Austria: latest working life developments Q2 2018

Amendments to the Working Time Act, a streamlining of the social insurance system and the renewal of important collective agreements are the main topics of interest in this article. This country update reports on the latest developments in working life in Austria in the second quarter of 2018.

Amendment to Working Time Act

On 5 July 2018, after several weeks of serious and controversial public debates, parliament passed a far-reaching amendment to the Working Time Act, backed by the governing parties and the liberal New Austria and Liberal Forum (NEOS, part of the parliamentary opposition). The aim behind this legislative initiative, launched by the current coalition government of the conservative Austrian People’s Party (ÖVP) and the right-wing populist Freedom Party (FPÖ), was to adapt the country’s working time regime to the flexibility needs of its businesses.

At the heart of the amendment is the extension of maximum working hours. While normal working hours remain at a maximum of eight hours a day and 40 hours a week, the maximum has been extended from 10 to 12 hours a day and from 50 to 60 hours a week. The daily break regulations remain unchanged: a scheduled break of at least 30 minutes must be granted where daily working hours exceed six hours. The amendment also extends the maximum working day under flexitime arrangements to 12 hours.

Significantly, the total number of employers who will not be covered by the Working Time Act will rise, as this cohort includes managers as well as ‘employees with essentially autonomous decision-making powers’.

For hotel, restaurant and tourism workers, the bill allows for the reduction of the daily rest period from the current 11 hours to eight hours in the case of split shifts. By including a so-called voluntary clause in the amendment, meaning that employees may refuse to work overtime in excess of 10 hours a day, the government has attempted to attenuate the harsh criticism the bill has provoked. The parliamentary opposition of the Social Democratic Party (SPÖ) and Liste Pilz, as well as trade unions, have unilaterally rejected the amendment, with the latter organising a major rally against the new law on 30 June 2018, attended by tens of thousands of people.

Experts disagree about the effects the amendment will actually have on the different employment contracts (for example, those with ‘all-in clauses’) and about the impact on the future working life of Austria’s workforce in general, since many terms leave significant room for interpretation.

Social security reform and easing of administrative penal law

On 22 May 2018, the ÖVP-FPÖ government presented detailed plans for the streamlining of Austria’s social insurance system, at the core of which was the proposal to merge funding institutions in the areas of health, industrial injuries and pensions insurance: the number of such institutions would be reduced from 21 to 5. The aim is to save €1 billion on administrative costs by 2023, without negatively impacting on public health services. The government has announced it will retain the principle of self-administration, on which Austria’s social insurance system is based; however, it plans to change the composition of the administrative bodies by reducing the number of trade union representatives compared to employer organisation representatives.

On 16 May 2018, a draft ministerial bill was issued with the aim of relieving enterprises from the administrative penal law that sanctions breaches of labour law or violations of administrative norms. In particular, the bill intends to abolish the principle of accumulation, whereby labour law violations are penalised per worker affected.

Both initiatives have been welcomed by employer organisations, but have been sharply criticised by the Austrian Trade Union Federation (ÖGB) and the Chamber of Labour (AK).

Collective bargaining developments

The 2017–2018 bargaining round, which kicked off in autumn 2017, brought about a number of renewed collective agreements. The most important of these were the agreements in the chemical industry, covering around 45,000 workers, and the electrical and electronics industry, covering just under 50,000 workers. Both agreements were concluded in mid-April and both provide for a pay increase of 3.2% and 3.1% in terms of minimum and actual wages, respectively.

In the latter industry, within the existing free time option scheme (to be agreed upon via a company-level agreement), the employee can opt for a working time reduction of 5 hours and 10 minutes per month rather than a wage increase.

In the banking sector, the new wage agreement signed on 4 April 2018 provides for an average pay increase of 2.8% for around 75,000 banking employees.

Commentary

In the shadow of the dispute over the new working time regulation, the government’s request to the chambers – in particular, the Federal Economic Chamber (WKO) and the AK – to propose measures to make efficiency gains and reduce membership levies by the end of June 2018 has faded into the background. It remains to be seen whether and when the statutory representative bodies will present their reform programmes.

 
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