Labour and Employment Comparative Guide

1 Legal framework

1.1 Are there statutory sources of labour and employment law?

In Austria, there are numerous statutory sources of labour and employment law. The key statutes are:

• the Salaried Employees Act;
• the Labour Constitution Act;
• the Working Time Act and Rest Periods Act;
• the Annual Leave Act;
• the Equal Treatment Act;
• the Civil Code; and
• various special laws.

For many cross-cutting issues (eg, data protection or confidentiality of trade secrets), statutory sources outside of traditional employment laws must also be complied with.

In addition, collective agreements apply in various sectors across Austria. At company level, works council agreements must also be considered as a source of law. Lastly, the requirements of EU law and thus directives and regulations must also be considered as statutory sources.

1.2 Is there a contractual system that operates in parallel, or in addition to, the statutory sources?

These include collective agreements. Generally speaking, a 'collective agreement' is an agreement concluded between employers' and employees' associations that are authorised to conclude collective agreements. On the employer side, it is primarily the trade associations or trade groups of the Economic Chamber that are eligible to conclude collective agreements.

These are subordinate sources of law and restrict individual employment contracts and the clauses included therein. The aim of a collective agreement is to:

• clarify and specify the relevant laws; and
• establish a minimum standard for individual employment relationships.

However, it is generally possible to deviate from the provisions of a collective agreement in the employment contract if the individual contractual provision is more favourable to the employee than the collective agreement.

In this respect, one can thus speak of a parallel contractual system.

1.3 Are employment contracts commonly used at all levels? If so, what types of contracts are used and how are they created? Must they be in writing must they include specific information? Are implied clauses allowed?

An employment contract is the basis of any employment relationship. In practice, contracts are used at all levels of employment, from interns to managing directors. In purely legal terms, an employment contract is concluded when both parties agree on the essential elements of the contract, meaning that there is no specific formal requirement. However, the employee is entitled to written documentation of the rights and obligations applicable to the employment relationship.

National law stipulates minimum content for this written documentation, which includes, among other things:

• general information on the contracting parties as well as the role to which the employee shall be assigned to and a corresponding short job description;
• the start and duration of the employment relationship;
• the place of work;
• the length of the notice period, any date of termination and reference to the termination procedure to be followed;
• remuneration;
• agreed normal weekly working hours and extent of annual leave; and
• the name and address of the social insurance institution and the company pension fund.

Contracts are generally drafted by the employer. Depending on the hierarchical level of the employee to be hired, there is increasing willingness in practice to deviate from internal standard contract templates.

Implied clauses play little to no role in practice. In the interests of employee protection and to redress the power imbalance between employer and employee, contracts tend to be interpreted strictly by the courts. If an employee is unable to (clearly) assess their rights and obligations due to the wording of the contract, clauses may be non-transparent and therefore void.

2 Employment rights and representations

2.1 What, if any, are the rights to parental leave, at either a national or local level?

There are national laws that regulate parental leave nationwide. Parental leave can be taken by women (under the Maternity Protection Act) and men (under the Paternity Leave Act) who are employed and live in the same household as the child. The parental leave regulations also apply mutatis mutandis to adoptive and foster parents. Freelance employees, however, are not entitled to parental leave. The employer cannot refuse parental leave.

In principle, parental leave can only be taken by one parent. However, it is possible for the parents to 'share' the parental leave. In this case, it is possible for the parents to simultaneously be on parental leave for a limited period.

In addition to this 'classic' parental leave, there is also statutory parental part-time leave. This allows parents to switch to part-time employment and/or temporarily change their working hours for a certain period after the birth of a child. The parents are protected against dismissal if certain conditions are met.

2.2 How long does it last and what benefits are given during this time?

Parental leave must be taken for at least two months. If only one parent takes parental leave, it may last up until the child is 22 months old. This is intended to:

• promote the employment of women; and
• support the fair division of care and nursing duties between men and women.

If the parent is a single parent at the time of notification of parental leave, they are generally entitled to parental leave until the child is 24 months old.

For certain entitlements under employment law, it is necessary to have been employed for a certain length. The legal 'benefit' of parental leave is that all parents are for this purpose considered to be 'normally' employed, meaning that they do not suffer negative consequences for being on leave.

During parental leave, there is also increased protection against dismissal. Protection against dismissal for mothers generally begins at the start of their parental leave. Prior to this, there is a statutory employment ban, which is also connected with increased protection against dismissal. This absolute ban on employment applies generally for eight weeks before and after birth.

