Moves towards greater working time flexibility

Austria's social partners have been involved in protracted negotiations in recent months in an attempt to meet the need for greater flexibility of working time, without increasing costs to companies. The first concrete result is a collective agreement covering 5% of all employees, which foreshadows both further collective agreements and a revision of the current Working Time Law.

The central social partners - the Austrian Trade Union Confederation (Österreichischer Gewerkschaftsbund,ÖGB) and the Austrian Chamber of Commerce (Wirtschaftskammer Österreich, WKÖ), the statutory body grouping almost all nonagricultural enterprises - have for some time been discussing a range of changes to the 1969 Working Time Law (Arbeitszeitgesetz, AZG). The aim is to maintain competitiveness and employment by making possible a more uneven distribution of working hours over time, without financial penalty to the employer. This is expected to lead to higher productivity, better use of plant, lower inventories, and a capability to respond more swiftly to variations in demand. The trade unions also hope to achieve a reduction of hours worked by individual employees in favour of more employment.

Proposed changes to the Working Time Law

The social partners' aims are basically to be achieved by redefining the limits of what the law calls "normal hours", as opposed to "surplus time" and overtime - in other words, "flexibilisation" - and by substituting time off in lieu for overtime payments. Statutory "normal time" is currently set at 40 hours per week, but collective agreements provide for shorter weekly hours, and average agreed normal time stands at 38.5 hours. The difference between agreed normal hours and the statutory 40 hours is called "surplus time" and does not attract an overtime premium payment. Overtime starts only after the completion of the 40th hour of the week or the eighth hour of the day. The premium is generally 50% and is paid either in money or in equivalent time off. The social partners have proposed significant changes to the Working Time Law to Parliament:

  • normal time can be increased to up to 48 hours per week, but over a period of 52 weeks the weekly average must not exceed 38.5 hours. The reference period can exceed 52 weeks, if compensatory time off is taken in blocks of several weeks;
  • normal time can be increased to up to 50 hours per week, if it averages out at 38.5 hours over a period of eight weeks;
  • normal time can be increased to 10 hours per day, if the weekly working hours are worked on only four consecutive days of the week, or if over a period of 52 weeks the compensatory time off is taken in blocks of several days, or if over a period of more than 52 weeks compensatory time is taken in blocks of several weeks;
  • if all weekly working hours are performed on four consecutive days, total daily working time including overtime can run to 12 hours;
  • the overtime premium remains 50%, but the wording of the law will put more emphasis on the possibility of compensating for overtime with time off rather than money;
  • in principle, individual employees become party to decisions on working time; and
  • on-call duty is limited to 10 days per month.

In all cases, a collective agreement will be necessary to put these wider limits for normal working time into effect. For establishments not covered by a national collective agreement, the law sets a strict rule of eight hours per day and 40 hours per week, with any excess hours to attract a premium of 50%.

It is expected that these legal changes will mean that workers lose some income from overtime payments. According to a 1996 estimate by the Chamber of Labour (Arbeiterkammer, AK), overtime bonuses make up about 1% of aggregate national employee income. It will be up to collective agreements to determine how much of this amount is lost in practice.

The social partners reached an agreement on the main substantial points of the proposed working time reform in November 1996. However, at this stage the two sides differed on the level at which specific agreements on working time should be made. The employers wanted more leeway for agreements at the level of the plant and the individual employee and employer, while the trade unions were strongly opposed, favouring the national sectoral level. This conflict meant that two separate bills amending the AZG were introduced in Parliament (the employers' view being supported by the conservative ÖVP and the unions' by the social democratic SPÖ). The dispute also carried over into the negotiations for a collective agreement on working time covering industrial establishments in the metalworking sector. It was in the mediation process in the dispute over this agreement that a central deal was reached on the AZG amendments in February 1997 - see below. With the social partners in agreement on the proposed amendments, the reform of the AZG was due to come before the parliamentary social affairs committee in early March. The committee will in all probability recommend the amendments to Parliament, and they are thus very likely to be adopted without any significant changes. Employment legislation in Austria is invariably based on agreement between the social partners.

Bargaining for metalworking industrial establishments

Collective agreements in Austria are concluded separately for industrial and for craft establishments. The metalworking industrial agreement is the annual "lead" settlement, setting a benchmark for all others. This year it will cover 254,000 employees of whom 162,000 are in waged and 92,000 in salaried positions - 51% of total industrial employment and 8% of total Austrian employment.

When negotiations started over a new deal in December 1996, the collective agreement in force set 38.5 hours as normal weekly working time. The Metals, Mining and Energy Trade Union (Gewerkschaft Metall Bergbau Energie, GMBE) and the Trade Union of Salaried Employees (Gewerkschaft der Privatangestellten, GPA), suggested the following model:

  • time between 38.5 and 45 hours per week should be defined as surplus hours;
  • for hours exceeding 41.5 a week, a time-off premium of 20% - 12 minutes per hour - should be granted;
  • for the 44th and 45th weekly hour a time-off premium of 30% - 18 minutes per hour - should be granted;
  • over a period of 52 weeks the average number of hours worked per week must not exceed 38.5;
  • surplus hours should be compensated by blocks of free time, especially adjacent to weekends or holidays;
  • excessive surplus hours remaining at the end of the 52-week reference period should be compensated in cash;
  • any hours exceeding 45 in one week should carry a 50% pay premium - ie a normal overtime rate; and
  • the agreement should act as a minimum standard for all enterprises covered.

