1999 Annual Review for Austria

This record reviews 1999's main developments in industrial relations in Austria

Economic developments

Austria experienced strong economic growth throughout the 1990s, with an annual average increase in GDP of nearly 2.5%. However, 1999 saw a slight decline of the growth rate, with the annual increase estimated to average 2.2%. In 2000, economic growth is expected to accelerate to 2.8%.

The public deficit amounted to ATS 54.5 billion in 1999, while the net deficit as a percentage of GDP - a major EMU convergence criterion - remained stable at 2%, resulting in a slight decrease of public debt compared with 1998 figures. From 1993-6, Austria had considerably exceeded the projected deficit level of 2.5% - an increase which was interrupted only following severe cuts in public spending in 1996.

In the 1990s, the public debt ratio (as a percentage of GDP) continued to rise, reaching nearly 70% in 1996. The sharp decrease in the following years was again attributable to severe cuts in public expenditure. However, gross debt is still rising - the ratio stabilised at 63% in 1999 and remains above the projected level of 60%. As with the public deficit, the development of public debt in percentage terms of GDP is likely to pose a problem for policymakers in the coming years. Austria faced recent criticism from the EU authorities for its rather "loose" financial policy, with EU officials expecting its budget deficit to rise rapidly in 2000.

Throughout the 1990s, inflation was low, at around 1% per year. Average inflation during 1999 had been expected to remain stable at around 1%, but recorded rates of 0.2% in the first two quarters and 0.5% in the third quarter of the year indicate that a further overall decline would appear likely in 1999.

After years of unemployment growth, economic growth has finally been translated into more sustainable employment growth. Unemployment rates amongst nearly all age groups declined in 1999, with sole exception of older workers. The overall unemployment rate declined from 4.6% at the end of 1998 to 4.2% (EU definition). This means that unemployment in Austria is less than half of the EU average unemployment rate of 9.1%.

Political developments

Although a number of provincial elections were held during 1999, it was the national parliamentary elections held on 3 October 1999 which were by far most important, as they radically changed the climate of Austrian politics. The coalition government which had been in power since 1986, made up of the Social Democratic Party (Sozialdemokratische Partei Österreichs, SPÖ) and the conservative Austrian People's Party (Österreichische Volkspartei, ÖVP), lost considerable support in this election, while the populist Freedom Party (Freiheitliche Partei Österreichs, FPÖ) obtained the second-largest share of votes. Following this outcome, the ÖVP initially announced that it would go into political opposition. However, the SPÖ strongly objected to forming a coalition with the FPÖ and therefore talks between the SPÖ and ÖVP took place during December 1999 and January 2000. However, these talks collapsed in January and the ÖVP subsequently began negotiations with the FPÖ. An agreement between these two parties on a basic text for joint government was reached in early February 2000 and subsequently approved by President Thomas Klestil. However, the inclusion of the far-right FPÖ in the Austrian government has caused international controversy, with the governments of many EU Member States indicating that they will loosen diplomatic relations with the new coalition (AT0002212F).

Collective bargaining

Collective bargaining in Austria is dominated by results reached in the metalworking industry, and the 1999 bargaining round was no exception.

Pay

The autumn 1999 round focused on wages and salaries and produced rather moderate outcomes, following larger increases achieved in recent years. The metalworking industry agreed increases of 2.4% with regard to minimum wages and salaries, an increase which was well above forecast inflation (AT9911203N). This outcome had significant repercussions for most subsequently-negotiated agreements, which largely followed the trend set by metalworking. A major exception was the collective agreement for employees in commerce, which provided for salary increases of only 1.75%. Further, collective agreements in several sectors contained a "distribution option", which allows for more flexible pay structures tailored to individual companies. Working groups in some industrial sectors will also discuss new forms of pay systems.

Working time

Issues other than pay did not play a major role in the 1999 round, although negotiating parties in some sectors, such as metalworking, agreed on an unlimited prolongation of a working time flexibility model dating from 1997 (AT9911204N).

Equal opportunities

Equal opportunity measures were not a prime target of the 1999 bargaining round, though the "distribution option" (see above under "Pay") offers companies the possibility of awarding increased payments to targeted employee groups such as female or younger workers.

Job security

Measures promoting job security were not included explicitly in collective agreements, but might be regarded as a basic element of all bargaining rounds in that wage demands were moderated in order to preserve employment, as has been the traditional approach for decades. Additionally, most employment measures are initiated through the federal government's National Action Plan (see below).

