Hire in Austria

In Austrian law, the normal working schedule consists of eight hours per day and 40 hours per week. However, collective agreements in many industries have shortened the working day or working week.

When exceeding the working-hour limits stipulated in a CBA, the practice is referred to as additional hours (Mehrstunden). When exceeding the legally described limit, it is referred to  as overtime (Überstunden).

Executives (persons who are assigned important managerial duties within an organization, which they must carry out at their own responsibility) are not subject to the scope of work statute on working time (Arbeitszeitgesetz).

In addition to their monthly pay, employers in Austria may also provide employees with a holiday bonus. This is known as the 13th and 14th month paycheck or holiday money. These are usually paid out in June and November, if included in the CBA or employment contract.

It is common practice in Austria to reward employees through discretionary bonus payments. Bonuses granted on a discretionary basis can be revoked at any time by the employer. It cannot be claimed by the employees. However, the employer must explicitly indicate that the payment is made at the employer’s discretion. The employer must also not indicate any target amounts or set up a bonus scheme (‘betriebliche Übung’).

In the banking sector, bonuses cannot be awarded to employees in cases where the bank has not made a profit or it has accepted government assistance.

Some CBAs allow loyalty bonuses for employees with a long period of service. This period is typically 20 years.

In addition to their monthly pay, employers in Austria may also provide employees with a holiday bonus. This is known as the 13th and 14th month paycheck or holiday money. These are usually paid out in June and November, if included in the CBA or employment contract.

It is common practice in Austria to reward employees through discretionary bonus payments. Bonuses granted on a discretionary basis can be revoked at any time by the employer. It cannot be claimed by the employees. However, the employer must explicitly indicate that the payment is made at the employer’s discretion. The employer must also not indicate any target amounts or set up a bonus scheme (‘betriebliche Übung’).

In the banking sector, bonuses cannot be awarded to employees in cases where the bank has not made a profit or it has accepted government assistance.

Some CBAs allow loyalty bonuses for employees with a long period of service. This period is typically 20 years.

Generally, employers in Austria are not required to justify ordinary terminations (Kündigungen). However, they must still observe prescribed notice periods and termination dates.

If an organization employs five or more employees, these employees enjoy “general protection against dismissals.” In this case, an employee may challenge a dismissal and claim reinstatement at the labor court if the dismissal resulted in adverse effects on the individual’s personal life. If a dismissal is challenged by an employee, the employer must justify the decision for reasons related to the employee’s capabilities, conduct or operational requirements.

Certain “vulnerable” employees enjoy additional “special protection against dismissal.” These may only be dismissed for one of several specific reasons, often only after the employer has received permission by the labor court or the equal treatment commission. These protected employee groups include women who are pregnant or who have recently given birth, parents on parental leave, works council members and employees formally classified as disabled persons. The protection of employees on parental leave is suspended four weeks following the end of the leave.

Employees in Austria can also challenge discriminatory dismissals or dismissals due to “illegal reasons.”

Unless otherwise stipulated in a CBA or employment contract, dismissals do not require any particular form. However, it is recommended to provide notice in writing. Rules may differ if “special protection against dismissal” applies.

If an organization has a works council, it must be informed of any proposed dismissals at least one week in advance. Within this timeframe, the works council may object, explicitly approve or refrain from commenting on the dismissal. The termination is considered void if the employer does not comply with this requirement, either by failing to notify the works council or by failing to wait for its response within that week timeframe.

Collective Dismissals

When collective dismissals (Massenkündigungen) are imminent, employers must notify the Austrian Employment Service 30 days in advance. For the sake of this notification procedure, collective dismissals are defined as terminations affecting:

• at least five workers at an establishment comprised of 21 to 99 employees; or
• 5% or more of the workforce at an establishment of 100 to 600 employees; or
• at least 30 workers at an establishment of more than 600 employees; or
• at least five workers aged 50 or over, regardless of company size.

The requirements of the notification procedure are met if the employer informs the competent agency in writing and then waits one month before executing the intended dismissals. Failure to observe any of these rules will render all intended dismissals void.

Furthermore, redundancy programs must be implemented cooperatively with the respective works council.

Summary Dismissals

A summary dismissal (Entlassung) does not require observance of any specific notice periods but must be issued without undue delay. Summary dismissals are possible for valid reasons only, as regulated by the law. These reasons include disloyalty, untrustworthiness or persistent refusal to carry out contractually agreed duties.

Summary dismissals are effective even when they do not meet the above requirements. However, summary dismissal may then be legally regarded as a regular dismissal. This means the respective protections against dismissal are applicable.

Clauses to restrict activities of an employee after an employment agreement ends are allowed. Reasonable restrictions aimed at protecting the employer’s legitimate business interests can be enforced, provided that:

• The restriction directly relates to the activity of the individual within the employer’s line of business.
• The maximum term of the clause does not exceed one year following the termination of employment.
• The employee’s monthly income is above a certain amount at the termination of the employment relationship (currently set at EUR 3,580).
• The restriction does not imply an undue aggravation of the individual’s professional progress.

The employer is not required to compensate the employee for the duration of the prohibition. Contractual penalties are limited to six net monthly remunerations. This does not take the 13th and 14th annual salary into account.

Non-competes

Non-compete clauses are allowed for special employees with higher income levels but are limited to be in effect for no longer than 12 months. If the non-compete clause is valid and enforceable, the employer is not required to compensate the employee during the non-competition period. Validity will depend on if:

• if the employee terminates the employment.
• if the employment relationship has been terminated by the employer for good reason with immediate effect.
• if the employee has terminated the employment with immediate effect without good reason.

