2001 Annual Review for Austria

This record reviews 2001's main developments in industrial relations in Austria.

Political developments

The present government is a coalition of the conservative People's Party (Österreichische Volkspartei, ÖVP) and populist Freedom Party (Freiheitliche Partei Österreichs, FPÖ), which came to office in February 2000 (AT0002212F). A local election in Austria's capital, Vienna, held on 25 March 2001, resulted in the most significant losses for the FPÖ since it came to government. Electoral support for the FPÖ fell by nearly 8 percentage points to 20.1%, a drop of more than one third. The Social Democratic Party (Sozialdemokratische Partei Österreichs, SPÖ) increased its vote by 7.7 points and was once again able to govern the capital alone: it lost its absolute majority in Vienna 10 years previously and had since formed coalition governments with the ÖVP. The outcome of the election was deemed crucial for the ÖVP/FPÖ coalition government at the federal level, as it was seen as expressing a growing opposition to the government's ongoing cutbacks in social security and welfare provision. Moreover, the government's 'austerity programme' and corresponding political initiatives provoked fierce criticism from the SPÖ and the Greens (Die Grünen, GRÜNE) as well as organised labour. Conflicts emerged, especially with the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) (see below under 'Industrial action').

Against a background of forecasts of poor economic performance - annual growth in real GDP is estimated by the Austrian Institute for Economic Research (Wirtschaftsforschungsinstitut, WIFO) to have reached only 1.3% in 2001 and to remain weak in the first quarter of 2002 - the government aims to reach a balanced ('zero deficit') budget in 2002. While public debt amounted to EUR 131.4 billion or 61.5% of GDP in 2001, statements on the anticipated net deficit for the year (as a percentage of GDP) varied from 0.0% (as stated by the Minister of Finance, Karl-Heinz Grasser), to 0.3% (predicted by WIFO). Since this would in any case remain below the EU's deficit target (1.5% of real GDP), the parliamentary opposition along with the employees' organisations fiercely criticised the government's strict adherence to the 'zero deficit'. Throughout the second half of 2001, they repeatedly called on the government to stimulate economic growth through 'anti-cyclical' demand management and active labour market policies in order to tackle the problem of rising unemployment rates (AT0108226F).

A small number of provincial elections will be held in 2002, but these will be of only minor political importance.

Collective bargaining

Collective bargaining in Austria is conducted principally at sectoral level, and more than 400 collective agreements are concluded each year. While the metalworking sector continued to play its traditional pattern-setting role in bargaining in 2001, the employers in metalworking's electrical and electronics subsector for the first time withdrew from joint negotiations and bargained separately (AT0110201N).


Overall, wage negotiations were overshadowed by the continuing conflict between the government and ÖGB (see below under 'Industrial action') as well as by the predicted further slowdown of the Austrian economy. Nevertheless, under the new metalworking agreement concluded in October 2001 (AT0111229N), minimum pay rates will increase by 3.0%, above the anticipated average inflation rate of 2.6% for 2001. Actual wages must be raised by 2.9% and by at least EUR 43.60 per month. These pay agreements are valid for both blue- and white-collar workers. Unlike in previous years, the new metalworking agreement did not include a 'distribution option' (Verteiloption), whereby part of the increase could be allocated flexibly in return for a greater total pay increase.

However, the social partners did agree on a 'distribution option' in the first-ever separately-negotiated agreement for the electrical and electronics subsector. The distribution option allows companies to distribute flexibly 0.5% of the pay bill among certain employee groups on the basis of a works agreement between management and the works council. This means that companies can choose either to raise total pay by 2.9%, or to increase total pay by at least 2.7% while distributing at least 0.5% in line with criteria of high performance. One of the goals of this distribution option is to raise low pay. The purchasing power of employees should also be taken into account.

Other important sectoral pay agreements signed in 2001 included that for the banking industry, where bargaining was marked by debates over wage flexibility. The agreement, concluded in January (AT0103210N), provided for pay to increase by a flat rate of EUR 6 per month plus 2.6%. This arrangement favoured employees with low incomes, implying a pay hike of 3.14% for new recruits and of 2.8% for top earners. On average, the agreement meant a pay rise of 2.91%. In addition, all employees received a one-off bonus of EUR 73.

Overall, the average collectively agreed pay increase in 2001 stood at 2.4%, compared with 2.1% in 2000.

Working time

The main working time issue dealt with in collective bargaining in 2001 related to part-time work for older workers. 2000 saw the introduction of new statutory provisions on this matter, allowing older employees to reduce their working time without damaging their entitlements concerning pension and severance pay. A collective agreement, a works agreement or an individual contract must be concluded in order for the scheme to be applied. Collective agreements on the issue were thus concluded in 2001 for a number of sectors (AT0110203F): the metalworking industry (white- and blue-collar employees); the chemicals industry (white- and blue-collar employees); the textiles industry (white- and blue-collar employees); the wood-processing industry (white- and blue-collar employees); the food-processing industry (white-collar employees); the leather industry (white-collar employees); the industrial manufacture of electrical and electronic equipment (white-collar employees); electricity supply (white-collar employees); airports (white-collar employees); the paper and pulp industry (blue-collar employees); and the oil industry (blue-collar employees).

