Thematic feature - posted workers

This article examines the Austrian situation, as of June 2003, with regard to: legislation and collective bargaining on the pay and conditions of posted workers (ie workers from one EU Member State posted by their employer to work in another); the number of such posted workers; and the views of the social partners and government on the issue.

EU Directive 96/71/EC concerning the posting of workers in the framework of the provision of services seeks to avoid 'social dumping' by ensuring that a minimum set of rights is guaranteed for workers posted by their employer to work in another country. The basic principle is that the working conditions and pay in effect in a Member State should be applicable both to workers from that State, and those from other EU countries posted to work there. The Directive covers undertakings established in a Member State, which, in the framework of the transnational provision of services, post workers to the territory of another Member State.

The Directive establishes a core of essential regulations aimed at ensuring employees' minimum protection in the country in which their work is performed. It guarantees the application of the host country's statutory and regulatory provisions relating to:

  • maximum work periods and minimum rest periods;
  • minimum paid annual holidays;
  • minimum rates of pay, including overtime rates (excluding supplementary occupational retirement pension schemes);
  • the conditions of hiring-out of workers, in particular the supply of workers by temporary employment agencies;
  • health, safety and hygiene at work;
  • protective measures with regard to the terms and conditions of employment of pregnant women or women who have recently given birth, of children and of young people; and
  • equality of treatment between men and women and other provisions on non-discrimination.

As well as these generally applicable statutory and regulatory provisions, a Member State's collectively agreed provisions on these issues must also be applied to workers in the construction sector (where these are based on 'collective agreements or arbitration awards which have been declared universally applicable').

The Directive allows for a number of exceptions to all or some of these 'minimum provisions' for: the crew of merchant ships; staff involved in the initial assembly and/or first installation of equipment; postings lasting less than a month; and where 'the amount of work to be done is not significant'. The Member States were obliged to transpose the Directive by 16 December 1999.

In 1999, the European Industrial Relations Observatory (EIRO) conducted a comparative study on posted workers and the implementation of the Directive. In June 2003, the EIRO national centres in each EU Member State (plus Norway), have updated the basic information in the earlier comparative study, four years on, in response to a questionnaire. The Austrian responses are set out below (along with the questions asked).

Regulatory framework

What changes were made to national legislation in your country in order to implement the Directive? And have there been any further changes to the relevant legislation since then?

In 1999, both the Temporary Work Act (Arbeitskräfteüberlassungsgesetz, AÜG) and the Employment Contract Law Adaptation Act (Arbeitsvertragsrechts-Anpassungsgesetz, AVRAG) were amended due to the requirement to implement the EU Directive. Thus, the new legislative framework extended the applicability of national employment regulations to posted workers from just wages to include working time and leave entitlements. Further changes to the AÜG were made in 2000, obliging the employer/employment agency to conclude a special agreement laying down the detailed employment conditions to be granted to posted workers. According to new regulations enacted in 2002, posting employers are obliged to collect certain categories of data on their posted workers.

Please outline very briefly the current legal position of posted workers in your country - are they covered by specific or general employment legislation, what is their position with regard to social security (are they covered under the social security system in their country of origin or the host country?) etc. Also, have any specific measures been taken to prevent abuses arising from the posting of temporary agency workers (eg an agency hiring temporary workers through a subsidiary in a low labour cost country and sending them to work for a user company in a higher labour cost country)?

According to the AÜG and the AVRAG (which are both specific laws applying to posted workers), most regulations discriminating against posted workers in terms of labour law have been abolished. Thereby, the AÜG does not differentiate between Austrian nationals and foreign workers. As for posted workers' social security, they are mostly covered under the respective systems in their country of origin. The AVRAG (most recently amended in 2002) stipulates adherence to legal and collectively agreed minimum wage standards, as applicable to comparable employment in the relevant sector, for employees normally working in Austria but employed by a firm domiciled in another country. Since 1999, posted workers have been entitled to an extension of their leave entitlement in proportion to the duration of their employment in Austria, if Austrian law provides for more days of annual leave than their home country law does. Furthermore, collectively agreed working time regulations are binding on workers posted to Austria.

As for temporary agency workers, the AÜG stipulates that, in the event that the customer (ie the user company) is not capable of fully employing the posted worker as agreed with the posting firm, the posted worker is entitled to be paid fully according to the relevant 'basic agreement'. This agreement (concluded between the posting employer and the customer) must include at least details of pay regulations, leave entitlement, extent and content of work, venue, terms of notice et. Concerning 'third-country' nationals posted to Austria by a firm located in another European Economic Area (EEA) country, a permit referred to as a 'European posted worker certificate' (EU-Entsendebestätigung) must be issued. This is only possible when the employee being posted has concluded a contract of employment of unspecified duration with the employer posting him or her to Austria.

