Government proposes amendments to labour constitution

The Austrian government is seeking to amend the Labour Constitution Act, the central law that governs much of the country's industrial relations. Most of the proposed amendments, published in January 1999, are matters of detail, but employers are nevertheless fundamentally opposed on grounds of increased cost.

In January 1999, the Austrian Federal Ministry of Labour, Health and Welfare (Bundesministerium für Arbeit, Gesundheit und Soziales, BMAGS) proposed a series of amendments to the country's Labour Constitution Act (Arbeitsverfassungsgesetz, ArbVG). They partly reflect a set of 25 demands tabled a year previously by trade unions (AT9805189N) and partly seek to remove the remaining differences between "wages" and "salaries" in law (AT9801160N). However, this latter proposal has been dealt with as a proposed separate item of legislation, the completely new Labour Contracts Act (Arbeitsverhältnisgesetz, AVHG).

Proposed changes

The proposed amendments to the Labour Constitution Act aim to adapt the law to structural change and technological developments in employment. To this end they include:

• a right for collective agreements to permit works agreements (between employers and works councils) on telework, working time and pay systems. This already applies with respect to works agreements on "bandwidth" working time models (AT9702102F) and "distribution options" for pay increases (AT9902132N);

• provisions to protect the information and co-determination rights of employees and works councils in company conglomerates, the subsidiaries of which are formally independent although they are themselves centrally managed;

• less stringent requirements for wage earners and salary earners to form a joint works council;

• a right for employees to stand for election to a works council regardless of nationality (AT9802168N) and regardless of whether an employee has the right to vote in national elections or not;

• improved rights of access for works councils to information on company statutes, the formal status of employees, measures regarding quality and waste management, any subsidies of the company and the future plans of management;

• new co-determination rights for works councils on quality and waste management and on the introduction of systems capable of combining employee data from various intra-company sources;

• more specific co-determination rights over systems controlling access to premises, telephone systems, and performance- and behaviour-monitoring systems;

• a right for the works council or the employer to negotiate a works agreement on telework (in the same way that they may already over the employment of temporary agency workers);

• the opportunity to conclude works agreements on performance-based wage systems;

• mandatory information to the works council about all the mandatory job descriptions handed to new recruits;

• the extension of the right to challenge a dismissal in court to employees whose dismissal may be linked to their legal duties as spokesperson on waste, faults or radiation protection;

• the lengthening of the period during which a dismissal may be challenged in court from one to two weeks in a bid to allow more time for disputes to be settled out of court; and

• up to one week of paid time off for any member of a works council to participate in trade union meetings required to gather information about or prepare for negotiations on collective agreements applicable to the company.

The proposed Labour Contracts Act is simultaneously being negotiated "behind closed doors" (AT9903138N).

Social partners react

Both main employers' organisations - the Austrian Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ) and the Federation of Austrian Industry (Vereinigung österreichischer Industrieller, VÖI) - have declined to debate individual amendments and have instead merely rejected the entire proposal. However, this followed detailed internal discussions of all the suggested amendments. From these it emerged that only the right of third-country nationals to stand for election to works council would have found favour, at least in a slightly watered-down version. But the rejection is fundamentally one of principle in relation to which agreement in detail would have seemed irrelevant. Both organisations gave exactly the same reasons: the new regulations would raise the cost of employment and add to the burden of administration. A willingness on the part of employers to discuss amendments should be assumed, they both stated, only if there were a willingness on the part of labour to concede reductions in total wage costs.

Statements by the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) and the Federal Chamber of Labour (Bundesarbeitskammer, BAK) had not been finalised at the time of writing, although the deadline for contributions had already passed. The right for third-country nationals to stand for election to works councils remains a controversial point within the unions. It engendered heated debate in internal committee meetings when the text of the proposed legislation was released. All other points were welcomed, and debate centred solely on whether the wording would in practice have the consequences desired by the trade unions.

Commentary

Given the employer organisations' hard-nosed stance, it is unlikely that any of the proposed changes will be enacted before the general elections due in October 1999.

The internal debate in the trade unions shows that the right for third-country nationals to stand for election to works councils is not generally accepted. Some unions, especially the Construction and Timber Trade Union (Gewerkschaft Bau-Holz, GBH) and the Union of Metal, Mining, and Energy Workers (Gewerkschaft Metall-Bergbau-Energie, GMBE), are willing to allow third-country candidates if they have been employed for at least five of the last eight years or have grown up mostly in Austria. However, they are not willing to grant the right across the board, in line with resolutions passed at the ÖGB congresses in 1991 and 1995. The WKÖ, for the first time, is also willing to contemplate third-country candidates under the same conditions as those proposed by the more restrictive trade unions. Roughly three-quarters of third-country employees would benefit.

The central importance of the works council in the proposed new provisions should be noted. On the one hand this is a means of decentralising some of the decisions that used to be the prerogative of the sectoral social partners, whilst on the other it serves to enhance the participation of the works council in company decision making. At the same time, it emphasises the central place that the works council enjoys in social partner and ministerial thinking. Companies without a works council, or their employees, are falling further and further behind the standards prevalent in companies that do have a works council. At the same time the law provides for works councils to be increasingly inundated with paper as they come to duplicate the work of management. This may drive deeper the wedge sometimes observed between works councils and employees.

The proposals are typical of the drift of Austrian labour legislation that remains highly prescriptive. The average employee or manager arguably stands next to no chance of being aware of all the different provisions affecting their rights and obligations. It is increasingly difficult to argue that they are all necessary - that is, to anybody's benefit. (August Gächter, IHS)