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Austria – Employment law review 2017

Written by
Schima Mayer Starlinger, a modern, service-oriented law firm in Austria.
This article gives an overview of important recent changes in Austrian employment law. The majority of the recently passed legislative amendments discussed are effective from 1 January 2018.

Amendments to the Collective Bargaining Agreement for white-collar employees in the trade sector

As of 1 December 2017 a new Collective Bargaining Agreement is in force for white-collar employees in the trade sector. The agreement provides for a new classification scheme for white-collar employees that must be implemented in every business in the trade sector by 1 December 2021 at the latest – and this may lead to a higher basic salary for some employees.

As of 1 December 2017, businesses in the trade sector are entitled to switch to the new classification scheme for white-collar employees, starting with the first day of any month. Implementation of this new classification scheme may lead to a higher basic monthly salary for employees. The new basic salary must at least equal the basic salary under the old classification scheme. In the event that an employee’s new basic salary is lower than their old basic salary, the employer must pay the difference (´Reformbetra´).

For businesses that change to the new classification scheme by 1 December 2019, special provisions apply for a so-called ‘smooth transition’, provided that the difference between the new basic salary (according to the new classification scheme) and the old basic salary exceeds EUR 65.

Harmonisation of conditions for white-Collar and blue-Collar employees

Paid sick leave

Currently under Austrian law white-collar employees are entitled to up to six weeks’ statutory sick leave paid by the employer (in the event of an accident at work or a vocational disease, the period of continuous pay is up to eight weeks). This is extended from five years of employment. From 1 July 2018, the period of statutory sick leave paid by the employer is extended from six to eight weeks if the employment relationship has already lasted for one year (rather than five years of service as previously). This also applies to blue-collar workers.

In principle, white-collar employees retain their right to full continued pay for the above-mentioned periods. After these periods, white-collar employees are entitled to up to four weeks on half pay, paid by the employer (the full and the half pay periods together are referred to as ‘contingent 1’). If the white-collar employee is unable to work due to illness or accident within a period of six months after his or her return to work following an earlier illness, the wage payment until 1 July 2018 is continued for however much of the contingent 1 period has not been exhausted during the previous illness. Employees are additionally entitled to payment for the same periods as in contingent 1 at half that amount – i.e. 50% and 25% of the salary (‘contingent 2’).

As of 1 July 2018 white-collar employees will no longer be entitled to half of the amount of paid sick leave as mentioned above (‘contingent 2’). White-collar employees’ entitlement to the full amount of paid sick leave restarts at the beginning of the next year of service (‘contingent 1’).

According to the recent legislative changes, white-collar employees are entitled to statutory paid sick leave independent from other periods of absence from work for any incident of an accident at work or vocational disease (‘new contingent 2’).

As part of the harmonisation of the regime for white-collar and blue-collar workers, apprentices’ entitlement to statutory sick leave paid by the employer will be doubled from four weeks continued sick leave payment (and a further four weeks on half pay) to eight weeks sick leave payment and four weeks on half pay. The amendments concerning sick leave are applicable to apprentices´ absences from work as of 1 July 2018.

Notice Periods

Until 31 December 2017, the provisions in the White-Collar Employees Act concerning termination dates and periods were restricted to employment relationships where the employee’s agreed or actually performed working time per month was at least one fifth of 4.3 times the normal weekly work time. These restrictions ceased on 1 January 2018.

Amendments to Data Protection Provisions

These amendments are a result of the General Data Protection Regulation (GDPR). The provisions of the GDPR will become directly applicable in all Member States on 25 May 2018. This means the GDPR will apply in Austria as of that date. However, based on the opening clauses in the GDPR that allow EU Member States national adjustments to the GDPR, some amendments to existing Austrian law are required. The amendments are implemented by the new Data Protection – Harmonisation Act (the ‘Data Protection Act’), which enters into force on 25 May 2018.

Pursuant to the GDPR, the new Data Protection Act stipulates that adolescents will not be able to register to use Internet social media services (e.g. Facebook, Instagram) until their 14th birthday. Adolescents younger than 14 will need the approval of their legal guardians, according to the GDPR.