The WKÖ and the Austrian Federation of Industry (Vereinigung Österreichischer Industrieller, VÖI), the voluntary grouping of industrial employers, did not think the unions' proposal reflected employers' needs sufficiently. They objected to the size of the time bonuses, and they wanted a collective agreement which would essentially leave the precise rules of working time flexibility to plant-level negotiations. For the employers, it was important to reach an agreement that would place on a legal footing all the informal and formal agreements that have been made at plant level over recent years. The secretary general of the WKÖ was quoted in the Kurier newspaper as estimating that unlawful working time practices could be found in between one-third and one-half of all establishments. At the same time, the president of GMBE insisted in an article in the Arbeit & Wirtschaft magazine that existing legal options for working time flexibility remained underused. As neither side felt able to compromise, the negotiations became deadlocked at the end of January 1997.

Arbitration procedures for collective bargaining

The deadlock in the conflict over the metalworking industrial collective agreement threatened to derail the effort to amend the Working Time Law. The negotiations were therefore suspended. After threats from the Government to impose collective agreements, the top leadership of the WKÖand the ÖGB stepped in. As well as resolving their dispute over the legislative amendments - see above - the presidents of the two organisations agreed to introduce an arbitration procedure which should resolve future bargaining impasses over working time.

It has been agreed to set up an arbitration panel of four persons, two each to be appointed by the trade unions and the employers. The panel's members must be eminent persons and must not have been involved in the negotiations that led to the impasse. The panel can be convened only in cases where a collective agreement is still in force and where the issue is working time. If the panel cannot agree unanimously within four weeks, or if the solution they suggest is not accepted by the parties to the collective agreement, the latter will appoint unanimously a fifth panel member. The panel then has another six weeks to come to a conclusion. If, after a further six weeks, the parties to the collective agreement have not implemented the panel's solution, the top-level social partners will conclude a collective agreement empowering agreements at plant or individual level to implement the panel's proposals.

Collective agreement for metalworking craft producers

A collective agreement on working time covering some 150,000 employees in craft enterprises in the metalworking sector (which includes, for example, water, electrical and heating installation) was signed on 13 February 1997 and made public after the central arbitration agreement. Normal working time in this sector is 38.5 hours per week, with the next 1.5 hours a week counted as surplus time which does not attract a premium. The main points of the agreement - which runs from 1 March 1997 to 31 December 1998 - are as follows:

  • overtime between the 41st and the 45th weekly hour no longer attracts a 50% premium, to be taken either in pay or time off, but a 25% premium to be taken in time off;
  • the time off in lieu for overtime must be granted in full working days, unless there is less than one day to take;
  • over a period of 52 weeks, average hours worked per week must not exceed 38.5;
  • saved-up surplus time and overtime must not exceed 80 hours, unless the distribution of normal working time over the whole 52-week period is known in advance (as might be the case in seasonal employment), when it can be unlimited;
  • if averaged out to 38.5 within a period of nine weeks, hours per week can run to 48 without bonus (instead of six weeks)
  • if an averaged of 38.5 hours is maintained over a period of eight weeks, up to 50 hours a week can be worked without any premium. The beginning of any such period has to be announced at least two weeks in advance;
  • if the working week is shortened to four days, working time can be extended to 10 hours per day without premium (otherwise nine hours). The day off during the week must not be a public holiday;
  • agreements on working time can, in principle, be made with individual workers. Where there is a works council, the council's consent is required. Agreement and consent must be in writing; and
  • workers are party to decisions on when to take compensatory time off for overtime.

The next collective agreements over working time flexibility are likely to cover hotels and restaurants, where negotiations began on 19 February, stone and ceramics industrial enterprises, where negotiations were scheduled to begin on 26 February, and metalworking industrial enterprises, with negotiations slated for 6 March

Commentary

The agreement on arbitration in working time disputes is not likely to have much direct effect. Its importance lies in the threat it poses and the embarrassment it might cause, if the social partners cannot conclude a national sectoral collective agreement. The changes likely to be enacted to the working time legislation could, however, have a noteworthy impact on a whole range of issues. Whether they do so or not depends on the extent to which imaginative use is made of the new regulations in collective agreements. It is likely that a few years' experience will be needed by the negotiators and the enterprises fully to develop the possibilities offered. These include cost reduction for enterprises, a fuller and more flexible use of plant, and a greater ability to remain within the law in coping with the demands of the market. There is also a possibility for some employment henceforth to appear less seasonal in the statistics, as workers will be consuming saved up time as time off during the slack season, and will nominally be employed while doing so. This should be expected to lead to savings for the unemployment insurance system, which is administered by the social partners. Further steps towards greater flexibility will no doubt depend on the degree to which the current innovations affect the level of employment and the lowest annual incomes. (August Gaechter, Institute for Advanced Studies)

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