Unions seek further harmonisation of labour law

In 1998, Austria's trade unions are setting out to achieve legal equality between wage earners/blue-collar workers and salary earners/white-collar workers. The two outstanding issues are notice of dismissal and payment during periods of sickness. Estimates of the cost of harmonisation vary by a factor of 10, and the negotiations are likely to be arduous.

The Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) has launched a campaign in 1998 to make good on one of its long-standing demands: the removal of the remaining legal differences between wage earners/blue-collar workers (Arbeiter) and salary earners/white-collar workers (Angestellten). In the late 1970s, equality in holiday regulations and severance pay was achieved. Now ÖGB wants regulations concerning wage earners' payment during sickness and dismissal notice periods to be brought up to salary earner standards. The ÖGB sees this as the final phase of a historical social policy project. The Austrian Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ) has made it clear it opposes any measure that would increase total wage costs, this being one of the hottest issues between social partners at national level. By the WKÖ's reckoning, upward equalisation would cost ATS 10 billion per year, while the ÖGB estimates the net cost to be about ATS 1 billion per year. There are 1.3 million wage earners on annual average, about 43% of total employment.

Currently, in the event of sickness, wages have to be paid to blue-collar workers for four weeks, after at least two weeks of previous employment. After five years of employment they have to be paid for six weeks, after 15 years for eight weeks, and after 25 years for 10 weeks. For white-collar workers, salaries have to be paid in full for six weeks and at 50% for another four weeks in the event of sickness during the first five years of employment. After five years, the entitlement is for eight plus four weeks, after 15 years for 10 plus four, and after 25 years for 12 plus four. The average duration of sickness per case is 13 days among salary earners and 19 days among wage earners. This is reflected in the higher sickness insurance contributions to be paid for wage earners. They are 7.9% of total labour cost in the case of wages but only 6.8% in the case of salaries. The ÖGB is suggesting the universal application of the lower rate, which would cost the insurance system about ATS 800 million annually.

Employers' must give salary earners at least six weeks' advance notice of termination of their employment contract. After two years of employment, the notice period rises to at least two months, after five years to three months, after 15 years to four months and after 25 years to five months. For wage workers the law sets a minimum notice period of two weeks but allows collective agreements to deviate from the norm. A bricklayer, for instance, even after 10 years of employment has a dismissal period of only one week. The WKÖ thinks that harmonisation with salary earners in this respect alone could cost as much as ATS 4.5 billion annually, while the ÖGB maintains that dismissals of wage earners are as foreseeable as those of salary earners, so no additional cost would accrue.

Negotiations on these issues can be expected to be difficult. It is next to inconceivable that salary earners will be asked to give up any of their entitlements. At the same time it is inconceivable to raise labour costs any further, especially since the current Government, upon its inauguration in late 1996, made a pledge not to do so. A way out might be to cut costs in seemingly unrelated areas of social and labour law. Doing so would, however, carry the risk of getting mired in a multitude of small conflicts.

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