Currently the data controller (from 25 May 2018: ´responsible person´) has to register future use of data to the data processing register (´Datenverarbeitungsregister´) providing that no exemption applies. Exemptions apply, for example, for permissibly published data and the use of data in standard accounting or human resources applications. Under the new Data Protection Act, the reporting obligation is abolished from 25 May 2018. From this date, the responsible person is obliged to keep an internal list of all data processing activities, including information about data transfer to third countries. However, if there is no critical situation from a data protection view (e.g. data processing of a criminal conviction), entities with less than 250 employees are not obliged to keep such a list.

Where data processing involves a heightened data protection risk (the processing of sensitive data relating for example to religion or video surveillance) a ´privacy impact assessment´ has to be conducted, examining the possible consequences on individuals affected.

Please note that currently administrative penalties for breaches of provisions of the Austrian Data Protection Act are capped at EUR 25,000. Under the GDPR, penalties of up to 4% of global company sales can be imposed. For managers, the Data Protection Act provides for administrative penalties of up to EUR 20 million.

Increased gender balance at board level for listed companies

Until the end of 2017, the law stipulated that the composition of Supervisory Boards must (inter alia) be professionally balanced and take into account representation of both sexes. Since 1 January 2018 this requirement has been strengthened by specific quotas of women and men on Supervisory Boards that must be respected, according to the criteria set out below;

In companies listed on the stock exchange as well as in companies (limited liability companies as well as stock companies, cooperatives and Societas Europaea) in which more than 1,000 employees are permanently employed but which are not listed on the stock exchange, the Supervisory Board has to consist of at least 30% men and at least 30% women. This quota only applies if the Supervisory Board includes at least six capital representatives and the workforce of the relevant company comprises at least 20% women or 20% men. This means that companies with an overwhelmingly single gender workforce are exempt from the requirement.

Any election to the Supervisory Board by a general meeting or posting of works council members to the Supervisory Board that violates this provision is void.

Share transfers to employees facilitated by new Employee Participation Foundation

The amendments implement a new form of operational private foundation, the ´Employee Participation Foundation´ (´Mitarbeiterbeteiligungsstiftung´), facilitating the transfer of shares in a company to their employees. Until 31 December 2017, the Workforce Participation Foundation (´Belegschaftsbeteiligungsstiftung´) only entitled employees to the transfer of investment income as a result of participation in the employer’s, or in an affiliated, business.

Employee representatives and companies employing employees may serve as founders of the Employee Participation Foundation. During the employees’ period of service of the employees, their shares are managed in trust by the Employee Participation Foundation. The employees receive dividends that are treated as investment income.

The shares are granted to employees free of tax and social security from both the company employing them and the Employee Participation Foundation (if certain requirements are met). Employees, former employees and their partners or their children may be beneficiaries of the new amendments.

Amendments to the Working Time Act for Pharmacists

The amendments to the Working Time Act provide for a restriction of additional work to a maximum of 25 hours (prior to this amendment, employees in public pharmacies could work up to 32 hours).

The scope for the relevant collective bargaining agreement (CBA) to allow additional hours is restricted to 32 hours on weekends, down from 48 hours as of 1 January 2018 (provided that the working time regularly comprises a significant proportion of standby time).

From 1 January 2018 the CBA may allow an average weekly working time of up to 48 hours averaged over a period of 17 weeks. An average weekly working time of up to 60 hours in a 17-week period is only permitted in pharmacies with at least 60 on-call duties per calendar year according to pharmacy law provisions and with the written approval of the employee concerned. The CBA can also allow a weekly working time of up to 72 hours for several weeks during the 17-week period, but for a maximum of four consecutive weeks. Further, the CBA is entitled to extend the reference period from 17 weeks up to 26 weeks (formerly 13 weeks).

The amendments to the Working Time Act stipulate that the rest period immediately following additional work must be extended by a period calculated based on the difference between the extra time worked and 13 hours. For example, if the employee does 20 hours’ additional work, the rest period of 11 hours must be extended by seven hours (i.e. 20 minus 13). The minimum duration of the rest period following additional work is 11 hours. Until 31 December 2017 the rest period had to be extended within a period of 13 calendar weeks following the additional work.