Incidental to the COVID-19 pandemic, the Austrian social partners developed a new type of short-time work jointly with the Federal Government and the Public Employment Service Austria (AMS). The most recent revision of the "corona short-time work regime" has eased some of the strictures imposed on employers.
Short-time work is a temporary reduction in normal working hours and pay due to temporary economic difficulties. Its object is to avoid unemployment and maintain employment levels as much as possible. Concomitantly, Section 37b (2) of the Public Employment Service Act (AMSG) specifies an agreement required between the social partners – necessary to obtain the allowance for working short hours – to ensure that the employment level will be maintained during shorttime work and beyond (if agreed), unless the regional AMS office grants an exception in special cases. Accordingly, current specimen agreements between the social partners include provisions to maintain the employment level during the short-time work regime and to retain affected workers for a period after their return to normal working hours.
Which employment level?
During short-time work, employers must maintain the total level of employees in the enterprise, in the works or in the department (depending on the agreement made with the social partners) as it applied before the start of the short-time work regime, unless previously agreed changes have been accounted for. After the end of the short-time work regime, only such employees as had been affected by short-time work must be retained for at least one month. The new regulation applicable since 1 June 2020 provides that if the situation deteriorates substantially after conclusion of the agreement between social partners, the retention period may be shortened or even waived entirely, subject to trade union approval. If no trade union approval is forthcoming, it may be replaced by a decision of the regional AMS advisory board.
Termination of employment during corona shorttime work?
The provisions that foresee maintaining employment levels mean restrictions on dismissing employees, and employers may under certain circumstances be obliged to top up their employment figures. As a rule, employers may dismiss employees only after the retention period has expired.
Since 1 June 2020, there has been clarity as to which terminations during short-time work do not trigger an obligation to top up employment during the retention period: (i) employment relationships terminated prior to the start of short-time work; (ii) expiry of a limited employment relationship that had begun before the start of the short-time work; (iii) notice given by the employee; (iv) justified firing and unjustified leaving; (v) termination by mutual consent provided that the employee has been advised of the consequences by the workers' council or the trade union or the Chamber of Labour; (vi) termination due to the employee's demise; (vii) termination due to the employee's entitlement to a pension (regardless of the type of termination); and (viii) termination during a trial period. Furthermore, it should be noted that (ix) dismissals by the employer with a view to reducing the employment level do not trigger an obligation to top up employment if the survival of the enterprise or works is seriously endangered, always on condition that the works council (or the trade union, in operations without a works council) consents within seven days or an exception has been granted by the regional AMS advisory board in cases where the works council or trade union do not give their consent.
Notice given by the employer on personal grounds, unjustified firing or justified early resignation and termination by mutual consent without previous consultation, however, require topping-up.
An accidental failure to maintain the employment level due to normal fluctuations within an enterprise is irrelevant. If an employment relationship is terminated in a way that triggers topping-up, the employer is granted a reasonable period to search for suitable staff. It suffices to plausibly demonstrate search activities (e.g. publishing job offers, confirmed notification of vacancies to the AMS).
It is still not clear whether an employer's violation of the retention obligation is sufficient grounds for an individual's protection against termination; with regard to employees affected by short-time work, this cannot be excluded at least during the retention period after short-time work. Nevertheless, the failure to comply with the provisions on preserving employment levels may result in a reduction or complete loss of the short-time working allowance, depending on how serious the deviation is; amounts already paid out need to be paid back accordingly.
Originally published June, 2020.
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