Austria: Latest developments in working life Q3 2019

The final reforms launched by the interim government before the parliamentary elections and the first collective agreement for bicycle couriers are the main topics of interest in this article. This country update reports on the latest developments in working life in Austria in the third quarter of 2019.

Benefits for workers decided before elections

As reported in the previous quarter, an interim technocratic government consisting of civil servants was installed in June 2019, following the collapse of the previous coalition government. ^[1] On 19 and 25 September, the last two parliamentary sessions under the interim government were held. In those sessions, several reforms were approved via the so-called 'free play of forces' rule, where majorities can include those with different party affiliations. The reforms are due to be implemented in 2020 and several will directly benefit employees.

Pensions: Employees will be able to retire without any deductions after they have completed 45 years of fully insured employment (i.e. subject to social security contributions). This includes the long-time insured from 62 years of age onwards (who previously had deductions of up to 12.6% if they retired before the male statutory retirement age of 65), heavy labour pensioners from 60 years of age onwards (who had annual deductions of 1.8% for up to five years) and invalidity pensioners from 60 years of age onwards (who had deductions of 4.2% per year, up to a maximum of 13.8%). ^[2]

Care-related leave: Employees who have relatives with long-term care needs will have the legal right to two weeks leave of absence per year. During these two weeks, the employees can arrange nursing care leave or part-time work for care reasons (for up to three months). This is dependent on the employer's consent and if no agreement is reached, the employees are entitled to two further weeks of absence. This reform is applicable in companies with more than five employees.

Older unemployed: Additional budget will be made available for active labour market policies that target long-term unemployed people of 50 years or older. The budget will be €50 million per year in 2020 and 2021.

Tax reform: There will be a reduction in social security contributions for employees, pensioners, self-employed people and those working in agriculture and forestry. For the latter group, the health insurance contribution will be reduced by 0.85%. Those with lower incomes (up to about €22,600 per year) will receive financial relief of up to €300 a year, while pensioners with low pensions (i.e. around €1,100) will receive around €200 per year.

These reforms, along with those that were announced in July 2019, will amount to around €5 billion per year, according to Finance Minister Eduard Müller. He warned that the EU, as well as rating agencies, would monitor the reforms closely and called on the parliamentarians to exercise vigilance, particularly as Austria’s future economic growth is predicted to slow down.

• Austrian parliament: Nationalrat beschließt zusätzliche Mittel für Arbeitslose über 50
• Austrian parliament: Nationalrat billigt ÖVP–FPÖ–Steuerreform und Pensionserhöhung

World’s first collective agreement for bicycle couriers

The first collective agreement for bicycle couriers worldwide was finalised on 17 September by the Austrian social partners (trade union vida and the Austrian Federal Economic Chamber's (WKO) sectoral association for freight transport). It applies to couriers delivering goods like food, letters or packages by bicycle. ^[3]

The collective agreement includes:

• a basic minimum wage of €1,506 per month, paid 14 times a year (12 regular monthly payments and 2 extra payments for holiday pay and a Christmas bonus)
• normal weekly working hours of 40 hours and the option of a four-day working week
• an equipment allowance of €0.14 per kilometre for the use of privately owned bicycles and smartphones

The collective agreement will come into force on 1 January 2020. According to vida, there are currently several thousand bicycle couriers working in Austria and many of them are in precarious employment relationships (i.e. self-employed or freelance contractors). It remains to be seen how many of them will become dependently employed and therefore covered by this new collective agreement.

Both social partners expressed their contentment with the agreement and stated that it will provide for fair competition and social security for the workers in the sector. Roman Hebenstreit, Chair of vida, remarked that ‘a huge step against bogus self-employment’ had been taken. Günther Reder, the WKO freight transport chairman, was pleased that ‘the strength of the functioning social partnership could be shown’. ^[4]

Metalworking industry leads autumn collective bargaining

On 23 September, the Union of Private Sector Employees, Printing, Journalism and Paper (GPA-djp) and the Production Union (PRO-GE) submitted their demands to the employers in the metalworking industry. They asked for a wage increase of 4.5%, arguing that such a high demand was justified by the economic outcomes in the sector.^[5]

In the course of the next quarter, negotiations in the sector will continue. Usually, the outcomes in the metalworking sector are somewhat higher than in other sectors due to the relative strength and organisational ability of the unions.

Outlook

General elections were held on 29 September and saw wins for the conservative People's Party (ÖVP) (increasing from 31.5% to 37.5%) and significant losses for their former coalition partner, the right-wing populist Freedom Party (FPÖ) (decreasing from 26% to 16.2%). In the coming weeks, talks between the ÖVP and potential coalition partners (the FPÖ, the Social Democratic Party of Austria (SPÖ) and the Green Party) will be held. The composition of the government will have a large impact on the direction of working life policies. The previous government was considered ‘industry friendly’ and during its legislative period, the social partners – whose role in Austria has been traditionally important – were somewhat sidelined.