Employment Law in Austria

Austria is a federal republic made up of nine provinces (Länder). Employment legislation is primarily a federal matter.

In some areas of law, legislation is consolidated into a single code, and one of these, the General Civil Code (Allgemeines bürgerliches Gesetzbuch, ABGB) is relevant to employment, governing matters such as employment contracts and sick leave. However, employment legislation itself is not codified in this way but takes the form of numerous individual statutes (often influenced by EU law). The case law of the specialist labour and social courts and the Supreme Court plays a role in interpreting employment legislation.

Pay and conditions for a large majority of employees in Austria are set by industry-level collective agreements. Other important sources of law are “works agreements” signed at establishment level by employers and works councils, and individual employment contracts. The provisions of collective agreements take precedence over the provisions of works agreements and employment contracts, unless the latter are more favourable for the employee or concern matters that are not regulated in the collective agreement.

In a number of areas, employment law has historically distinguished between white-collar and blue-collar employees. Certain aspects of the employment relationships of white-collar or salaried employees (Angestellten) are governed by specific legislation, the White-Collar Employees Act (Angestelltengesetz). White-collar employees are defined as those who perform “commercial” work, office work or non-commercial “higher-level” work requiring special training and skills — these might include staff in clerical, administrative, sales, financial, payroll, supervisory and receptionist roles. For blue-collar or manual employees (Arbeiter), certain issues are regulated instead by the Trade Ordinance (Gewerbeordnung, GewO), which covers “auxiliary” or “unskilled” employees employed in commercial enterprises, defined as including factory workers, “assistants” (in shops, catering, etc), apprentices and other employees who perform subordinate unskilled work — specifically excluded are employees who perform “higher-level” work and whose pay is generally set on a monthly or annual basis, such as supervisors, mechanics, book-keepers, cashiers, draughts people and chemists.

The differences in treatment between the two groups have narrowed over time and one of the main distinctions, relating to dismissal notice periods, was harmonised in October 2021. The remaining differences apply mainly to certain areas of termination of employment and aspects of the employment contract.

This article refers to employment law in the private sector only.

• There are few specific statutory restrictions on employers’ recruitment and selection methods and practices. Recruitment and Selection

• The maximum permissible probationary period is one month. Recruitment and Selection

• With the exception of citizens of other EEA countries, foreign nationals generally require official authorisation to work in Austria, and employers are responsible for verifying that their employees have such authorisation. Recruitment and Selection

• An employment contract is defined as a contract whereby one party (the employee) agrees to provide their services to another party (the employer) for a certain period of time. Employment Contracts

• An employee may be recruited on an initial fixed-term contract without any particular justification but if the contract is renewed or repeated, this requires the employer to demonstrate objectively justified reasons. Employment Contracts

• Unless there is a written contract covering all relevant matters, the employer must provide the employee with a written statement of their main rights and obligations under the employment contract. Employment Contracts

• Minimum wages are set primarily by industry-level collective agreements, which cover almost the entire workforce, and there is no national statutory minimum wage. Pay and Benefits

• In general, normal daily working time must not exceed eight hours and normal weekly working time must not exceed 40 hours, though legislation permits hours-averaging schemes and various other flexible distributions of working time. Overtime is permitted, within certain limits, where the employer has a higher than normal demand for labour. Working Time, Rest and Holidays

• Employees must be granted minimum rest breaks and daily and weekly rest periods (usually including Sundays), and are entitled to at least five weeks of paid annual leave. Working Time, Rest and Holidays

• Pregnant employees must take 16 weeks of maternity leave, and working parents are entitled to take paternity leave (one month) and parental leave (22 months per child). Employees can also take other types of leave and time off to provide care and deal with personal matters. Parenthood and Work-life Balance

• Employees on sick leave are entitled to receive full pay from their employer for four to 12 weeks (depending on length of service) and then half-pay for four weeks. Parenthood and Work-life Balance

• Discrimination in relation to employment is prohibited on grounds of sex, ethnicity (including race, skin colour and nationality), religion or belief, sexual orientation, age and disability. Equality and Discrimination

• Sexual harassment, harassment on grounds of sex and harassment on the grounds of other protected characteristics are all unlawful forms of discrimination. Equality and Discrimination

• The great majority of employees have their pay and conditions set by industry-level collective agreements. Industrial Relations and Collective Rights

• In all establishments with five or more employees, the employees are entitled to set up a works council with a wide range of information, consultation and participation rights. Industrial Relations and Collective Rights

• An employer and a works council may enter into works agreements to regulate certain matters at establishment level, and in some cases if they cannot reach an agreement, either party can refer the matter to an arbitration board for binding adjudication. Industrial Relations and Collective Rights

• Employers have a general duty to ensure employees’ safety and health in every aspect related to their work, and have numerous detailed obligations in this field, while employees also have various duties. Occupational Health and Safety

• An employer may dismiss an employee without notice for “important reasons”. It may in principle dismiss an employee with notice without requiring or giving a reason, but in establishments with a works council the employer must inform and, on request, consult the works council about all dismissals, and the latter (or in some cases the employee) may challenge a dismissal in court on grounds that it is for an unlawful reason or “socially unjustified”. Termination of Employment

• Statutory notice periods apply to termination by the employer or employee. Termination of Employment

• When employment terminates, the employee may often be entitled to a form of statutory severance payment. Termination of Employment

• An employer may impose disciplinary sanctions short of dismissal only if the sanction is provided for by an applicable collective agreement or works agreement. In establishments with a works council, the employer must obtain the works council’s agreement before introducing a disciplinary policy or disciplining an employee. Other Key Issues