2002 Annual Review for Austria

This record reviews 2002's main developments in industrial relations in Austria.

Political developments

In September 2002, after conflicts within the coalition government of the conservative People’s Party (Österreichische Volkspartei, ÖVP) and the populist Freedom Party (Freiheitliche Partei Österreichs, FPÖ) - which had come to office in February 2000 (AT0002212F) - the ÖVP leadership decided to resign from the coalition. The main reason for the ÖVP’s resignation was internal disagreements within the FPÖ, with important representatives of the party, including its former chair, Jörg Haider, opposing measures perceived as unpopular. Opinion polls had indicated a major fall in popularity for the FPÖ. For the ÖVP, a continuation of the coalition government seemed impossible because several FPÖ ministers had resigned from office.

As a consequence, a general election was held on 24 November 2002, at which the ÖVP increased its share of the vote by 15.4 percentage points to 42.3%, whereas its former coalition partner, the FPÖ, lost almost two-thirds of its 2000 vote, receiving only 10.0%. The opposition Social Democratic Party (Sozialdemokratische Partei Österreichs, SPÖ), lost its position as the largest party in parliament, which it had held since 1970, although it increased its share of the vote to 36.5%. The fourth party represented in parliament, the opposition Greens (Die Grünen, GRÜNE), narrowly failed in its goal of overtaking the FPÖ and obtaining more than 10% of the vote, as it won 9.5%.

The result of the general election was considered a notable surprise by both the public and political analysts, since the media, in accordance with the polls, had expected a very close result between the SPÖ and the ÖVP. However, despite the outgoing government’s strict'austerity programme,' which has taken the form of major cutbacks in social security and welfare provision, the ÖVP improved its showing

The ÖVP's success was regarded as surprising against a background of deteriorating economic performance and no immediate prospect of a recovery. Despite an earlier announcement by the minister of finance, Karl-Heinz Grasser, that the government aimed to reach a balanced ('zero deficit') budget in 2002, the net deficit for 2002, as estimated by the Ministry of Finance, was 1.3%. According to the Austrian Institute of Economic Research (Österreichisches Institut für Wirtschaftsforschung, WIFO), the annual growth in real GDP was only 0.9% in 2002, which was due to international developments as well as to the costs of flooding in some Austrian regions in the summer of 2002. Moreover, unemployment has grown strongly: according to EU figures, the rate was 4.1% as at December 2002, which corresponded to almost 300,000 job-seekers.

At the beginning of 2003, ÖVP was negotiating with the three other parties represented in parliament in order to put together a new coalition government. The core issues in the negotiations were reforms of the pensions and taxation systems, and privatisation of the remaining state-owned industries. (The ÖVP and FPÖ subsequently renewed their coalition in February 2003.)

Collective bargaining

In Austria, collective bargaining is almost exclusively conducted at sectoral level, resulting in more than 400 separate agreements annually. Traditionally, the wage bargaining system is strongly coordinated across the economy, based on the pattern-setting role of the metalworking industry. As in 2001, the electrical and electronics subsector, covering some 62,000 employees, bargained separately from the overall metalworking sector in 2002. A notable bargaining development in 2002 was that in January, after several years of unsuccessful negotiations, the Metalworking and Textiles Union (Gewerkschaft Metall-Textil, GMT) and the employers - represented by the general crafts and trades subunit of the Austrian Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ) - reached Austria's first sectoral collective agreement for temporary work agencies, setting minimum wages for almost 27,000 agency workers, who are primarily employed in the metalworking sector (AT0202202N).


Due to the slowdown of the Austrian economy, as well as a notable oversupply of labour, there was only limited leeway for pay increases in 2002. The metalworking collective agreement, concluded in October 2002 for some 210,000 employees, provides a minimum pay increase of 2.2% to 2.3% for both blue- and white-collar workers, including a'distribution option,', whereby the employer is entitled to distribute flexibly part of the increase among certain employee groups. However, each employee is guaranteed a pay increase of at least 1.9%, plus an extra one-off payment of EUR 110 at the end of March 2003.