For fathers, protection against dismissal begins with the announcement that they are taking parental leave. This protection generally ends four weeks after the end of parental leave. Within these four weeks, the notice of dismissal is also legally void.

2.3 Are trade unions recognised and what rights do they have?

Unions are recognised under Austrian law. There are seven trade unions in Austria; the most important coalition on the employee side is the Austrian Trade Union Federation. As the representative of employees, it aims to improve working conditions and income. Trade unions are generally organised as associations under private law with legal personality. They have the right to negotiate and conclude collective agreements with employers' associations.

Trade unions can also call strikes in order to assert the interests of employees. In the event of a strike, trade union members are generally protected from dismissals or other negative consequences, as membership falls under the exercise of the constitutionally guaranteed freedom of association. Trade unions also:

• support their members in enforcing claims against employers; and
• offer legal advice and legal representation (including in court).

2.4 How are data protection rules applied in the workforce and how does this affect employees' privacy rights?

Data protection in the employment relationship is a complex issue that presents employers with a variety of legal and organisational challenges, especially since Austria does not have its own law on employee data protection – unlike, for example, Germany. The processing of employee data – which is necessary in any employment relationship – naturally requires a (legal) basis. Although there is a national data protection law in Austria, the EU General Data Protection Regulation (GDPR) must also be complied with and has an impact in the area of employment law.

Employers and employees are subject to data secrecy. This means that personal data that becomes known in the course of professional practice must be treated confidentially not only during but also after the end of the employment relationship. Employers are further obliged under the GDPR to take appropriate contractual precautions in this regard. If employees violate data confidentiality, this can:

• have serious consequences (up to and including dismissal); and
• result in significant claims for damages.

To summarise, there are various rights and obligations for employers and employees, as well as between the employer and the works council. For example, the employer is obliged to provide the works council with information upon request on all matters that affect the economic, social, health or cultural interests of its employees. In the case of the automated processing of employees' personal data, the employer's obligation exists independently of a request from the works council.

2.5 Are contingent worker arrangements specifically regulated?

By law, these contracts end at the end of the agreed term without the need for a special declaration of termination. This means that the parties to the contract are bound by the fixed term for this duration.

The fixed term generally precludes termination of the employment relationship by the employer or the employee prior to the end of the term stipulated in the contract. However, the parties may include an option for premature termination. Irrespective of this, the right to premature termination of the contract for good cause always exists. It is also possible to terminate the employment relationship by mutual agreement at any time.

However, entering into several consecutive fixed-term employment contracts is problematic. These are generally considered to be inadmissible chain employment contracts. Under certain circumstances, however, they may be permissible if they are:

• objectively justified for special economic or social reasons; and
• proportionate to the fixed term.

3 Employment benefits

3.1 Is there a national minimum wage that must be adhered to?

No, there is no general national minimum wage.

However, there are collective agreements across the various sectors that stipulate a certain minimum salary for employees who are covered by the scope of the collective agreement.

Additionally, for those employees who are not covered by collective agreements, the Austrian Unification Office has the authority to set minimum wage tariffs. However, remuneration may be immoral if performance and consideration are strikingly disproportionate.

3.2 Is there an entitlement to payment for overtime?

For overtime, there is a statutory entitlement to:

• an additional payment of 50% remuneration surcharge per hour; or
• compensation in the form of time off in lieu, whereby the remuneration surcharge (50%) must be taken into account when calculating the time off in lieu or paid out separately.

Collective agreements often stipulate additional remuneration surcharges (eg, for overtime at night or on Sundays and public holidays). If there is no provision for the 'consumption' of overtime in a collective agreement or the individual employment contract, the law provides for compensation in cash. If overtime is not paid out individually on a monthly basis, a flat-rate overtime remuneration or an all-in clause can be agreed, which is common in practice, especially for higher-ranking positions.

3.3 Is there an entitlement to annual leave? If so, what is the minimum that employees are entitled to receive?

The entitlement to annual leave and the amount of annual leave are regulated uniformly by law for blue-collar and white-collar employees. The vacation entitlement is:

• 30 working days of vacation for employees with less than 25 years of employment; and
• 36 working days for those exceeding that threshold.

