time arrangements were introduced in 1997, when new rules allowed collective agreements at sector level to calculate average working time over longer reference periods.
Employers' organisations have, however, consistently expressed the opinion that these changes were not sufficiently wide-ranging, demanding instead that reference periods could be extended by company-level agreement without the need for a sectoral agreement. This development has been opposed by employees' representatives, because they do not believe that bargaining power at company level (unlike at sector level) is always sufficiently balanced to allow the negotiation of fair agreements on working time flexibility. In the event, the government's programme adopts all the legislative proposals contained in the social partners' joint paper. It has not agreed to the employers' request to devolve the responsibility for calculating "standard" working time to company level.
More flexible overtime arrangements
The government has integrated the following employers' demands for more flexibility with regard to overtime into its programme:
Better pay arrangements for part-timers working longer hours
In line with the unions' demands, the government has agreed that part-time workers whose employers require them to work longer than specified in their contracts will be entitled to a higher pay rate for these hours. The government's programme does not indicate what form such a legislation will take.
Tougher punishments for contraventions of working time Regulations
In accordance with union requests, the government has promised to introduce stricter measures to prevent infraction of working time Regulations. Employers that exceed legal working time limits will be subject to tougher sanctions.
The government's programme provides for shop-opening hours to rise to a maximum of 72 hours a week, from the present limit of 66 hours. Shops will be able to open from 6am to 9pm on Mondays to Fridays, and to 6pm on Saturdays. There is no plan to allow Sunday opening in the foreseeable future.
These points were contained in the social partners' demands. However, the government did not agree to their demand that public authorities at regional level should be able to maintain the present limit of 66 hours, while drawing up a set of measures to ensure the provision of local shopping facilities.
Since 1998, after three years' service, employees have been able to make their own arrangements for training leave with their employers, within the framework of their existing employment contract. The national employment service pays them €14.50 a day (employees over the age of 45 are entitled to a higher payment). Additionally, workers taking training leave are allowed to remain in the state sickness, accident and retirement insurance schemes without having to pay contributions for between three and 12 months. However, only around 1,350 employees took advantage of the opportunity in 2005.
In accordance with the social partners' requests, the government is seeking to make training leave more attractive. Employees will need to have only one year's service, and the payment will be raised to the level of unemployment benefit - providing it is higher than €14.50 a day. Finally, the government is considering making training leave more flexible. One proposal is to permit it to be taken in more blocks of time.
The government programme includes several measures aimed at women, ranging from improving their work-life balance and closing the gender pay gap to preventing the trafficking of women.
Among other measures, the government has given its commitment to:
It has also promised to make parental benefit more flexible. At present, parents can claim it until the end of the 36th month after the birth of their baby. However, contrary to the social partners' demands, the government's programme provides only a single alternative to the present arrangements, rather than a range of options.
One of the aims of the government's programme is to implement a national action plan to raise the labour market participation and employability of older people. This will include improved advisory networks, a mentoring system and better integration opportunities for older workers whose health is frail.
The government also intends to reform partial retirement arrangements (Altersteilzeit), which allow older workers to work part time and receive a partial pension. Partial retirement has been available in Austria since the beginning of 2000 and initially proved a very attractive option for employers and employees. However, it was also proving expensive so restrictions were imposed in 2003 and since then the take-up has fallen dramatically. The government plans to make partial retirement attractive again and, as suggested by the social partners, has instructed them to submit their proposals on the topic by the middle of 2007.
"Dual system" of vocational training
The government wants to boost the "dual system" of vocational training that combines apprenticeships in a company with education at a vocational school. It also wants to improve the interchangeability between apprentice training systems and the school and university educational programmes. It aims to guarantee a training opportunity for all young people up to the age of 18.
Another integral part of the plans for vocational training - regarded as ambitious by many commentators - is that termination of apprenticeships will be possible at the end of the first and the second years. This is designed to introduce more flexibility so that increasing numbers of employers will be prepared to participate in the scheme. Apprentices who are to be dismissed should be offered mediation and, if this fails, those who are to lose their jobs should be offered an alternative training opportunity.
The programme contains a number of measures designed to increase the participation of disabled people in the labour market. These include a long-standing demand by the unions to increase the supplement payable by employers that do not fulfil their obligations regarding employing a minimum number of disabled workers.
Reducing activity in the "informal" economy should raise tax revenues and social security contributions, according to the government. Its programme contains several measures that the unions have been demanding for years, but that had always been rejected by employers' organisations.
One measure that will have a significant impact is to make contractors responsible for unpaid social insurance contributions of their subcontractors' employees. Another is that employers will have to register their workers for social insurance before they start work. This is designed to prevent employers that are caught employing illegal workers claiming that they had only recently started working for them and that they intended to register them "soon".
Additionally, and especially against the background of progressive European integration and the increasing cross-border provision of services, a commitment to monitor more closely the terms and conditions of workers sent to work in Austria from abroad is significant.
The first steps towards implementing the
labour law content of the programme have already been taken. The employment
minister invited social partner representatives to an initial meeting in
February 2007 to discuss a draft revision of the working time law. It was
expected that the talks would continue until mid-April, after which the draft document would be sent for expert legal
opinion. The new Regulations on shop-opening times are progressing even faster;
a draft text was sent for expert opinion at the beginning of
February.
This article was written by Beatrice Harper
, researcher and writer, European Employment Review.
European Employment Review 400 (EER 400) contents
