Austria: Equal treatment for blue- and white-collar employees

The Austrian Parliament has voted to abolish the legal differences between blue-collar workers and white-collar workers, which will particularly affect sick pay, notice periods and entitlement to paid absences from work. This harmonisation has been a long-standing demand of the trade unions, although employers are disappointed with the outcome because of expected cost increases.

Details of the vote

The Austrian Parliament voted to pass the reform on 12 October 2017 in the last parliamentary session before federal parliamentary elections on 15 October. The reform was supported by the Social Democratic Party (SPÖ), the far-right Freedom Party (FPÖ) and the Green Party (Grüne).

Legal distinction between white-collar and blue-collar workers

Austrian law distinguishes between two categories of employees: white-collar workers (Angestellte); and blue-collar workers (Arbeiter/innen). Under the White-Collar Workers Act (Angestelltengesetz), a white-collar worker is a person who is employed predominantly in commercial or other higher, non-commercial services or clerical office work. However, there is no specific definition of a manual, blue-collar worker with all employees not classified as white-collar workers falling into this category. For blue-collar workers, regulations in the respective collective agreements apply, as well as the Austrian General Civil Code (Allgemeines bürgerliches Gesetzbuch) and the Trade Regulation (Gewerbeordnung).

Up until now, blue-collar workers have been at a disadvantage in areas such as sick pay, the reasons they can take paid absence from work, and their periods of notice. However, technological change has meant that the skill levels of blue-collar workers have been continually rising, so that they now perform not only simple manual work, but also qualified skilled work (Facharbeiter/innen) which requires years of training. Thus, the relevance of the differentiation between the two groups of workers has been questioned over the years.

Harmonisation of regulations

Notice periods

Currently, blue-collar workers have a negotiable notice period of 14 days, which may be changed via a collective agreement to as short as just one day (such as in small local businesses). In contrast, white-collar workers have statutory periods of notice, which to their disadvantage cannot be shortened and with the time period extended the longer they work for the employer. The basic period is 6 weeks, which increases to 2 months after 2 years of employment in an establishment, 3 months after 5 years, 4 months after 15 years, and 5 months after 25 years.

The change in the law means that the longer periods of notice will also apply to blue-collar workers. There will, however, be a transitional period with the new regulations coming into force from 1 January 2021. An exemption from this regulation may be applied in sectors with a high share of seasonal businesses (for example, construction or tourism). In these branches, deviations to the regulations may be applied in collective agreements, so it is therefore necessary to have an agreement between employers and employees.

Continued sick pay

The system of sick pay will also be harmonised, bringing about improvements for both groups of workers. The legal entitlement for continued remuneration in the case of sick leave has thus far been (and will remain) dependent on the length of service. Under the current regulations, workers who have been continuously employed for:

  • up to 5 years are entitled to receive full pay for 6 weeks;
  • between 5 and 15 years will receive full pay for 8 weeks;
  • between 15 and 25 years will receive full pay for 10 weeks;
  • more than 26 years will receive full pay for 12 weeks.

In addition, in each case, workers receive a further four weeks of half pay. Under the new regulation (coming into force on 1 July 2018), both types of workers will be entitled to sick pay for eight weeks from the second year of continued employment with the same employer. The basic period of six weeks (for those who have worked less than one year for an employer) and the other incremental stages will not change.

In the case of occupational accidents, remuneration for white-collar workers has, up to now, been taken from the general entitlement for sick leave, whereas blue-collar workers have had a separate entitlement to remuneration (8 weeks in the first 15 years of service for the same employer, and 10 weeks thereafter). With the harmonisation, white-collar workers will receive the same separate entitlement in the case of work accidents as blue-collar workers.

Paid absence from work

For both blue-collar and white-collar workers, ‘important personal reasons’ which allow for continued remuneration during an absence from work are regulated. White-collar workers are entitled to such remuneration if they are prevented from working due to significant personal reasons, through no fault of their own, and for a relatively brief time. Examples in the collective agreements include a worker’s wedding or family bereavement. Even though no maximum duration of paid absence is defined, the limit is generally accepted as being one week.

However, the regulations for the two types of employees have differed in the detail. While these provisions apply to both categories, they are mandatory for white-collar workers. But for blue-collar workers, they may be modified in collective agreements so that their remuneration applies only in specific cases laid down in their collective agreements (which also specify the number of paid days of absence in each case).

With the harmonisation of the regulations for the two employee groups (starting on 1 July 2018), restrictions in blue-collar workers’ collective agreements on remuneration in case of absence on personal grounds may no longer be applied. This could mean, for example, that a blue-collar worker delayed in returning to work from holiday due to travel problems may now receive remuneration, even though this specific case is not mentioned in collective agreements.

Timing and social partner reactions

The parliamentary vote took place just three days before recent federal elections were held. The legislative package (including some further measures) was brought in by the then ruling SPÖ and was supported by the FPÖ and Green Party, but not by the People's Party (ÖVP), with which the SPÖ was forming a coalition and which called for new elections.

In the elections, the SPÖ which had feared a loss in votes, finished with the second largest number of seats behind the ÖVP, narrowly ahead of the FPÖ. The ÖVP had strongly criticised the vote on the harmonisation of the two employee groups, as did the New Austria and Liberal Forum party (NEOS) (the fifth largest in the national parliament before the elections), which called the vote a ‘cheap election campaign lollipop’.

Erich Foglar, President of the Austrian Federal Trade Union Federation (ÖGB), called the harmonisation a ‘milestone for the world of work’, adding that the change would be cost-neutral for the national economy. Rainer Wimmer, President of the Union of Production Workers (PRO-GE) and Roman Hebenstreit, President of the Transport and Service Union (vida) welcomed the fact that the two-class-workforce was being abolished and added that it was about time that the unjustified discrimination of blue-collar workers had ended.

Employers, although criticising the vote for being hasty and without prior social partner negotiations, were in favour of harmonising regulations on the two employee groups. Georg Kapsch, President of the Federation of Austrian Industry (IV) – which has voluntary membership – and Christoph Leitl, President of the Federal Economic Chamber (WKO) – which has mandatory membership – have agreed that differentiating between the two groups would be outdated. However, although open to harmonisation, they warned against either side ‘cherry-picking’ terms, advocating instead a serious common approach.

Dr Leitl stated that such harmonisation is a harmful solution for the country saying that the new regulations would mean a massive cost increase for companies which would be reflected in higher unemployment and lower economic growth. Christoph Neumayer, Director-General of IV, added that without prior assessment of the draft bill by the social partners (which is common practice in Austria), this step constituted a massive interference in long-established collective agreement structures.

Commentary

While some aspects between the different treatment of blue- and white-collar workers have been addressed with agreements reached mostly on improvements for blue-collar workers, a complete harmonisation of rights is still outstanding. It also remains to be seen whether the new federal government – most likely a coalition between the ÖVP and FPÖ with the ÖVP providing the Chancellor – will change or even halt the bill (considering that the ÖVP was strongly against it from the start).

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