The entitlement for annual leave is accrued on a pro rata basis according to the time completed in the first six months of the first year of employment, and thereafter in full. Therefore, from the second year of leave, employees receive the full amount of leave at the beginning of the leave year. This entitlement is stipulated by law and cannot be waived or paid off by the employer.

3.4 Is there a requirement to provide sick leave? If so, what is the minimum that employees are entitled to receive?

There is an entitlement to continued payment of remuneration during sick leave. Remuneration includes not only wages and salary, but also regular overtime or bonuses, calculated on average. The duration of the obligatory continued payment of remuneration depends on the length of employment: the longer the employee has been employed, the longer the employer must comply with the entitlement to continued payment of remuneration. In any case, the employer must pay the full salary for a certain amount of time, and thereafter only half. During the period in which only half of the remuneration is paid, the employee also receives sick pay from the statutory health insurance. Once the employee's entitlement period has been fully utilised, the employee only receives sick pay.

3.5 Is there a statutory retirement age? If so, what is it?

There is a statutory minimum age at which one may retire. This standard retirement age is 65. Nevertheless, it is possible to work beyond this age, so there is no legal obligation to retire.

As from 1 January 2024, the retirement age for women is being gradually raised from 60 to 65. For those born between 1964 and 1968, it will increase by half a year every six months. Women born after 1 July 1968 can retire at the age of 65.

4 Discrimination and harassment

4.1 What actions are classified as unlawfully discriminatory?

National law does not refer to specific actions that are discriminatory in themselves, but rather to what an action is connected to or the motive behind it. Accordingly, discrimination in a legal sense occurs if:

• an employer's action is aimed at or based on a certain protected characteristic of a person;
• a protected characteristic is the decisive motive for an employer's action; and
• that person is therefore put at a disadvantage.

Discrimination also occurs when a person is instructed to discriminate against others. The legal objective is therefore to prevent any unequal treatment of employees. Sexual or gender-based harassment also counts as discrimination. However, discrimination does not occur if the unequal treatment of one (group of) persons is objectively justified and not arbitrary.

The law demonstratively lists situations in which equal treatment must be given special consideration. These include:

• when concluding an employment agreement;
• in renumeration negotiations;
• when granting other voluntary social benefits; and
• in relation to career advancement – in particular, regarding promotions.

4.2 Are there specified groups or classifications entitled to protection?

In the context of an employment relationship, no one may be discriminated against directly or indirectly on the basis of

• gender;
• ethnicity;
• religion or belief;
• age; or
• sexual orientation.

Protection against discrimination also extends to persons who are discriminated against because of their close relationship to a person with a protected characteristic (discrimination by association).

4.3 What protections are employed against discrimination in the workforce?

If an employee is harassed in the workforce – for example, by colleagues or third parties – the employer must take appropriate measures immediately to stop the harassment. Possible responses by the employer regarding the harasser include:

• a formal warning;
• temporary leave of absence;
• transfer; or
• as a last resort, dismissal.

If alleged sexual harassment can be proven, the employer is entitled to dismiss the harasser without notice in order to avoid being accused of having acted inappropriately or too hesitantly towards the harassed employee. The harassed employee also has the option of quitting without notice if the employer:

• itself is the harasser; or
• culpably fails to take appropriate remedial action in the event of sexual harassment by third parties.

4.4 How is a discrimination claim processed?

Alleged claims must be enforced in court. Claims for damages due to discrimination must be filed within six months.

Employees who have been subjected to discrimination can contact the Equal Treatment Commission. This commission deals with all issues relating to discrimination and can draw up expert opinions and examine individual cases. The decisions of the Equal Treatment Commission are not binding. The labour courts can independently decide on the question of a violation of the principle of equal treatment, even if the Equal Treatment Commission has already dealt with the matter. From a legal perspective, the commission's findings merely have the status of evidence.

4.5 What remedies are available?

There are various claims that employees can pursue due to unlawful discrimination. These include:

• the restoration of a non-discriminatory situation;
• compensation for (material and non-material) damage incurred; and
• in the event of discriminatory termination of the contract, unlawful termination.

Which remedy is used will ultimately depend on the specific act of discrimination.

Although this is not a remedy for employees, national law also provides for an administrative penalty in the event of a breach of the requirement to ensure that job ads are not discriminatory.

