Austria: New Laws On Hiring-Out Of Labour

Based on directive 2008/104/EC, Austria's hiring-out of labour laws have been amended (BGBl 98/2012). According to the directive, the implementation into national law should already have taken place by 5 December 2011. After a first failed attempt in February 2012 to implement the directive effective 1 July 2012, the implementation has now taken place belatedly, effective 1 January 2013. Furthermore, the new laws on the hiring-out of labour not only implemented the directive, but also stipulated further regulations for temporary work. This text provides an overview of the most important amendments in the new laws.

Equal treatment

Leased employees (überlassene Arbeitskräfte) now enjoy the same protection against discrimination as the permanent employees of the user enterprise (Beschäftiger). The equal treatment and the equal status of leased employees are explicitly regulated within the Austrian Hiring-Out of Labour Act (Arbeitskräfteüberlassungsgesetz). This approach shall prevent equal treatment laws (eg Equal Treatment Act (Gleichbehandlungsgesetz), etc.) from being bypassed by taking advantage of the triangular relationship: leased employee – user enterprise – temporary placement agency (Überlasser). Thus, it is possible for leased employees to claim entitlements based on equal treatment laws directly from the user enterprise. Furthermore, leased employees must have access to the amenities and collective facilities in the user enterprise (e.g. canteen, childcare facilities, transport services, etc.). A comprehensive equality of leased employees vis-a-vis permanent employees also applies with regard to remuneration.

Additionally, as of 2014, leased employees are entitled to company pensions after more than four years of assignment to the same user enterprise, if a pension fund agreement (Pensionskassenvereinbarung) or a corporate group life insurance (betriebliche Kollektivlebensversicherung) exists in the user enterprise. After the assignment in the user enterprise, the leased employee will be entitled to a fictitious vested amount (fiktiver Unverfallbarkeitsbetrag), calculated on the same basis as the vested amount of permanent employees in the user enterprise. However, such a statutory entitlement does not exist if direct company pension commitments (direkte Leistungszusagen) are provided by the user enterprise to permanent employees.

Cross-border leased employees are equated with permanent employees, independent of any applicable foreign law, with regard to holidays, remuneration, working time, continued payment, rules on termination and termination compensation, if Austrian law is more favourable to the leased employees than the foreign law.

Notification obligation

An assignment is only allowed if an agreement that includes at least 13 provisions explicitly listed in the law is concluded between the temporary placement agency and the leased employee. Before the commencement of an assignment, the temporary placement agency is obliged to inform the leased employee about several circumstances at the user enterprise (e.g., name of the user enterprise, working time in the user enterprise, the statutorily applicable collective bargaining agreement in the user enterprise, assumed duration of the assignment, etc). If the assignment lasted at least three months, the temporary placement agency generally is obliged to inform the leased employee of the end of the assignment at least 14 days in advance.

Reporting obligation

Once a year, the temporary placement agency will be obliged to electronically transmit several selected data about the current assignments of the past 12 months (1 July until 30 June) by the end of July to a service provider designated by the Federal Minister of Labour, Social Affairs and Consumer Protection. If the data is not transmitted within two months after the transmission is due, the failed transmission will be punished with a fine of up to EUR 2,000. However, this amendment will only become effective as of 1 January 2014.

Social- and training fund

In order to support unassigned or unemployed leased employees, a social- and training fund (Sozial- und Weiterbildungsfonds) has been established. Temporary placement agencies that hold a business license for the assignment of leased employees must pay a monthly levy for every assigned leased employee into this fund. For each assigned leased employee, the levy amounts to 0.25% in 2013, 0.35% in 2014, 0.6% in 2015 and 0.8% from 2016 onwards of the contribution basis (Beitragsgrundlage) according to the Austrian General Insurance Act (Allgemeines Sozialversicherungsgesetz). Until 31 December 2016, this levy only has to be paid for leased blue-collar employees; after this date, it will be applicable for both leased blue- and white-collar employees.

Increase of administrative fines

The administrative fines within the Hiring-Out of Labour Act have been increased by 40% compared to the previously existing regulations, with fines– depending on the infringement – of up to EUR 10,000 (in case of recurrence). Furthermore, the administrative fines for a cross-border assignment of leased employees have been adjusted in accordance with the administrative fines for cross-border postings.

Employee protection

The information obligation according to the Austrian Employee Protection Act (Arbeitnehmerschutzgesetz) between the temporary placement agency and the user enterprise on the one hand and the temporary placement agency and the leased employee on the other has to be fulfilled verifiably and in writing. An infringement of this obligation may lead to administrative fines between EUR 166 and EUR 8,324 and in case of recurrence between EUR 333 and EUR 16,659.

To sum up, the amendment of Austria's hiring-out of labour laws provide, inter alia, for an increase of administrative fines and new and further information and reporting obligations for the temporary placement agency and the user enterprise. Moreover, a new levy into a social- and training fund for leased employees was implemented to support unassigned or unemployed leased employees. Based on directive 2008/104/EC, the equal treatment of leased employees is now regulated by law. As of 2014, leased employees are even entitled to company pension commitments in the user enterprise under certain conditions and after a certain time.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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