Employment Law in Austria & Collective Labour Law

1

Private employment law

governs the contractual

relationship between employer and employee, focusing on

rights and obligations arising from the employment

contract (e.g. remuneration, duties of care, loyalty)

Public employment law

serves primarily protective and

regulatory functions, such as establishing working-time

limits, occupational safety rules, and anti–wage-dumping

provisions. It also governs the employment of foreign

nationals and the maintenance of fair labour-market

conditions.

Employee

Only natural persons (individual human beings) can be

employees. Legal entities, such as corporations, can engage in

service contracts but cannot themselves hold employee status.

Thus, the distinction between an employee and an independent

contractor is essential, as it determines the applicability of

protective employment law provisions.

White collar worker

They perform

predominantly commercial, higher non-commercial, or

office-based services within a business enterprise.

Examples: clerks, accountants, receptionists, IT specialists,

sales staff.

Blue collar worker

 traditionally involving manual or craft-based labour.

Examples: bakers, carpenters, mechanics, masons

Employment contract

a legally binding agreement between an employer and an employee that outlines the terms of their working relationship, including salary, job duties, working hours, and benefits. It can be written or verbal and serves to clarify the rights and responsibilities of both parties, help prevent disputes, and ensure legal compliance

Employer obligations of the employment contract

payment of agreed remuneration and

a duty of care (Fürsorgepflicht) — including protection of

health, dignity, and safety.

Employee obligations of employment contract

performance of work and duty of

loyalty (Treuepflicht), encompassing confidentiality,

avoidance of competing employment, and safeguarding the

employer’s interests.

Do employees owe a specific result?

No, only the due performance of work

European law in Austrian employment law

 EU law has a direct and profound influence on Austrian

employment law.

• Regulations are immediately applicable and binding (e.g.

the GDPR, Rome I, and Brussels Ia Regulations).

• Directives bind Member States as to results, requiring

national implementation.

Constitutional law in Austrian employment law

While the Austrian Constitution plays a limited role in labour

law’s substance, it governs:

• Competence division between the federal government and federal states, and

• Fundamental rights (e.g. equality before the law

Mandatory law in Austrian employment law

Mandatory provisions (either one-sided or two-sided) restrict

contractual deviation:

• One-sided mandatory law allows deviation only in favour of

the employee.

Example: Legal notice periods for employers cannot be

shortened.

• Two-sided mandatory law permits no deviation at all.

Example: A contractual agreement substituting vacation

with cash payment (Urlaubsablöse) during employment is

void.

Collective Bargaining Agreements (CBA) in Austrian employment law Definition

 A Collective Bargaining Agreement (CBA / Kollektivvertrag) is a written agreement between employers’ associations(usually via the Economic Chamber – Wirtschaftskammer) and employees’ unions (via the Chamber of Labour – Arbeiterkammer or trade unions).
→ It regulates working conditions and wages for specific industries or sectors.

CBA Legal Nature&Effect

 Binding by law: Once applicable, the CBA’s provisions are automatically binding on all employers and employees in that sector.

• No opt-out: Even non-union members are covered.

• No general statutory minimum wage in Austria — minimum wages come from CBAs.

• Favourability principle (Günstigkeitsprinzip): Individual contracts may not set worse conditions than the CBA.

CBA Main Content

• Minimum wage / salary tables

• Working time, overtime pay, breaks, shifts

• Bonuses (13th, 14th salary – Christmas, holiday pay)

• Allowances, travel expenses

• Job classification and promotion rules

• Termination and notice periods

Determining the Applicable CBA

• Based on employer’s business license / industry (Gewerbeberechtigung) → defines membership in a specific trade group (Fachverband).

• If multiple CBAs could apply → principle of Tarifeinheit (only one CBA applies — the most relevant to main business activity).

Enforcement & Sanctions

 If employer pays below CBA → employee can claim difference in pay.

• Violations: Fines under Lohn- und Sozialdumping-Bekämpfungsgesetz (Law Against Wage & Social Dumping), up to €50,000 per underpaid employee.

• Applies also to posted workers: foreign companies must comply with Austrian CBA minimums.

Shop Agreements in Austrian employment law

Definition:
Written agreements between the employer and the works council (Betriebsrat) regulating company-level employment matters.
→ Only possible if a works council exists.

Scope:

Covers issues allowed by law or CBA, e.g.

Working time distribution & breaks

Conduct rules / workplace order

Pay procedures, internal training

Welfare & company benefits

Effect:

Binding (normative effect) for all employees in the company

Individual contracts may only be more favourable

Must comply with law and CBA

Form:

Must be written and posted/published in the workplace

End / Duration:

Usually terminable with 3-month notice

Nachwirkung: remains effective for existing employees until replaced

Purpose:

→ Adjust general legal/CBA standards to the company’s needs

Individual employment contacts in Austrian employment law

Employment contracts form the lowest tier of legally binding norms and cannot override mandatory law, CBA provisions, or valid shop agreements. They can, however, supplement them to the employee’s advantage.

Employer Instructions in Austrian employment law

The employer’s right to give instructions on how, when, and where the employee must perform work — part of the subordination element in an employment relationship. Employer instructions define how work is done,
but they are limited by law and fairness — not absolute power.

How is Austrian employment law structured?

 Decentralized and fragmented; main sources:

• ABGB – civil law principles

• AngG – white-collar rules

• ArbVG – collective labour law

• AVRAG – harmonization/modernization
  Supplementary laws: UrlG (vacation), GlBG (equal treatment), AZG (working time)

Who represents employees and employers in Austria?

 Mandatory: AK (employees), WKÖ (employers) – compulsory membership

• Voluntary: Trade unions / employer associations (e.g. ÖGB, IV)

• Social Partnership: Corporatist cooperation ensuring industrial peace & influencing policy

What are the main employee and employer representative bodies in Austria?

• Chamber of Labour (AK) – employees

• Economic Chamber (WKÖ) – employers

What are the tasks of the AK and WKÖ?

• Negotiate CBAs

• Participate in legislation

• Provide legal advice & representation

• Nominate lay judges for labour courts