Training and skills development

Negotiators in several sectors established working groups to examine industry-related training, with the aim of improving employee qualifications.

Legislative developments

There were no major legislative development in 1999, notably due to the fact that a number of major legislative initiatives had been taken in a variety of areas in recent years, and due to the fact that the term of the SPÖ/ÖVP coalition government was coming to an end.

However, there was a lively debate within the trade union movement concerning areas of legislative change which it would like to see enacted. The key policy demands of the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB), which were set out at its federal congress held in October 1999 (see below under "The organisation and role of the social partners") are: harmonisation of the status of blue- and white-collar workers (AT9910202N); and the general introduction of a 35-hour working week (AT9911204N). ÖGB would also like to see amendments to legislation covering "atypical" forms of employment, focusing on a redefinition of employment and an extension of security provisions, in order to close some of the existing loopholes in labour regulation.

The organisation and role of the social partners

In October 1999, ÖGB held its 14th federal congress, at which new policy goals were formulated and the steering committee was re-elected (AT9911205F).

ÖGB membership stood at 1,480,000 by the end of 1998, representing a decline of 1.2% over the year. However, the decline was smaller than in previous years (AT9812122F), and membership among young people has increased after years of decline. In response, ÖGB intends to improve the quality of membership services. Furthermore, a number of unions intensified cooperation in 1999, a development which might result in mergers of affiliates with neighbouring domains. As in recent years, closer cooperation between affiliates has mainly been discussed within the context of declining membership.

In October 1999, a cooperation agreement between the Union of Salaried Employees (Gewerkschaft der Privatangestellten, GPA), the Postal and Telegraph Workers' Union (Post- und Fernmeldegewerkschaft, GPF), the Union of Arts, Media and Professional Personnel (Gewerkschaft Kunst, Medien, freie Berufe, KMfB) and the Union of Printing and Paper (Gewerkschaft Druck und Papier, DUP) was signed in response to the difficult situation of these unions in newly established sectors. The prime objective of the agreement is to strengthen union presence in those parts of service sectors characterised by low union density, such as the information technology sector, telecommunications and data-processing. This includes concerted recruitment efforts.

The telecommunications sector itself has experienced some substantial changes in collective bargaining in the course of privatisation and liberalisation. Until 1998, pay and working conditions were negotiated between state authorities and GPF. However, the shift of the employers from the public to the private domain meant that the sector fell under the umbrella of the Chamber of the Economy (Wirtschaftskammer Österreichs, WKÖ), whose Federal Organisation of General Transport Activities (Allgemeiner Fachverband des Verkehrs, AFV) now represents the sector's interests. On the trade union side, there has been increased competition with regard to representation. The Union of Commerce and Transport (Gewerkschaft Handel, Transport, Verkehr, GHTV) claimed responsibility on the ground that that sector is part of the larger field of transport, but failed. The more powerful GPA successfully tried to establish itself in this sector, since its domain formally covers all white-collar employees in the private sector, to which the postal service and telecommunications have shifted. GPF and GPA have adopted a pragmatic approach of cooperation in order to cope with demarcation problems in the telecommunications sector, as their joint bargaining activities have underscored.

Industrial action

No strikes took place in 1999, in keeping with the trend experienced during 1998 (AT9908164N). Although a number of staff meetings (a common means of staging warning strikes) took place in 1999, these forms of industrial action are not covered by official statistics.

In December 1999, railway worker protests took place at several locations, primarily using staff meetings to underscore wage claims in the bargaining round. However, a conclusion was reached on the same day.

National Action Plan (NAP) for employment

The drawing up of the Austrian 1999 National Action Plan (NAP) for employment (AT9908161F), in response to the EU Employment Guidelines, followed the long-established tradition of decision-making in Austria, under which the social partners are included in all areas of economic and social policy. Four key actors hold the status of social partner in this context:ÖGB, the Federal Chamber of Labour (Bundesarbeitskammer, BAK), WKÖ and the Federation of Austrian Industry (Industriellenvereinigung, IV). Concerning the NAP, these organisations were not only involved in discussion of those guidelines that explicitly call for their participation, but were also incorporated in discussions regarding all aspects of the NAP. The ministries of economic (Bundesministerium für wirtschaftliche Angelegenheiten, BMWA) and social affairs (Bundesministerium für Arbeit, Gesundheit und Soziales, BMAGS) first contacted the social partners in mid-March 1999, after they had drafted a revised version of the 1998 NAP. The following tripartite meeting set out the basic schedule for further work. The relevant ministries elaborated drafts on the basis of the talks in the first meeting, where the institutions had the opportunity to present their positions on the 1999 NAP. In the course of the following steps of the decision-making process, the social partners were permitted to comment on the ministries' drafts in writing. Additionally, social partners are also represented in the governing board of the Public Employment Service (Arbeitsmarktservice, AMS) and in its directorates in the federal states (Länder), which implement most of the NAP projects.