Average collectively agreed normal weekly working hours stood at 38.5 in 2001, unchanged from the 2000 figure.

Pay inequalities

Despite a legislative framework designed to reduce the gender pay gap, pay differentials between men and women continue in Austria. A recent report on the income of the Austrian population carried out by the national statistical office, Statistik Österreich for 1998 und 1999 reveals that women's gross pay is around 60% of that of their male counterparts (AT0103209F). No specific bargaining on this issue was reported in 2001.

Job security

There were no significant developments in the area of bargaining on job security during 2001, although the economic climate worsened during the second half of the year.

Training and skills development

A number of sectoral collective agreements containing clauses on training and leave for training programmes were signed in 2001, notably for white-collar employees in telecommunications, blue-collar employees in the oil industry and blue-collar employees in the paper and pulp industry. The agreement for the paper and pulp industry stipulates that employees have the right to take fully paid leave of one week per year for participation in training programmes. This right refers only to programmes which are useful for both the employee's career and for the company's operations. In-service training has priority over programmes offered outside the company.

Legislative developments

The most controversial of the government's various social security measures during 2001 was a reform of the central institution of the social insurance system, the Association of Social Security Providers (Hauptverband der Sozialversicherungsträger, HSV), designed to change significantly the representational structure of this body (AT0108225N). This was the main trigger for major protests by ÖGB) (see below under 'Industrial action').

Previously, the members of the 'main conference' (Verbandskonferenz) of the HSV were recruited from representatives of organised labour and business, in accordance with the results of the elections of their representatives in the Chambers of Labour (Arbeiterkammern, AKs), representing workers, and the Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ) employers' organisation. The most recent Chamber of Labour elections in May 2000 brought overall gains for the candidates representing the Fraktion Sozialdemokratischer Gewerkschafter (FSG), which is affiliated to the opposition SPÖ, and the main loser was the Freiheitliche Arbeitnehmer (FA) grouping, affiliated to the populist FPÖ. Under the new system, HSV has a governing board (Verwaltungsrat), whose members are still recruited in line with the results of the Chamber elections. However, they now include at least one representative of the three most successful groupings in the elections. This means that the FPÖ-affiliated FA, despite being the main loser in the most recent Chamber of Labour elections, has one seat on the governing board.

In mid-2001, the government announced its intention to reform the severance pay system (AT0106220N). A dispute arose - which split the coalition partners - centring on the conditions under which entitlement to severance pay should be granted to employees. Against this background of controversy, the government decided to delegate the drafting of a new severance scheme to the social partners, and they reached an agreement in October that - if adopted by parliament - would abolish most current restrictions and make an additional 800,000 employees eligible for severance pay (AT0112231F). However, the cost implications of the measures were a matter of some dispute.

When Austria joined the European Economic Area in 1994, it still had in place a formal ban on night work for women. Since this legal regulation had been declared permissible only up to the end of 2001 , Austria was due to bring its national legislation into line with EU law during the year. This meant lifting the restrictions on night work for women. However, the relevant legislation (AT0107222F) had not been adopted by the end of the year.

Proposals further to liberalise legislation on shop opening hours proved controversial over the year (AT0107221N).

The organisation and role of the social partners

The ÖGB trade union confederation and the WKÖ employers' organisation both launched initiatives aimed at substantial reforms of their internal organisations in 2001.

In November 2001, the political leadership of WKÖ reached an agreement on reducing membership dues by a total of ATS 2.1 billion, which accounts for about 30% of total dues, by 2004 (AT0105215N). More than 75% of this amount was to be realised by the beginning of 2002. The reform plan provides for significant reductions in the Chamber's staff and thoroughgoing restructuring.

The issue of restructuring the representation of blue- and white-collar workers into single trade unions has permeated debates within ÖGB since its formation (AT9806192F). In February 2001, the ÖGB president, Fritz Verzetnitsch, presented a new plan for organisational reform of the unions (AT0104212N). Under this proposal - which was met with scepticism by some ÖGB affiliates - the current 13-union structure would be replaced with eight wider-ranging unions, mainly through mergers. Then, in October 2001, the most powerful affiliates of ÖGB, the white-collar Union of Salaried Employees (Gewerkschaft der Privatangestellten, GPA) and the blue-collar Metalworking and Textiles Union (Gewerkschaft Metall-Textil, GMT), announced that they intend to merge (AT0110205N). This amalgamation will significantly change overall union structure in Austria. It is not an exaggeration to say that the new union will become the 'centre of gravity' of ÖGB. This is not only because of the participating unions' large share of total union membership, but also because GPA and GMT have cooperated intensively in collective bargaining and have set the pace for bargaining by the other unions.

A great number of political initiatives proposed by the coalition government in 2001 met with harsh criticism, mainly from organised labour. The traditional 'corporatist' process of policy-making has been severely disrupted since the ÖVP-FPÖ coalition government took power, and political tensions between the government and ÖGB continually increased throughout the year (AT0109201F). This tended to undermine the traditional function of social partnership as a platform for 'interest clearing' and its ability to resolve socio-economic problems.