The autumn bargaining round for the metalworking industry was notable in that its electrical and electronics subsector set the pace for other bargaining by providing a minimum pay increase of 2.3%. This agreement was formally signed before the broader metalworking industry achieved an agreement. This put some pressure on the overall industry not to negotiate wage increases below the subsector’s level.

Bargaining conducted in most other private sector areas generally resulted in minimum pay increases of between 2.1% and 2.3%. Despite current macroeconomic problems, in December 2002, the GMT union managed to achieve a follow-up agreement to the pioneering deal for temporary agency workers reached earlier in the year (see above), which provided a minimum pay increase of 2.3%.

The average collectively agreed pay increase in 2002 amounted to an estimated 2.1% (compared with 2.7% in 2001), which was slightly above the forecast inflation rate of 1.8% for 2003.

Working time

The statutory part-time work scheme for older employees, introduced in January 2000, which aims at keeping older employees in the active labour force by offering them the opportunity to reduce their working time without major income losses, has resulted in a notable number of collective agreements dealing with this issue (AT0201206F). Several thousand new employees participated in this scheme in 2002 (by December 2002, a total of 22,750 people were involved). As this increased the costs of the scheme to the state by more than EUR 230 million (the social insurance benefits for these employees are partially subsidised by the state) from January to October 2002, the government plans to amend the relevant legislation in order to decrease the number of older employees eligible to participate in the scheme (AT0209202F).

The most important working time issue addressed by collective bargaining in 2002 was new night work legislation introduced in July 2002, which ended the existing ban on night work for women (AT0207204F, see below under'Legislative developments'). Since night work is more or less usual in almost all sectors, most of the new collective agreements include clauses providing detailed regulations on night work (dealing with issues such as time credits for night work and criteria for entitlement to move to a daytime job).

Overall, the average collectively agreed normal working week remained at 38.5 hours in 2002.

Job security

In spite of a strong rise in unemployment, in particular among young employees under 25 (almost 40,000 young unemployed people were registered in November 2002), job security was not a particular matter of interest in collective bargaining during 2002.

Equal opportunities and diversity issues

Although gender-related pay inequalities have not significantly decreased during recent years and women continue to earn about 65% of male earnings on average, this issue was not addressed - or was dealt with only marginally - in the 2002 bargaining round. However, at the general assembly (the union’s highest governing body) of the Union of Salaried Employees (Gewerkschaft der Privatangestellten, GPA), held in November 2002, the union’s delegates approved an innovative gender mainstreaming plan, whereby GPA is obliged to examine all collective agreements within its domain with respect to clauses discriminating against women in terms of pay and qualifications by 2006 (AT0212202F).

Other issues

The 2002 amendment to the statutory severance pay scheme (see below under'Legislative developments') offers employees the possibility of changing from the'old' to the'new' system. Therefore, almost all collective agreements signed in 2002 include provisions for change. This issue was focus of some controversy during the bargaining process.

Legislative developments

In June 2002, parliament passed the Employees’ Severance Pay and Pensions Fund Act (Mitarbeitervorsorgegesetz, MVG) which establishes a new severance pay (Abfertigung) scheme covering all private sector employees who conclude an employment relationship from 1 January 2003 onwards. The former provisions had excluded a majority of employees (about 88% of the total) from eligibility for severance payments for reasons which were deemed questionable from a legal perspective (AT0207201N). However, payments under the new scheme will be significantly lower than was previously the case.

The new legislation stipulates that employers are obliged to contribute 1.53% of the gross monthly pay of each employee to a special severance pay and pensions fund (Mitarbeitervorsorgekasse, MVK). In the event of the employee leaving the company, the accumulated severance pay contributions may either be paid directly to the employee or transferred to the MVK which is contracted by the new employer. By obliging MVKs to administer severance pay contributions and to invest them in the private capital market in order to build up the employees’ severance pay entitlement towards a future supplementary pension, the legislator aimed to establish a system of occupational pensions provision. This was criticised by organised labour (AT0211203F). However, since the legislator failed to provide detailed regulations relating to matters such as the transfer of personal data to the MVKs and other administrative issues, the implementation of the new severance pay scheme has proved difficult.

