A new coalition government has been formed in Austria by the two parties that were in power before the autumn general election: the Social Democrats and the People's Party. The new government’s work programme for 2013 to 2018 was presented in mid-December 2013. It introduces several new labour market and social policy measures, including initiatives to encourage young people to stay in education and older people to remain in work. The social partners’ response has been mixed.
Election results
A general election was held in Austria in September 2013 at the end of the five-year parliamentary term. As in 2008, the Social Democratic Party (SPÖ) and the conservative People’s Party (ÖVP) won the largest share of the vote, although both parties lost seats. The right-wing Freedom Party (FPÖ) came third but increased its share of the vote. After several weeks of negotiations, a new ‘grand coalition’ was agreed between the SPÖ (with 26.8% of the vote) and ÖVP (24%). The two parties now hold 99 out of 183 seats in parliament.
After several weeks of negotiations, the Work programme of the Austrian Federal government 2013–2018 (in German, 830 KB PDF) was presented to the public in mid-December 2013. Following several work meetings between the two governing parties to discuss timings, several of the originally rather vague programmes detailed in the report have been put into more concrete terms.
Keeping the young in education
The government’s work programme includes a variety of measures covering work and employment, the labour market and social/family policy.
Targeting the high the number of early school leavers and young people not in employment, education or training (NEET), from 2016 onwards the government plans to make every young person stay in education beyond compulsory school-leaving age until the age of 18, whether in colleges or in apprenticeship training. Those who don’t comply will be fined.
This measure follows on from the ‘education guarantee’ introduced in 2009 by the Minister of Social Affairs, Labour and Consumer Protection, Rudolf Hundstorfer. From 2016, young people will also be prohibited from taking unskilled labour jobs. This measure is intended to remove the incentive to work and earn money instead of remaining in education.
There are four major social partners in the private economy: the Austrian Trade Union Federation (ÖGB) and the Chamber of Labour (AK) on the employees’ side; the Federal Economic Chamber (WKO) and the Federation of Austrian Industry (IV) on the employers’ side. While they agree that remaining in some form of schooling or training until the age of 18 is desirable, the unions have criticised the planned fines for those who don’t comply. For employers, the WKO has argued that companies should not be obliged to provide extra apprenticeship places, but that supra-company apprenticeships should be established instead.
Keeping older people in work
Incentives for older people to carry on working are part of the government’s five-year work programme. The aim is to increase the actual retirement age in Austria from 58.4 years in 2012 to 60.1 years in 2018 and improve the employment rates of older workers. The plans include the introduction of a partial pension, making it possible for older people to reduce their work hours by at least 30%. There is already a 4.2% bonus for those who choose to delay taking their state pension. If they delay specifically to stay in work, the bonus will be increased to 5.1%. Employers will also receive a bonus when they employ a previously unemployed person of 50 years or older.
The most drastic measure in this area will be the introduction of a system that either rewards or penalises companies for their success in keeping a certain number of older workers on their payroll. A form of this was originally proposed by the social partners in 2011 (AT1110011I).
Companies with 25 or more employees will be told how many older workers they should be employing. Their quota will be based on the average data for their sector, calculated separately for men and women. Companies will be told from 2014 onwards what their quota is, and they will have to meet it from 2016 onwards. Until then, the current cancellation fee that employers pay when an employment relationship is cancelled will now be earmarked as a bonus for companies that have continued to employ workers aged 55 and over.
From 2017 onwards, all companies with 25 or more employees who do not meet their quotas will have make a penalty payment, and this will be set at the same level as the existing cancellation fee (currently €115). The government has asked the social partners to start negotiations immediately to work out the details of these regulations.
Employees’ representatives generally welcome this penalty-reward system. The AK, however, says the sanctions are not severe enough. AK also argues that there should be different quotas for different sectors, because some offer work that is naturally more suited to younger people. AK believes the target increase in the actual retirement age to 60.1 years by 2018 ‘very ambitious’.
The IV opposes the plan, arguing that real measures to increase the actual retirement age are missing from the government’s work programme.
Social and family policy
Over the next few years, the government will introduce several measures to improve employees’ work–life balance.
Childcare facilities will be expanded in all regional states in Austria, especially for children under three, in order to reach the Barcelona objectives for young children which state that childcare should be available for at least 33% of children under three years of age.
Children with special needs, such as those whose first language is not German and do not speak it fluently, will be obliged to attend a second, obligatory year of preschool which will be free of charge.
The various flat-rate childcare benefits, which are paid over varying periods and payments therefore differ, are to be made more transparent and flexible. Thus ‘childcare benefit account’ will be introduced. The childcare benefit is a universal benefit that allows parents (who wish to do so) to work (minimal) hours while receiving the benefit (and without losing it). This additional income (in €) that is now allowed is to be changed to a working time limit (in hours). Furthermore, the right to parental part-time work is to be limited from the seventh birthday of the child to the fifth birthday, and from 2017 to the fourth birthday of the child.
The introduction of paternal leave after the birth of a child will also be considered. Paternal leave for civil servants was introduced in 2011 (AT1101011I).
Both employees’ and employers’ organisations are generally in favour of the expansion of childcare facilities and the introduction of a second obligatory preschool year. While the IV is sceptical about the introduction of parental leave, the WKO is ‘ready to negotiate it seriously’. Both AK and ÖGB are in favour.
Further issues
The government also plans to reform legislation to prevent social dumping and wage dumping, first introduced in 2011 when the labour market opened to migrants from eight new central and eastern European Member States (AT1105011I). Such reform is welcomed by the ÖGB, which has been demanding stricter controls and stronger sanctions.
The unions would also have appreciated an increase in unemployment benefits and a reduction in working hours, but employers have criticised the government’s lack of any plans to reform working time flexibility regulations. The IV said it would have favoured a ‘modernisation’ of working hours, which would mean the extension of the working day to a maximum 12 hours. The employers’ organisations are however content that the introduction of company fees of €1 per hour of overtime was not included in the government’s programme.
The union confederations had been vocal in their demands for the introduction of taxes on private capital, but this is also not part of the government’s work programme.
The ÖGB has welcomed the planned introduction of the right of part-time workers to be told when a position with more working hours is being advertised by the company they work for. Unions are also pleased about plans to make ‘all-in’ employment contracts more transparent, setting out the basic wage, and the government’s demand that social partners should screen all collective agreements for hidden or potential discriminatory elements.
The IV is generally critical that substantial structural reforms are missing from the work programme.
Commentary
The programme is not binding in any way on the government, so it remains to be seen how many of the measures proposed are actually implemented over the course of the coalition’s legislative period.
Bernadette Allinger, FORBA (Working Life Research Centre)