Austria: Latest working life developments – Q1 2017

New legislation regarding social and wage dumping, qualification and childcare benefits, the federal government’s work programme and an increase in members for the Austrian Trade Union Federation are the main topics of interest in this article. This country update reports on the latest developments in working life in Austria in the first quarter of 2017.

New regulations in 2017

An update of the law prohibiting social and wage dumping came into effect on 1 January. The new regulations now form a single law, transposing the Enforcement Directive (2014/67/EU). Cross-border administrative prosecutions (on the grounds of wage dumping and related matters) for employers posting workers to Austria will be accelerated, to facilitate the enforcement of penalties. In the construction sector, there is now a customer liability (for both private and public sector customers) in order to secure wage entitlements for posted employees. This enables posted workers to claim wage differences both from their (foreign) employer, and from their (Austrian) customer.

The term of office for works councils was extended from four to five years, which will affect all newly founded works councils from 1 January. Educational leave for works council representatives was extended by three days to three weeks and three days per term.

The qualified employees’ grant (Fachkräftestipendium), originally implemented in 2013, was reinstalled from 1 January (and will run until 31 December 2018) after it had been suspended for 2015 and 2016.

A reform of the Childcare Benefit Scheme (Kinderbetreuungsgeld) was implemented on 1 March, covering all births from that date. It introduces a month’s paid paternity leave (family time bonus) and an equality bonus of €1,000, if the leave is divided equally between the partners. There is also more flexibility in the flat-rate models. The previous four models are replaced by a childcare benefit account with a freely chosen runtime of between 12 and 28 months (15–35 months if both partners are on parental leave). The income-dependent variant (80% of the former income for 12 (14) months, with the upper threshold of €2,000) remains in place. 

Coalition presents new work programme

In January, Austria’s federal chancellor Christian Kern of the Social Democratic Party (SPÖ) presented the party’s new Plan A, which triggered negotiations between the SPÖ and its coalition junior partner, the conservative People’s Party (ÖVP). This resulted in an updated work programme for the federal government (PDF) for the remainder of the current legislative period (scheduled to last until 2018). Several proposals from Plan A have been incorporated in the work programme, including the creation of 20,000 jobs for unemployed people aged 50 or older.

The social partners have been asked to negotiate on two topics:

  • implementation of a minimum wage of €1,500 in all collective agreements (there is no statutory minimum wage in Austria)
  • flexibility of working hours (possibly allowing for 12-hour working days).

The social partners are to present an agreement by mid-2017; otherwise, the government will implement statutory regulations.

Union membership increases for first time since 1984

In March, the Austrian Trade Union Federation (ÖGB) published its membership statistics for 2016. For the first time since 1984, an increase (0.36%) in membership was recorded. The umbrella organisation now stands at 1,200,889 members (as of 31 December 2016). The increase in members can be attributed to a comparatively large membership gain (1.4%) of the Union of Public Employees (GÖD). Of the seven member unions of the ÖGB, only two recorded a loss of members.

Commentary

The social partner organisations welcomed the request by the federal government to negotiate on minimum wages and flexible working hours, and hope to achieve a good outcome by mid-2017.

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