The impact of EMU on collective bargaining and industrial relations

Austrian membership of EMU has not engendered explicit changes with regard to collective bargaining and industrial relations. Austria's social partners have a long tradition of aligning their policies with economic requirements. Maintaining the competitiveness of the Austrian economy and avoiding wage-induced inflation have been important goals which have guided and will continue to guide bargaining policy in Austria.

Employee representation

Developments in employee representation in 1999 mainly related to EU initiatives. By the end of 1999, European Works Councils (EWC s) had been established in 15 multinational companies based in in Austria. It is thought that a total of 40 Austrian-owned multinationals are currently subject to the Directive.

Only one EWC was established during 1999 - in the construction company Porr AG. In the EWCs field, unions face two main tasks: consolidating EWCs already established; and setting up new EWCs. Unions experience a specific number of difficulties in establishing EWCs, such as coordination problems with foreign unions or opposing management strategies. Negotiations which are currently underway or forthcoming might be difficult, as the management of the more cooperative companies have already agreed their EWC before September 1996 under Article 13 of the Directive.

In terms of amendments to the current text of the EWCs Directive, ÖGB is demanding the extension of the Directive to workforces from central and eastern European countries, arguing that many Austrian firms are present in these countries. In addition, ÖGB wants the Directive to facilitate the establishment of EWCs in smaller international companies. The Austrian economy is dominated by small and medium-sized enterprises (SMEs), which are not covered by current EU legislation. Further, ÖGB would like to see some aspects of the information and consultation process improved.

ÖGB is also demanding the introduction of common EU-wide standards regarding information and consultation, as contained in the European Commission's proposal for a Directive establishing a general framework for informing and consulting employees in the European Community, issued in November 1998.

New forms of work

New forms of work have grown constantly over the past few decades in Austria, but their incidence is still below the European average. Part-time work has expanded mainly due to changes in demand for labour, such as prolonged opening hours. This form of work is more common in the service sector that than in industry, and is primarily performed by women. During the 1980s and 1990s the number of "minimally employed persons" (geringfügig Beschäftigte), ie those who work very few hours, has also steadily increased. In 1998, social insurance contributions were introduced for employers of minimally employed persons, who, until then, had no compulsory social insurance if their earnings were below a certain threshold. However, this introduction of contributions slowed growth rates of this type of employment only temporarily.

The number of employees leased by temporary employment agencies is still comparatively low in Austria, but has risen, in line with other "atypical" forms of employment. Temporary agency workers are primarily engaged in industrial branches, where the majority are male blue-collar workers.

The phenomenon of "dependently self-employed" persons is another recent development. These are people who are self-employed without employing other persons, often work for one client and whose working situation resembles very that of dependent employees. Collective agreements and various protection laws do not apply to these people and employers using them are able to take advantage of lower labour costs. These self-employed people are a relatively heterogeneous group, comprising both highly qualified persons with a high income and low-skilled, low-paid workers.

In general, unions clearly oppose many of these "atypical" forms of employment (see above, under "Legislative developments"). Nevertheless, unions have begun to include some groups, such as part-time workers or minimally employed persons, in the collective bargaining process in recent years. However, many more remain outside collective bargaining and therefore face lower or non-existent employment protection and employee rights.

These "atypical" forms of work are likely to become an increasing factor in union policies, since this type of employment will continue to grow and is especially present in the service sector, which appears to be the only growth sector in the economy. Recent surveys suggest that many new jobs created in the course of the NAP in Austria are "atypical", especially part-time, jobs.

Outlook

The first few months in office for the new ÖVP/FPÖ government will be crucial, not only in terms of Austria's political system and its international relations, but also in terms of employment and industrial relations. The new government is expected to draw up policy proposals in the area of social and employment policy in the early months of 2000 (AT0002212F). This change of government is likely to have profound implications for the social partners, as their role encompasses participation in public policy. As a consequence, changes in government composition may affect the influence of the social partners on public policy.