Organized body of employers formed to represent the labour market interests of its members vis-à-vis the unions and the government. Individual employers group together not only for the representation of their shared interests in the labour market but also for the representation of their shared interests in other markets (product and financial markets), mainly in relation to their suppliers and customers. An employers' organization is therefore a specific form of business association (Unternehmerverband) and to be distinguished in particular from a trade asssociation (Wirtschaftsverband), which represents the product market interests of its members. Depending on their degree of specialization in these functions, it is necessary to differentiate between three forms of business association: those which are purely employers' organizations in that they concentrate exclusively on representing their members' labour market interests, those which are purely trade associations in that they specialize in their members' product market interests, and “combined” business associations which are so-called because they combine the functions of both an employers' organization and a trade association.
In Austria there are only two employers' organizations of cross-sector importance. Both are “combined” business associations and are also among Austria's “social partners”, i.e. the select circle of associations represented in the system of social partnership. They are the Economic Chamber of Austria (Wirtschaftskammer Österreich, referred to as WKÖ) and the Federation of Austrian Industry (Vereinigung der Österreichischen Industrie, referred to as VÖI). Of these two, only the WKÖ (mostly through its sectoral subunits) engages in collective bargaining (see collective bargaining system). Owing to the WKÖ's comprehensive constituency (within which membership is obligatory), almost all collective agreements in Austria are concluded under its umbrella. As a result, in the profit-making sector there are fewer than 10 employers' organizations which conclude collective agreements, with each (outside the WKÖ) representing only a small sector of the economy, such as agriculture and banking, and taking their cue from the WKÖ as regards bargaining policy.
The WKÖ's key position in Austria's collective bargaining system is strengthened even more by the fact that, on the employers' side, collective agreements are concluded almost exclusively by employers' organizations, whereas in most other countries they are also concluded by individual employers. One of the features of Austria's Labour Constitution Act (Arbeitsverfassungsgesetz: see works constitution) is that it severely restricts the individual employer's capacity to conclude collective agreements. As a general rule, bargaining capacity is conferred only on employers' organizations, the sole exception being the capacity granted to public-law legal persons to conclude agreements for their establishments and administrative agencies.
These labour law provisions mean that multi-employer bargaining is the normal case in Austria's industrial relations system. Indirectly, they reinforce the ability of the employers' organizations to impose obligations on employers and exert authority over them, which in other countries is weakened by the presence of other employers who join an association but opt not to be bound by the agreement, and by the widespread use of company agreements. Technically speaking, the provisions do not entirely exclude special collective agreements for individual enterprises, since it is possible for an employers' organization to conclude one in the name of the member employer concerned. This rarely occurs in practice, however.