Austria: Latest working life developments – Q4 2017

The general elections and the new federal government, major reforms planned in social and labour market policy, and wage increases of up to 3% are the main topics of interest in this article. This country update reports on the latest developments in working life in Austria in the fourth quarter of 2017.

Formation of new federal government after general elections

General elections were held on 15 October 2017 after the resignation of the country’s Vice Chancellor, Reinhold Mitterlehner, in May and the subsequent rift between the (former) ruling Social Democratic Party (SPÖ) and the conservative Austrian People’s Party (ÖVP). The ÖVP won the majority of electoral votes with 31.5%, the SPÖ second with 26.9%, and the far-right Freedom Party (FPÖ) third with 26.5%. This netted the ÖVP and FPÖ a combined total of 114 of the 183 parliamentary seats. The parties then began coalition negotiations and presented their agreement on 15 December.

Sebastian Kurz of the ÖVP was inaugurated as the Federal Chancellor, with Heinz-Christian Strache of the FPÖ as Vice Chancellor. In total, the ÖVP fields eight federal ministers, with the FPÖ six. There has been strong criticism that FPÖ ministers head both the interior ministry (in charge of the police) and the defence ministry (in charge of the armed forces), as well as the fact that many FPÖ politicians have close connections to right-wing extremists.

Social and labour market policy reforms

The right-wing liberal government programme for the next legislative period was presented, which foresees major changes in the fields of labour and social policy.

• A daily maximum working time of 12 hours up to 5 times a week is to be generally allowed (thus allowing for a 60-hour working week), to be negotiated at the company level with the works council (thus putting employees in companies without a works council at a disadvantage, as they will have to negotiate individually).
• Exemptions are to be allowed from the weekend and holiday rest periods (reducing rest periods in the tourism sector to eight hours). These will also be negotiated at company level.
• ‘Reasonableness’ criteria (regarding commuting times, occupational protection, income protection) for the unemployed to accept a job offer are to be tightened.
• There are plans for cuts in unemployment benefits and social benefits and in access to social welfare.
• The ban on smoking in restaurants (which would have come into force in May 2018) is expected to be repealed (affecting tourism workers).
• The young workers’ council, a specific company representation structure for young workers (and apprentices) is to be abolished, with the age limit for works council candidates to be reduced to 16 years (from 18).

The statutory representative bodies, for which membership is obligatory – essentially, the Federal Economic Chamber (WKO), the Federal Chamber of Labour (AK) and the Chamber of Agriculture (LKO) – have been asked to present the government with reform programmes showing concrete efficiency gains and financial relief measures for their members until mid-2018. The government will have the option to present statutory measures if the planned reforms are not considered sufficient (potentially cutting membership fees, thus reducing the chambers’ budgets).

Overall, the social partners’ reactions to the government’s programme are divided. The WKO says it contains some much-need relief for companies and SMEs, with the Federation of Austrian Industry (IV) stating that it contains key and quite courageous steps for better framework conditions for employees and companies. However, the AK criticised the programme for its ‘retro politics’ and the Austrian Trade Union Federation (ÖGB) questioned how it would be funded.

Autumn collective bargaining rounds

The annual wage bargaining rounds traditionally begin in the influential metal industry sector. For the fifth year in a row they were split according to the six subsectors and, again, identical outcomes were obtained for the 186,000 sectoral employees. Negotiations were controversial and an agreement was reached only after works council conferences, works meetings and the preventative decision for industrial action. Finally, an increase of actual and minimum wages of 3% was reached; with the inflation rate lying at 1.9 %, this brings about net increases for the employees. The new minimum wage in the metal industry is now €1,848.08. Improvements in framework conditions were also reached.

Wage agreements in other sectors followed, but generally lie below the metal industry agreements:

• public sector (2.33%);
• retail sector (2.35%–2.60%);
• telecommunication workers (2.60%);
• bus drivers (2.65%);
• security guards and the freight transport sector (2.70%);
• facility management (2.75%);
• kindergarten assistants (3.00%).

Commentary

The newly formed government held a retreat in early January in which reform plans were fleshed out. The impact they will have on workers in Austria remains to be seen.