The most important measure to prevent abuses arising from the posting of workers is commonly deemed to be the fact that Austrian minimum wages (laid down in sectoral collective agreements) have to be paid to posted workers from the first day of employment and that both the posting company and the customer (ie the user company) are liable for the wages and working conditions of workers posted from abroad.

Have there been any collective agreements concluded on the issues covered by the Directive? Have the social partners been consulted as part of the legislative and policy-making process and, if so, in what way? Have the social partners taken any other initiatives related to posted workers?

Austria’s first ever collective agreement for temporary agency workers came into effect in March 2002 (AT0202202N). This agreement specifies a graded system of minimum wages applicable even if the worker is not actually hired out to a user company. As pointed out above, the level of pay for posted workers must be based on the collectively agreed pay due to comparable employees of the user company for doing comparable work. If these pay provisions, however, are below the collectively agreed minimum wages for the agency work sector, the latter must be applied. This arrangement was reached after lengthy negotiations between the social partners, after trade unions had called for such provisions since the 1990s.

The workers affected

Please provide the latest figures available on the number of employees who are posted from your country to other EU Member States.

No figures at all on the number of employees posted from Austria are available. Most of the posting seems to take place between subsidiaries of transnational enterprises or from the headquarters to subsidiaries abroad (eg in the Austrian mineral oil production sector).

Please provide similar figures, if available, for employees posted to your country from other EU Member States.

In 2002, the number of workers posted from other EU Member States to Austria stood at 3,550, according to information from the Austrian Institute of Economic Research (Österreichisches Institut für Wirtschaftsforschung, WIFO).

Workers in the construction industry

The EU Directive, although of general application, is aimed particularly at workers in the construction industry (building and public works), in which discrepancies between practice and legal standards are often observed. Has any special action been taken by the social partners or the state to address the situation of posted workers in this industry?

No initiatives or special actions concerning posted workers in the construction industry have recently been taken by either the state or the social partners.

With Austria’s accession to the EU in 1995, posted workers from abroad were legally granted the right to be paid minimum wages as set out the relevant collective agreements. This measure is regarded as having significantly contributed to the subsequent decrease of the number of postings of workers from low-wage countries, in particular in the construction industry.

Before 1999, workers posted to Austria from abroad in the construction industry who were engaged in equipment assembly and repair jobs for up to three months were not covered by the AVRAG regulations providing for equal entitlement to collectively agreed minimum pay. The 1999 amendment of the AVRAG (see above) mostly repealed this exemption, since a clear framework regulating pay and working conditions was regarded as necessary to avoid widespread exploitation of these workers from abroad.

The abovementioned favourable regulation of leave entitlements for posted workers from abroad (guaranteeing an extension of annual leave entitlement in comparison with home country law if the Austrian legislation is more favourable for the worker) does not apply to posted employees in the construction industry, however. This sector has separate leave legislation, the Construction Workers’ Leave and Severance Pay Act (Bauarbeiter-Urlaubs- und Abfertigungsgesetz, BUAG).

The positions of the social partners and government

Please outline the stances adopted by the social partners and the public authorities/government on this issue. Particular attention should be given to unions and employers in the construction industry.

The Austrian government/legislator has never taken the initiative in improving the pay and working conditions of posted workers from abroad. Rather, it was forced by the 1996 EU Directive to amend the relevant legislation in order to grant all posted workers from within the EEA equal rights as resident (Austrian) employees as regards pay, working time and paid leave. Notably, the amendments to the relevant legislation did not take place any earlier than the 1999 deadline for implementation of the Directive.

Interestingly, the Austrian legislator has adopted legal provisions to allow for intervention in Austrian companies' practices in terms of using posted workers by way of decree, if these practices result in unfavourable labour market developments. According to the AÜG, the Minister of Economy and Labour Affairs can introduce limits to the number of posted workers to be employed by an Austrian firm (if the proportion of posted employees exceeds a limit of 10% of all workers employed by the company). Up until now, no such decrees have been issued, however.

The trade unions have always considered the trans-border posting of workers to Austria as endangering the jobs of Austrians. The main concern is the protection of Austrian employees from any competition rather than the protection of posted workers from exploitation. Hence, the legislation implementing the Directive meets the interests of the unions, in so far as posting to Austrian as a means of 'social dumping' by importing low-wage workers (via subsidiaries abroad) has been stopped.

As for the employers’ organisations, they, in general, also comply with the legal situation. However, since, in particular in the construction industry, the new rules have increased costs for workers posted from abroad almost up to the level of 'regular' staff (there is still a difference between the minimum rate of pay applicable to the posted worker and the actual pay level applicable to the permanent staff, however), the number of posted workers from abroad is close to negligible. (Georg Adam, University of Vienna)

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