Industrial action

As noted above, since the formation of the ÖVP-FPÖ coalition government, the consensual atmosphere in Austria's public policy-making has been greatly disrupted. In July, the conflict between government and labour organisations appeared to peak when, for the first time in its history, ÖGB called upon its members nationwide to take part in demonstrations (AT0108225N). The issue was government legislation on reforming the structure of the central organisation of the public social insurance system (see above under 'Legislative developments').

When the government finally pushed through its policy of restructuring the HSV, ÖGB, fearing a further loss of influence in public-policy making, decided to hold a first-ever membership ballot with the aim of regaining its political power and legitimising further protest actions against government legislation. The result of the ballot - held between 24 September and 15 October - was seen as a success by labour representatives as well as the parliamentary opposition. More than 56.6% of union members cast their vote on seven political demands proposed by the ÖGB and the great majority supported the demands and agreed to provide ÖGB with a mandate to call a strike (AT0111201F). This was remarkable, since the frequency and scale of industrial disputes have until now been extraordinarily low in Austria (a trend which generally continued in 2001).

National Action Plan (NAP) for employment

The drawing up of Austria's 2001 National Action Plan (NAP) for employment followed the practice of previous years, whereby the social partners are involved in all areas of the NAP. Four key actors hold the status of a social partner in this context: ÖGB, the Federal Chamber of Labour (Bundesarbeitskammer, AK), WKÖ and the Federation of Austrian Industry (Vereinigung der Österreichischen Industrie, VÖI). The contribution of the social partners is based on voluntary participation. Given the close cooperation of the social partners in the institutions of labour market policy, cooperation also prevails when it comes to participating in the formulation of NAPs. In spite of the conflicts between the coalition government and organised labour (see above under 'Industrial action'), the climate of cooperation relating to the NAP has been maintained so far. However, as regards the extent of involvement in the process of drawing up and drafting the NAP, employees' representatives have expressed their dissatisfaction, while organised employers appear to be more satisfied with their involvement.

It is important to note that there are no formalised links between the NAP and the collective agreements negotiated by the social partners. This is because the NAP is fixed at the central level of public policy-making, whereas collective bargaining is conducted at the sectoral level, without central guidelines issued for the bargaining rounds by the central-level peak organisations of the unions and employers' organisations.

Company restructuring

The obligation of employers to inform employee representative bodies on planned restructuring measures is regulated in various sections of the Labour Constitution Act (Arbeitsverfassungsgesetz, ArbVG). As Austrian labour legislation already provides for far-reaching regulations on redundancy and severance arrangements (see §109(3) ArbVG) and information and consultation of workers in a restructuring situation (see §109(1) ArbVG), cases of company restructuring in 2001 did not lead to further attempts to tighten up the relevant legislation.

Employee participation

There were no legislative or other significant developments in the area of employee participation in Austria in 2001.

New forms of work

In Austria, an increasing proportion of employment can no longer be characterised as based on a 'standard' employment contract. Overall, approximately 30% of the total workforce is involved in 'atypical' employment relationships. The expansion of so-called atypical forms of work is mainly due to changes in demand for labour, such as prolonged opening hours in commerce. Hence, part-time work has grown constantly over the past years and already accounts for 17.4% of the total labour force. Since part-time work is more common in the service sector than in industry, it is primarily performed by women.

The spread of temporary agency work (Leiharbeit) has been rather limited so far, currently accounting for only 0.5% of the total workforce. Therefore, no collective agreement regulates temporary agency work as yet. However, as regards other new forms of work, in 1997, a collective agreement was concluded for the first time on teleworking (in the mineral oils industry - AT9707123F). Further, specific collective agreements for the information technology sector were negotiated in 2000 (AT0012235N) and 2001. The 2001 agreement covers 25,000 employees and deals with working time and flexibility.

Until recently, unions clearly opposed many new forms of atypical work. However, in the autumn of 2001 the white-collar GPA, Austria's largest trade union, launched an initiative, referred to as 'workflex', aimed at self-employed persons working under a free service contract or a work contract. In general, however, the public debate on atypical forms of work has been rather limited so far.


The Austrian economy is currently facing the consequences of the slowdown which took place during the second half of 2001 - employment growth is declining and unemployment levels rose sharply to 4.1% in November 2001. Moreover, for the first time since 1993, economists predict that employment levels will fall (by 0.2%). This challenge is likely to affect employment and labour relations very strongly in 2002. Since the government is determined not to adopt demand-side, anti-cyclical measures, despite requests from the opposition, the development of the labour market crucially depends on how active labour market policy can cope with the slowdown. However, it is clear that the target contained in Austria's NAP, set in 1997 by the former SPÖ-ÖVP coalition government, to decrease the unemployment rate from 4.5% in 1997 to 3.5% in 2002, will not be met - unemployment, which was 3.7% in 2000, is predicted to increase to 4.2% in 2002.

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