Controversy over bank's 'agreement hopping'

In October 2004, the management of Austria's BA-CA bank announced that it was leaving the savings banks employers' association and joining the commercial banks association. The aim is to switch from the savings banks collective agreement, whose pay and conditions are deemed too expensive, and move to the cheaper commercial banks agreement. Such 'agreement hopping' has hitherto not occurred in Austria. The BA-CA works council and the GPA trade union oppose the move and are bringing a court case and preparing industrial action.

On 12 October 2004, during ongoing negotiations over new staff 'service regulations' (ie terms and conditions of employment) between the management of Austria’s largest banking institute, Bank Austria-Creditanstalt (BA-CA), and its central works council, the former unexpectedly announced its immediate withdrawal from the savings banks employers' association and its simultaneous joining of the commercial banks association. According to BA-CA management, this move to another employers' association means a change of service regulations for its workforce, which should now follow the collective agreement for the commercial banks subsector. The chief executive of BA-CA, Erich Hampel, stated that from 13 October 2004 all 11,000 of the company's employees were covered by the commercial banks collective agreement and that subsector’s uniform service regulations, and that this move was irreversible.

This change means that the traditional terms and conditions of BA-CA’s employees, which have been very favourable in terms of pay, working hours and job security (AT0104213F), will be immediately undermined. Weekly working time will be extended from the current 37 hours to 38.5 hours (without any pay compensation), holidays will be reduced, the obligation to give tenure to long-serving employees will be abolished, and the automatic annual pay increment system will be replaced by a less favourable scheme. According to the management’s plans, these new conditions will come into effect on 1 January 2005. The changes are justified on competitive grounds, in particular against the background of BA-CA’s staff costs, which by far exceed the overall banking sector’s average pay expenditures. According to Mr Hampel, because the works council has for a long time shown no willingness to enter substantive negotiations over new, innovative and less expensive service regulations, the management was eventually forced to take the unusual step of leaving its employers' association in order to create new terms and conditions of employment.

Both the company’s works council and the Union of Salaried Employees (Gewerkschaft der Privatangestellten, GPA), which is responsible for the banking (sub)sector’s collective bargaining, have firmly criticised the management’s action. They consider the withdrawal of the bank from the savings banks association and thus from the subsector’s collectively agreed commitments an 'authoritarian' and illegal breach of contract, which is unprecedented in Austria. Apart from the accusation of illicit 'agreement hopping', workers' representatives are even more angry about the unilateral withdrawal of BA-CA management from company-level works agreements concluded between the management and the works council. These works agreements have complemented the subsector’s collective agreement but are not directly related to it, so there would have been no necessity to derogate from the provisions laid down in the works agreements even in the case of change of the applicable collective agreement. Therefore, many of the company’s employees reportedly feel that have been deceived by management, since in June 2004 it assured all employees in writing that a 'unilateral change of the existing works agreements is neither planned nor legally possible'.

While the BA-CA works council has organised several works meetings in order to inform the workforce and to consult with them on possible industrial action, GPA has announced that it will initiate legal proceedings in order to stop such practices of 'fleeing' binding collective agreements and works agreements. Indeed, the union appears to have no option but to apply to the courts. If it were to remain inactive in this matter, this might pave the way for many employers to change over to another, more favourable collective agreement and unilaterally to cancel works agreements. Since there is no case law directly related to this matter in Austria, experts differ in their assessments of how the courts are going to decide.

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