Social partners propose new rules on unemployment benefit entitlement

In November 2003, the Austrian social partners jointly proposed a redefinition the 'provisions of reasonableness' which govern the conditions under which unemployed people may refuse a job offer without losing their entitlement to unemployment benefits. According to the partners' agreement, unemployed people would be forced, after 100 days of unemployment, to take up a job offered even if it is unrelated to their previous occupation. As compensation, they could refuse jobs if the pay is below a certain level. The Minister of Economy and Labour Affairs, who asked the social partners to negotiate on this matter, is expected to adopt the proposals.

After intense negotiations between the social partners over recent months, on 25 November 2003 they agreed to propose a tightening of the 'provisions of reasonableness' (Zumutbarkeitsbestimmungen) which govern the conditions under which unemployed people may refuse a job offered by the Labour Market Service (Arbeitsmarktservice, AMS) without losing their entitlement to unemployment benefits (AT0303202F). The social partners’ agreement provides that the period during which unemployed people may refuse to take up a job unrelated to their previous occupation (known as the Berufsschutz) should be reduced to the first 100 days of unemployment. As a compensation, a 'pay guarantee' (Entgeltschutz) should be introduced, whereby, for a period of 120 days from the first day of unemployment, unemployed people may refuse a job offered if the pay is below of 80% of the their previous earnings liable to unemployment insurance contributions (Bemessungsgrundlage). After this 120-day period, the minimum would be reduced to 75%.

At present, the 'provisions of reasonableness' grant a longer period during which unemployed people are entitled to refuse a job which is unrelated to their previous occupation. Under the current regulations, people are obliged to take up such a job only when their regular unemployment benefit has been exhausted and they are covered solely by the unemployment assistance scheme (Notstandshilfe). However, the 'pay guarantee' (of 80% or 75%) now proposed by the social partners is regarded as an improvement for unemployed people in relation to the present situation, since the current regulations are very vague, referring only to 'adequate pay', meaning that unemployed people are only entitled to refuse jobs paying less than the collectively agreed rate for the job. It is planned that people who worked part time prior to their unemployment will be able to refuse a job paying less than 100% of the wage in their former job.

According to the social partners’ agreement, as a core aspect of the planned reform, the AMS should be obliged by law to develop individual 'advisory plans' for each job-seeker in order to at least maintain (or - if possible - increase) their skills.

As regards local/regional mobility for unemployed people, the 'provisions of reasonableness' proposed by the social partners provide that they would not be obliged to accept jobs where the time that is necessary for travelling to work exceeds a quarter of the actual working hours. However, in any event, unemployed people offered a part-time job for at least 20 hours a week would be obliged to take up the job, even if the travelling time is up to one and a half hours.

It is proposed that if unemployed people breach the 'provisions of reasonableness' (by unduly refusing a job offered), they would risk suspension of their unemployment benefits or unemployment assistance allowance for a continuous period of six weeks or - in the case of a second unjustified refusal - of eight weeks.

Both the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) and the Chamber of Economy (Wirtschaftskammer Österreich, WKÖ) have praised the joint drafting of these proposals as a proof of the social partners’ efficiency. The Minister of Economy and Labour Affairs, Martin Bartenstein, has not yet stated whether he will adopt the provisions agreed by the social partners, and thus put them into effect, though most experts assume that this will be the case. In spring 2003, Mr Bartenstein charged the social partners with jointly drafting a reform of the 'provisions of reasonableness' applying to unemployed people, after the newly re-established coalition government of the conservative People’s Party (Österreichische Volkspartei, ÖVP) and populist Freedom Party (Freiheitliche Partei Österreichs, FPÖ) presented its programme for the coming legislative period, aiming to continue its 'austerity policy', including further cutbacks in welfare provisions.

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