If it is not enforceable (e.g. if the employer terminates the employment without good reason), the employer may have to pay the salary during the non-competition period in order to make the non-competition clause enforceable.

Customer non-solicits  are permissible in limited circumstances.

Employee non-solicits are permissible.

Under the Holidays Act, employees are entitled to enjoy a minimum five weeks of paid annual leave annually. When calculating leave according to working days (including Saturdays), employees are entitled to 30 days leave in each year of work. After 25 years of service this entitlement is enhanced to six weeks.

The working year commences on the date the employee started the job.

During the first six months of employment, holiday time accrues at a proportional share of the annual statutory holiday. This is approximately two days per month. From the start of the seventh month, employees receive the full leave entitlement. From the second year of employment, the full leave entitlement begins accruing at the start of the working year.

Employees must come to an agreement with their employer when they may take their leave. The employer must offer their consent.

If the employee falls ill for more than three calendar days while on annual leave, these days do not count as leave. However, the employee must report the illness to the employer immediately after three days’ absence and provide a medical certificate.

Carry Over Rules

Unused leave can be carried over but the leave is forfeited if not used within two years from the year in which the entitlement was accrued. Any annual leave taken is offset from the employee’s oldest entitlement.

The principle of continued remuneration ensures that in the event of sickness, industrial accident and occupational illness and during rest cure and convalescence leave, employees’ remuneration will continue to be paid. According to the Sick Pay Act (Entgeltfortzahlungsgesetz) (EFZG), employees’ sick leave entitlements are based on their length of service:

• in the first year of employment – 6 weeks
• two to 15 years – 8 weeks
• 16 to 25 years – 10 weeks
• from the 26th year – 12 weeks

After the period of paid sick leave expires, the employee is entitled to a further four weeks on half-pay.

When paid sick leave from the employer is exhausted, the Health Insurance System provides partial pay for a maximum of 52 weeks. The amount of sick pay depends on the earnings in the last month before the illness and the amount of continued remuneration paid. The employee is obliged to inform the employer as soon as they become incapacitated for work.

Care Leave

Employees are entitled to take unpaid time off or work part-time to care for their sick relatives without needing the consent of their employer. During care leave, employees are entitled to receive a state-funded care leave allowance. The most important details covering the care leave are as follows:

• Care leave can only be taken to take care of close relatives (e.g. spouse or children).
• The rules only apply to establishments having more than five employees.
• Employees must be employed for at least three months before gaining eligibility for care leave.

An employee must notify their employer when they want to start their care leave, once they know the start date of the intended care leave. No formal notification requirements are stipulated by the law. An employer can request proof of the need for the care leave and evidence of the relationship to the person who the employee wishes to care for.

Initially, the employee can request up to two weeks of care leave or part-time care leave. This can be unilaterally extended for up to four weeks. With the consent of the employer, an employee can extend their care leave or part-time care leave up to a maximum of six months.

Care leave or part-time care leave does not give the employee special protection against termination. However, if an employee can credibly show that they were given notice of dismissal because of their request for care leave, the dismissal may then be challenged on the grounds of bad motive.

Education leave

Educational or study leave may be mutually agreed upon at the employer’s discretion, following six months of continuous employment. The minimum period is two months while the maximum period is one year. If education or study leave is taken in periods, each period must last at least 2 months. It is possible to take the study leave in individual periods, spread over the course of four years. Salary will not be paid during this period. However, the employee is entitled to an additional training allowance (Weiterbildungsgeld) from the Employment Service (AMS) equivalent to the level of unemployment benefit to which they are entitled. The employee must participate in a training program at least 20 hours each week.

Maternity Leave

• The protection period (Mutterschutz) for pregnant employees typically starts eight weeks prior to the birth and then ends eight weeks thereafter. This incurs absolute employment prohibition. During this time, the employee must not be allowed to work at all).
• Throughout the protection period, the employment relationship continues to exist. The employee is entitled to a maternity allowance (Wochengeld) of an amount equivalent to the average remuneration during the last 13 weeks before the absolute employment prohibition went into effect.
• In cases of caesarean or multiple births, the work restrictions following the delivery are extended to a period of at least 12 weeks.
• If an employee’s maternity leave was reduced prior to the delivery, the work restriction after extends according to that reduction. The maximum is 16 weeks.

Parental Leave

Austrian law allows parents to take at least three months of unpaid parental leave between the birth of a child and the child’s second birthday. Parents may take up to one month at the same time. Either parent may take the remaining leave. Parents earning less than a certain yearly salary may be entitled to a designated childcare allowance (Kinderbetreuungsgeld) paid by the government.

Paternity Leave

• As per the Paternity Leave Act, fathers will be granted one month of leave for the birth of their child. This entitlement is called the “Daddy Month” (Papa Monat).
• At his request, the employee may be granted one month of leave in the period between the birth of his child to the end of the mother’s prohibition on employment following the birth. This applies only if he resides in the same household as the child.
• The employee does not need to have completed any minimum years of service to be entitled to paternity leave.
• The employer is not responsible for remuneration during the paternity leave.
• The earliest the paternity leave can start is the day after the child’s birth.
• An employee who takes a paternity leave can transition directly to a parental leave if the mother is unable to care for the child.

Adoption leave

• Adoptive parents are also entitled to parental leave in Austria.
• General paternity leave is also afforded to fathers of adopted and foster children under two years of age.

Childcare Leave

Mothers may reduce their working hours from full-time to part-time until their child’s 7th birthday or until the child starts school, whichever is later. This is allowed as long as they have been continuously employed by a business with more than 20 employees for at least three years.