In Austria, the debate surrounding greater flexibility of the employment relationship is concentrated on two issues: working hours and pay. Other forms of flexibility, although important, are not usually the focus of collective agreements and works agreements.

Working hours: Since the beginning of the 1980s there has been an increasing call from employers for more flexible working hours, while the unions have in turn directed their efforts at the reduction of working hours. The study by the Advisory Council for Economic and Social Affairs, which in 1984 recommended as a feasible option the shortening of the working week and introduction of more flexible working hours on a sector-by-sector basis, provided any such more flexible arrangements also take employees' interests into account, signified an agreement in principle on the matter. This delegation of responsibility for policy on working hours to the bargaining parties at sectoral level (see bargaining level) led in most cases to a compromise in the form of a trade-off between shorter hours and more flexibility. From the mid-1980s onwards a series of sectoral agreements established, on the one hand, a reduction of the working week and, on the other, a framework for more flexible working hours (see bargaining level). Many of these agreements left the detailed regulation of actual working hours within that framework to a works agreement concluded between management and works council. One good illustrative example of the importance of collective agreements for setting frameworks for more flexible working hours are collectively agreed rules setting upper and lower limits for weekly working hours (“bandwidth” models). Over a specified reference period actual weekly hours may vary within these limits provided that normal working hours (i.e. the stipulated weekly hours) are observed on average over the reference period concerned. Since these agreements also provide for a shortening of the working week, the normal working hours are usually less than a 40-hour week. The most recent amendment of the Working Time Act (Arbeitszeitgesetz) has enlarged the former options for flexible arrangements, for example by extending the reference period over which working hours may be averaged to 52 weeks, but reserves their introduction to regulation by collective agreement. As part of the national action plan on employment, in 1998 the social partners undertook to implement these statutory options in their bargaining policy with proper consideration for a fair reconcilement of employer and employee interests. In particular, the aim is to achieve greater flexibility by using models which separate business operating times from working hours and allow the latter to be adjusted to fluctuations in production.

Pay: From the macroeconomic point of view, pay flexibility is high in Austria. By OECD standards it is one of the countries with the largest sectoral pay differentials, and annual pay bargaining is also more sensitive to fluctuations in employment than it is in other countries. This is because the pay policy adopted by the parties to collective bargaining gives precedence to job security over other objectives. Apart from this underlying approach, in 1993 and from 1997 onwards special provisions on increased pay flexibility were agreed for the metal industry and the constituency of the “global” bargaining round (white-collar workers in most of the rest of manufacturing) which authorized management and works councils to apply a component of the agreed increases in actual pay through works agreements, in accordance with company-specific criteria. In the 1993 agreement this was permitted only for the purpose of financing job-protection measures (e.g. further training), while the 1997 agreement allows the parties at individual establishment level a degree of scope for increasing pay.

Please note: the European industrial relations glossaries were compiled between 1991 and 2003 and are not updated. For current material see the European industrial relations dictionary.