Another important legislative measure in 2002 related to the gender-neutral regulation of night work. By adopting the EU-Nachtarbeits-Anpassungsgesetz in July 2002 (AT0207204F), the Austrian parliament ended the former ban on night work for women. Although this ban had been eased by several exceptions and collectively agreed clauses, it was deemed to contravene EU law. The new legislation, which was opposed by both parliamentary opposition parties (the SPÖ and GRÜNE), stipulates that all employees - both men and women - are considered to be night workers if they work at least three hours between 22.00 and 05.00 on at least 48 nights annually. The average daily working time for this employee group is limited to eight hours and any working time extensions must be compensated by additional time off for rest. This regulation meets the requirements of EU law in terms of workers’ protection and equality, but does not provide better standards than those which Austria was compelled to meet. Since this means reduced protection for female employees in comparison with the former legislation, organised labour strongly opposed the new regulations.

Legislative proposals concerning the extension and liberalisation of shop opening hours (AT0212201N), combating illicit work (AT0203201N), and the inclusion of'atypical employees' in the unemployment insurance system (see below under'New forms of work') proved controversial and were not enacted during 2002.

The organisation and role of the social partners

In general, the importance of social partner organisations, in particular those representing employees, slightly increased during the course of 2002, compared with 2001 when the traditional'corporatist' system was severely disrupted (AT0109201F). Unlike the year before, in 2002 the social partners were repeatedly encouraged by the coalition government to develop proposals and bills relating to specific issues when the coalition parties themselves proved unable to reach a settlement (for example in the case of the new severance pay regulations). Nevertheless, the tensions between the government and the Austrian Trade Union Confederation (Österreichischer Gewerkschaftsbund, ÖGB) remained substantial throughout the year.

Both ÖGB and, on the employers' side, WKÖ have initiated far-reaching reforms of their internal organisations. At the beginning of 2002, WKÖ reduced its membership contributions by about 30% (AT0105215N), which caused a deficit of EUR 8 million for the year. WKÖ’s budget will, it is planned, be balanced by 2005, and this goal will be reached by significantly reducing the organisation’s staff. Over the past two years, WKÖ’s staff has been reduced by around 220 employees.

At its general assembly, held in November 2002, GPA, ÖGB's largest affiliate, finalised an internal restructuring process which was prompted both by declining unionisation rates and adverse labour market developments. To meet the interests of new employee groups - such as those involved in various forms of'atypical' work - corresponding'interest groupings' and'issue platforms' within GPA have been founded (AT0008277F). Moreover, the GPA’s highest governing body has approved a planned merger with four other ÖGB affiliates in 2005, which will allow for a more coordinated bargaining policy across different branches and sectors on behalf of almost 600,000 union members (AT0212202F).

Industrial action

Whereas the high-level'corporatist' cooperation between the government on the one hand and the social partners on the other hand worked somewhat better in 2002 than in 2001, the scale of industrial disputes was higher than the year before. Unusually in the Austrian context, several strike actions occurred during the year, beginning with some hundreds of teachers in the Vorarlberg province, who held an unofficial one-day strike on 2 May 2002, protesting against the government’s spending cutbacks relating to public schools (AT0206203F). Some 3,000 post-bus employees took strike action twice in May and June 2002 for a total of four working days, in protest against the planned sell-off and partial privatisation of the state-owned post-bus company (AT0206202N). In October 2002, engine drivers at Austrian Federal Railways (Österreichische Bundesbahnen, ÖBB) launched an overtime ban, protesting against restructuring measures and a severe workforce reduction planned by management (AT0211201N). As a consequence, almost 100 train services per day were cancelled during a period of one week. Finally, at the beginning of January 2003, the flight staff ofAustrian Airlines (AUA), Austria’s national carrier, threatened to take industrial action, after management had announced the cancellation of a works agreement on job demarcation within the AUA group in order to cut labour costs (AT0301201N). This conflict had not yet been settled by early 2003.