4.6 What protections and remedies are available against harassment, bullying and retaliation/victimisation?

Sexual harassment is a subtype of discrimination based on gender. It is defined as conduct relating to the sexual sphere, which:

• impairs the dignity of a person or is intended to do so;
• is unwanted, inappropriate or offensive to the person concerned; and
• thereby:
• • creates a negative (intimidating, hostile or humiliating) working environment for the person concerned; or
  • has the effect or the purpose of hindering a career.

The legal remedies available are identical to those in cases of discrimination.

The term 'bullying' is not legally defined by law. According to Austrian case law, it refers to conflictual communication in the workplace in which an employee is systematically, frequently and over a longer period of time attacked directly or indirectly by one or more employees. Individual incidents, such as a one-off reaction by a superior to a difference of opinion, are not generally considered bullying.

There are no explicit statutory regulations on bullying claims. However, case law is based on the employer's general duty of care. According to this, the workplace must be designed in such a way that the life, health and legitimate interests of employees are protected. Culpable violations of this duty that lead to damages (eg, in the form of psychological or physical impairment) can result in the employer being liable for such.

5 Dismissals and terminations

5.1 Must a valid reason be given to lawfully terminate an employment contract?

No, in principle, the employer need not give reasons for the dismissal. However, exceptions apply in certain areas, such as the public sector, where justification is required. Additionally, if the termination is challenged in court (eg, due to social unfairness or discrimination), the employer may be required to provide a reason for the dismissal.

5.2 Is a minimum notice period required?

In principle, yes. However, dismissal without notice is always possible if there is good cause.

According to the law, employees can terminate their employment by giving one month's notice, the end of the notice period must coincide with the end of a calendar monthuntil the end of the month. The employer must comply with longer notice periods which increase with the duration of the employment, starting at six weeks. The employer can only terminate contracts so that they end at the end of a quarter. However, the 15th or the last date of the month can also be contractually agreed as an end date.

The notice period can be extended to up to six months by individual agreement. However, the notice period to be complied with by the employer may not be shorter than the employee's notice period.

Collective agreements or agreements with the works council may also provide for other time periods.

5.3 What rights do employees have when arguing unfair dismissal?

A dismissal can be contested by employees in court within two weeks on the grounds of:

• improper motive; or
• social unlawfulness.

The employee must have been employed for at least six months in order to sue for unlawful dismissal of an employment contract on the grounds of social unlawfulness; however, there is no minimum period of employment for a lawsuit on the grounds of improper motive. The aim of the lawsuit is the continuation of the employment relationship and thus a declaration of the dismissal as unlawful.

If there is a works council, it must be informed of any planned dismissals. The works council has the right to give a statement regarding the dismissal. Depending on this (objection, approval, no statement), it varies whether:

• the employee themselves may contest the dismissal; or
• the work council will contest the dismissal.

5.4 What rights, if any, are there to statutory severance pay?

There are two systems for statutory severance pay in Austria.

On the one hand, there is the 'old severance payment', which generally applies to all employees who started their employment before 1 January 2003. The amount of the old severance payment varies depending on the duration of the employment. In any case, it is limited to 12 months' remuneration. The prerequisites for payment include:

• uninterrupted employment for at least three years; and
• termination of employment in a specific manner.

In summary, the employer's obligation to pay an old severance payment ceases if the employee themselves is responsible for the termination of the employment relationship.

For other employment relationships, the statutory 'new severance payment' applies. For these employees, the employer must transfer a regular contribution of 1.53% of the monthly remuneration to the responsible health insurance provider. This obligation arises at the start of the employment, provided that the employment lasts for longer than one month. The entitlement to severance pay generally arises upon termination of the employment, irrespective of the duration and type of (or reason for) termination. However, the employee's entitlement to receive or dispose in another way of the severance payment is generally dependent on the existence of a three-year contribution period.

6 Employment tribunals

6.1 How are employment-related complaints dealt with?

In Austria, disputes between employees and employers are generally handled by the labour and social courts. In the federal states, this function is carried out by the regional courts; while in the capital, Vienna, there is a dedicated court for this purpose. The labour and social courts are responsible for:

• disputes arising from employment relationships, such as those relating to:
• • dismissal;
  • wage claims;
  • discrimination; or
  • unlawful termination; and
• matters related to labour constitution law, such as the dismissal of works council members.

A special feature of labour court proceedings is that at the first hearing, the judge will attempt to reach a settlement – a compromise between the two parties. In the court of first instance, decisions are made by a professional judge and two lay judges – one representing the employer side and one the employee side. At second instance, the panel consists of three professional judges and two lay judges; and at the level of the Supreme Court, decisions are made by either three or seven professional judges and two or four lay judges, respectively.

The procedure generally begins with the filing of a claim at the competent labour and social court. This claim can be filed without a lawyer. Officials and employees of interest groups (eg, unions or chambers) are permitted to represent parties at first and second instance. In many labour court cases, no court fees are charged and there is no obligation to reimburse legal costs.

6.2 What are the procedures and timeframes for employment-related tribunals actions?

Labour court proceedings in Austria are essentially civil proceedings with special regulations under the Labour and Social Courts Act. The procedure is designed to provide employees and employers with fast and cost-efficient legal protection.

A claim (lawsuit) can be filed either in writing or orally (as part of the official court record). There is no obligation to be represented by a lawyer at first instance. It is important to observe the (often short) deadlines for asserting claims, which are stipulated by law or collective agreement. For example, the deadline to challenge a dismissal or termination is generally only two weeks from the date of notification of the termination.

Once the claim has been submitted, it is served on the opposing party, which may submit a written response, although there is no obligation to do so.

In principle, the court must quickly set a date for the first (preparatory) hearing. This preparatory hearing usually lasts between 15 and 30 minutes and aims to reach a settlement and discuss the procedural programme. If the proceedings are closed at the end of the evidentiary proceedings, a judgment will be issued. The duration of the proceedings at first instance depends on factors such as:

• the facts of the case; and
• the numbers of witnesses to be heard.

Proceedings can be concluded within a few months, but also after several years.

An appeal against the judgment may be lodged with the competent higher regional court within four weeks of receiving the judgment. A further appeal against this judgment (revision) to the Supreme Court is possible if it concerns a legal issue of fundamental importance.

7 Trends and predictions

7.1 How would you describe the current employment landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The Austrian labour market continues to be characterised by a persistent shortage of skilled workers, particularly in:

• healthcare;
• technology;
• tourism; and
• skilled trades.

At the same time, there is growing demand for flexible working models such as:

• remote working;
• part-time employment; and
• mobile working.

Digitalisation, automation and the ecological transformation are key ongoing trends. The debate on reduced working hours, such as the four-day working week, is also gaining momentum.

Most recently, on 1 January 2025, the new Telework Act came into force. It expands the previous regulations on working from home to the principle of 'working from anywhere' (so-called 'teleworking'), allowing employers to offer their employees significantly greater flexibility in choosing their place of work. In addition, legal insurance coverage for commuting accidents has been newly regulated in the context of teleworking.

From 1 April 2025, educational leave and educational part-time allowance will be abolished. As a successor model, the 'further training period' will be introduced on 1 January 2026. It is aimed in particular at less qualified employees who wish to improve their prospects in the labour market. New features include:

• stricter requirements;
• mandatory educational guidance; and
• proof of the labour market policy benefits of the chosen further training measure.

Implementation will take place in close coordination with the Public Employment Service.

Overall, the Austrian labour market remains dynamic and characterised by tensions between:

• the shortage of skilled workers;
• the desire for flexibility;
• digital change; and
• the need for social security.

8 Tips and traps

8.1 What are your top tips for navigating the employment regime and what potential sticking points would you highlight?

Although there is often no obligation to conclude a written employment contract, perhaps the most important piece of advice for both employees and employers is that all agreements should be documented in writing and in detail. It is essential to know one's rights and obligations, particularly those arising from any applicable collective agreement. The employment contract should therefore always:

• be in written form; and
• include clearly formulated provisions on the essential working conditions.

As in any other area of law, it is advisable to implement regular reviews regarding changes in legislation or relevant case law. This requires either an in-house legal expert or the outsourcing of this function. Such regular checks should be tailored to the specific needs of the employer. For instance, a company whose employees work in production or handle hazardous substances will need to monitor different regulations at different intervals from a purely office-based business.

This requires a detailed understanding of:

• the company;
• its structure; and
• the associated (legal) risks.

To establish a solid foundation, comprehensive risk analysis is usually beneficial, especially to determine:

• which areas of law, case law and legislative changes are relevant; and
• the most effective method of gathering legal information.

In practice, many employers overlook the fact that violations of labour law regulations may lead to administrative penalties. These usually apply to all members of the management board and can be substantial and cumulative. Therefore, labour law compliance and the implementation of internal control systems are ultimately indispensable.

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.