Employee participation

There were no legislative or other significant developments in the area of employee participation in Austria in 2002.


In Austria, depending on different definitions of telework by the national statistical body,Statistik Austria, there are between 22,000 and 52,000 employees (between 0.6% and 1.4% of the total workforce) working at least partially as teleworkers. So far, there is no specific telework terminology in Austrian labour law and therefore this subject remains something of a legal loophole.

2002 saw no specific response in Austria to theagreement on telework signed in July 2002 by the EU-level central social partners (EU0207204F), which is to be implemented by the national social partners in the Member States (by July 2005). However, collective agreements have been signed in recent years for certain branches which include framework regulations relating to telework. Most of these agreements contain rules concerning the place of work, working time, working materials, compensation payments for extra work or expenditures and liability provisions. Such collective agreements have been concluded for several branches, including electric power-supply, telecommunications, information technology services and mineral oil production (AT9707123F).

Vocational training

There was no specific response in 2002 by the Austrian social partners to the'joint framework of actions for the lifelong development of competencies and qualifications ' agreed by the EU-level social partners in March 2002 (EU0204210F).

In response to youth unemployment rising considerably throughout 2002, the government introduced in September a range of measures aimed at improving employment opportunities for young people under the age of 25 (AT0210201N). These measures have failed to contain the upward trend in youth unemployment so far, according to critics because they are primarily focused on incentives for companies to employ apprentices and on the quantitative extension of unspecific training programmes for young people, rather than training tailored to specific occupations.

As regards the issue of lifelong learning in the context of competence and skill development in companies - according to the criteria of Austria's National Action Plan (NAP) on employment in response to the EU Employment Guidelines - several branch collective agreements have been concluded, entitling employees to one week’s training leave (AT0206201T). Also, the dispute over railway restructuring in October 2002 (see above under'Industrial action') was resolved by a settlement between management and the relevant trade union to extend vocational training provision for engine drivers from 180 people in 2002 to more than 250 in the coming years.

New forms of work

In 2002, there were two significant events concerning new forms of work. The first was the conclusion of Austria’s first collective agreement for temporary agency workers in January 2002 (see above under'Collective bargaining update'), which was renewed by an autumn follow-up agreement for some 30,000 employees. This agreement is notable because it specifies a minimum wage applicable even if the worker is not actually hired out (AT0202202N).

The second refers to another form of'non-standard' work. The minister for economic and labour affairs, Martin Bartenstein, proposed extending unemployment insurance coverage to all'dependent self-employed persons' and holders of'free-service contracts', who together form a group of about 50,000 people (AT0205201N). However, when WKÖ called for the inclusion of all self-employed people in the unemployment insurance system, in addition to the'dependent self-employed', the minister postponed this agenda indefinitely.


Against the background of high unemployment (4.2% in January 2003) and worsening mid-term prospects for the Austrian economy (with forecast growth in real GDP of slightly more than 1.5% and a net budget deficit of about 2% for 2003, according to WIFO), negotiations led in early 2003 by the current Chancellor, Wolfgang Schüssel (ÖVP), aimed at forming a new coalition government, proved difficult. Public opinion favoured a grand coalition of the ÖVP and the SPÖ, since such a government was assumed to be more capable of dealing with the current problems rather than any other administration.

All parties agreed on the main issues to be dealt with - such as a substantial pensions reform, a reform of the health system, a reform of state organisation and a restructuring of the state-owned industries. However, the parties disagreed on the measures needed to solve these problems. The FPÖ seemed most willing to follow the ÖVP’s policy line, but parts of the ÖVP questioned the FPÖ’s reliability. (The ÖVP and FPÖ subsequently renewed their coalition in February 2003.) (Georg Adam, University of Vienna)

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment