EIRO 2005 ANNUAL REVIEW

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1. Political data

In April 2005, the former junior partner in Austria’s coalition government, the populist Freedom Party (Freiheitliche Partei Österreichs, FPÖ), was replaced by the so-called Alliance for the Future of Austria (Bündnis Zukunft Österreich, BZÖ), a new political party which was founded by Jörg Haider (ie the governor of the province of Carinthia) and some other members of the FPÖ after they had left the latter. This change of the junior coalition partner was possible because Mr Haider managed to take all FPÖ ministers and most of the 18 parliamentary deputies with him into the new Alliance and thus kept Chancellor Wolfgang Schüssel of the conservative People’s Party (Österreichische Volkspartei, ÖVP) in power. Interestingly, most FPÖ grass-roots activists are sticking with the old party, even though it has no longer been represented in parliament since April 2005 (AT0512203F).

In autumn 2005, three different elections to the regional (Länder) parliaments (Landtage) were held.

On 2 October 2005, a political landslide took place in the province of Styria, when the Social Democratic Party (Sozialdemokratische Partei Österreichs, SPÖ) won - for the first time in this Land - the regional elections. The SPÖ received 41.7% of the vote (up 9.4 percentage points from the previous elections in 2000), whereas the ÖVP, which had been in power since 1945 until then, lost 8.6 percentage points and thus fell to the second position (with 38.7%). As a result of this vote, Franz Voves, the head of Styria’s SPÖ, became the first social democrat since 1945 to be inaugurated as the province’s governor (Landeshauptmann). The second big surprise of this election was the Communist Party (Kommunistische Partei Österreichs, KPÖ) gaining the third position (with 6.3% of the vote, up 5.3 percentage points), whereas the Green Party (Die Grünen, GRÜNE) lost slightly (down 0.9 percentage points) with a vote of 4.7%, and the FPÖ lost almost two-thirds of their 2000 vote, receiving only 4.6%. Both FPÖ and BZÖ (with 1.7%) failed to gain representative status in the regional parliament. Instead, KPÖ gained representative status, which is, at regional (Land) level, for the first time since the 1970s.

Regional elections were also held in Burgenland on 9 October 2005, when the SPÖ won an absolute majority of both votes (with 52.2%) and seats, up 5.7 percentage points from the previous electoral round in 2000. The ÖVP slightly improved its share of the vote, receiving 36.3%, whereas - in a way analogous to the elections held in Styria - the GRÜNE lost a little bit and the FPÖ more than half of their 2000 vote, receiving 5.2% and 5.8%, respectively. The BZÖ did not stand as a candidate at all because of its perceived futility to gain representative status in the regional parliament.

Elections to the regional parliament (which were brought forward from 2006 to 2005) took place in Vienna on 23 October 2005. These elections saw the SPÖ regain an absolute majority in seats, receiving 49.1% of the vote (up 2.2 percentage points from the 2001 vote). The ÖVP and the GRÜNE also increased their vote (by 2.4 and 2.2 points, respectively), receiving 18.8% and 14.6%, respectively. The FPÖ lost 5.3 percentage points and received 14.8% of the vote, while the BZÖ clearly failed to gain representative status by receiving only 1.1% and thus remaining behind the KPÖ with 1.5%.

The most important political events during 2006 will be the forthcoming Presidency of the Council of the European Union (EU) to be taken by Austria’s government in the first half of the year, as well as general elections to the Austrian federal parliament scheduled for autumn 2006.

2. Collective bargaining update

In Austria, the main focus of collective bargaining is very clearly at sectoral/industry level. The signing of collective agreements is largely confined to the private sector, and negotiations are conducted almost exclusively at supra-plant level. In recent years, however, in particular because of spin-offs from the public sector, specific agreements have been concluded for the companies involved (eg Telekom Austria, Österreichische Bundesforste). According to statistics provided by the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB), around 400 collective agreements are concluded each year. Together with those agreements which have a duration longer than one year, some 450 collective agreements are estimated to be in force each year (AT0501202F). More precise figures for 2005 are not available.

With respect to current trends regarding the number of agreements, trade unions report on two contrary tendencies with an unclear net-effect. On the one hand, the signing parties to collective agreements tend to negotiate for narrower branches and subsectors, and collective agreements, in 2005, were once again extended to areas to which they had not applied in the past (eg the private adult education sector, AT0510202F, and the social services sector in the province of Salzburg). On the other hand, collective bargaining parties have tended to centralise bargaining for several years, in that they prefer to conclude agreements for the whole national territory instead of conducting separate, parallel bargaining for each province. Whereas the trend in terms of the number of agreements is unclear due to such contrary tendencies, collective bargaining coverage - despite an already extraordinarily high level of about 99% - is still increasing due to further (trade union) endeavours to extend bargaining coverage to as yet uncovered sectors. Only recently, in December 2005, a trade union initiative to apply for an extension order resulted in an extension of the existing collective agreement to most areas of the social and health service sector throughout the country, covering an additional 25,000 employees in the sector (www.hgpd.or.at/).

  • Pay

Considering a continuing slow recovery in the Austrian economy (with a GDP growth of around 1.9% in 2005) and a relatively high inflation rate of 2.3% in 2005, the social partners agreed higher pay increases compared with those agreed for the last few years.

According to its pattern-setting role in Austria’s system of collective bargaining, the metalworking industry opened the country’s annual collective bargaining round in September 2005. The sectoral social partners concluded a new collective agreement for about 180,000 employees providing for a considerable pay increase of 3.1%, which was the highest for several years. The relatively high inflation rate in 2005 as well as outstandingly high productivity rates of the metalworking industry in 2004 (WKÖ 2005: Leistungsbericht 2004) were the main pushing factors for the metalworking pay agreement (AT0510201N).

The average collectively agreed minimum pay increase in 2005 is estimated to be a few percentage points below that of the pattern-setting metalworking industry, at around 2.7-2.8%.

  • Working time

In February 2005, Austrian employers’ organisations, in particular the Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ) and the Federation of Austrian Industry (Industriellenvereinigung, IV), called for an amendment to the current Working Time Act (Arbeitszeitgesetz, AZG) in order to achieve greater working time flexibility. The ÖGB clearly expressed its objection to this proposal, by arguing that the existing AZG provides for enough scope for the social partners to negotiate more flexible working hours regulations. According to ÖGB, the employers’ organisations demand to more unevenly distribute normal working hours within longer reference periods would result in net working time extensions and net income losses due to cuts in overtime premium rates of pay. The social partners and the government subsequently agreed that working time regulations should remain subject to collective bargaining. Moreover, ÖGB and WKÖ agreed to work out by the end of 2005 a scheme to introduce flexible working time arrangements in sectors where they do not currently exist (AT0504204F). However, such negotiations have not yet brought any results.

Interestingly, the 2005 metalworking collective agreement does not provide for any notable working time arrangement compared with previous agreements, even though both the IV and the Federal Minister of Economy and Labour Affairs, Martin Bartenstein, had expressed their wish that flexible working time regulations should be dealt with in the metalworking negotiations. Commentators argue that the WKÖ employers’ organisation appeared to be interested in maintaining social peace rather than in further relaxing working time regulations (AT0510201N).

Apart from this, a few collective agreements, like the new one signed for the private adult education sector (see above, AT0504202N), adopted provisions on flexible working time schemes and/or on a reduction of the normal weekly working time.

  • Job security

Despite a continuous trend of slightly rising unemployment rates over the recent years, job security was not taken up as an important issue by the collective bargaining parties in 2005. Traditionally, such qualitative issues do not figure prominently in Austria’s system of collective bargaining.

  • Equal opportunities and diversity issues

When in 2004 the metalworking collective agreement introduced a common pay system for blue- and white collar workers, providing for equal treatment of both employee categories in terms of job classification and automatic pay increments (AT0412201N), it was expected that this settlement would trigger negotiations on pay harmonisation also in other sectors of the economy. However, little is known of any such negotiations in the 2005 bargaining round. As regards gender-mainstreaming, like in 2004, gender equality issues were dealt with only marginally in the 2005 bargaining round.

  • Training and skills development

Training and skills issues are of only minor importance in the country’s collective bargaining. However, there are a few collective agreements which include provisions on a certain time period off work for the purpose of further training and education. In 2005, the abovementioned new collective agreement in the private adult education sector contains a provision on a claim to educational leave of one working week per year. And a new collective agreement concluded for the information technology (IT) industry in December 2004 (which came into effect on 1 January 2005) introduced a ground-breaking further training certification scheme, according to which most IT employees are to be guaranteed certain further training standards on a comparable basis. The aim of this measure is to improve IT workers’ employability and to enhance the Austrian IT firms’ competitiveness, due to generally better qualified employees (AT0502203N).

  • Other issues

The repeatedly abovementioned collective agreement for the private adult education sector (ie the private training institutions) also contains a remarkable clause on freelance work, in that the bargaining parties commit themselves to continuing negotiations in order to improve the economic and social situation of the growing number of the sector’s freelance workers. Such a clause explicitly addressed to formally self-employed workers is unique in Austria’s tradition of collective bargaining (AT0510202F).

3. Legislative developments

In 2005, the Austrian parliament endorsed the following legislations which all came into effect on 1 January 2006:

  • The Household Service Cheque Act (Dienstleistungsscheckgesetz), which aims at tackling undeclared work in the household services sector by introducing a household service cheque. This act provides for the possibility for people using household services (such as cleaning, childcare or gardening) to pay for them with a cheque that includes social insurance contributions, instead of in cash (AT0501203N).
  • A renewal of the Law on Qualification Programmes for Young People (Jugendausbildungssicherungsgesetz, JASG) provides for the extension of special qualification courses especially for the most vulnerable groups of young people, including those who have failed to find an apprenticeship.
  • The Equal Treatment for Disabled Persons Act (Behindertengleichstellungsgesetz), which prescribes penalties for discrimination against disabled persons in and beyond working life.

4. The organisation and role of the social partners

After thoroughgoing restructuring of the WKÖ in the first half of the decade, which has culminated in a reduction of compulsory membership dues by 30%, the Chamber leadership has envisaged a further reform step beginning in 2007. Thereby, the focus is on further streamlining the organisational structure, in particular on reducing the number of sectoral subunits. Moreover, the system of membership dues is planned to be rendered more fairly by dropping multiple basic membership dues payable by one and the same company, and the current system of voting rights for the member firms shall be amended (AT0512202N).

5. Industrial action

No major industrial action has been recorded during 2005.

6. Employee participation

No new developments in this field have occurred in 2005.

According to trade unions, negotiations over the establishment of European Works Councils (EWCs) are currently being conducted in several of those companies headquartered in Austria which have come within the scope of the Directive 94/45/EC on EWCs with EU enlargement on 1 May 2004.

7. Labour migration

In general, Austria’s current ÖVP-BZÖ government is pursuing a very restrictive immigration policy, based on a rigid quota system for new residence and works permits. In recent years, the government has continued, step by step, further to restrict labour immigration by workers from outside the European Economic Area (EEA), such that the overall intake of such workers was near zero in 2005. Whereas until recently the government’s policy line was to attract skilled labour from outside the EEA to work in Austria within a certain quota-based framework, since 2005 it aims also to reduce the quota for so-called key workers (ie third-country nationals earning a certain amount of money) (AT0501206F).

In 2005, apart from 1,440 key workers, 160 self-employed people were allowed to immigrate. Some 5,460 (the 2006 quota has further been reduced to 4,425) people from outside the EEA were permitted to move into Austria under a so-called family reunification programme. Immigration of poorly qualified third-country nationals is virtually impossible, unless they are covered by special bilateral agreements on labour immigration concluded with a few countries.

As regards labour migration from the new Member States, the Austrian parliament, in April 2004, passed an EU Enlargement Adaptation Act (EU-Erweiterungs-Anpassungsgesetz), which rules that access to the Austrian labour market will continue to be restricted, for a transitional period of up to seven years, for workers from new Member States. This means that, for this transitional period, these people are treated equally to workers from outside the EEA and thus prohibited from entering the country’s labour market without restriction. The government’s argument is that this regulation will, for the next few years, protect resident employees from cheaper foreign competitors (AT0403201N). While the employers’ organisations have showed unhappy with the transitional period itself, organised labour has only criticised the lack of any attendant measures to improve Austria’s general labour market situation.

The proposed EU services Directive (also referred to as Bolkestein Directive) has received a mixed response in Austria: On the one hand, harsh criticism was expressed from the side of organised labour and several NGOs. They argue that the planned provisions on the so-called origin country principle (meaning that the services provider is subject only to the law of the country where it is established) would undermine domestic social standards. On the other hand, most employers and the Federal Minister for Economy and Labour Affairs approve of the draft Bolkestein Directive, and they only want to slightly confine its scope with respect to non-tradable services.

8. Corporate social responsibility

Since the beginning of the decade, corporate social responsibility (CSR) has been a particular focus of debate in Austria. This can be seen as a reaction to financial scandals mainly in the USA, and to a lesser extent in Europe, in the late 1990s and dwindling trust among the public in business. Since 2002, several initiatives on the establishment of CSR, guiding visions, seals of quality for fairly manufactured products and prizes awarded for companies that already practice social responsibility have been drawn up. A voluntary Austrian Corporate Governance Code came into force in 2002, which targets enterprises that raise funds through the capital markets and lays down principles of good corporate governance. However, as organised labour complains, there is only little commitment from the employers’ part to this code. In general, ÖGB and the Chamber of Labour (Arbeiterkammer, AK) demand the establishment of efficient control mechanisms (eg social audits) in order to guarantee that voluntary CSR measures are actually implemented. By contrast, IV and WKÖ stress the principle of voluntarism in implementing CSR measures and that ethical behaviour cannot be enforced. Moreover, they want to prevent any new regulations in this field; rather they aim at a reduction of the bureaucratic burden, according to the EU’s Lisbon goal of reducing regulation (AT0502204F).

9. New forms of work

No specific legislations concerning new forms of work have been reported. No statistics are available on the incidence of new forms of work in 2005, with one exception: in December 2005, the number of minimally employed persons (ie that earning not more than EUR 333.16 per month in 2005) hit its peak with 234,362, most of them (ie 164,303) were women. While labour law treats such minimally employed workers almost on the same terms as standard employees, their status is rather precarious in terms of both social insurance and income (AT0308201N).

10. Other relevant developments

In December 2005, the Austrian government announced plans to abolish the permanent tenure of appointment that applies to public employees, which would signify the termination of their absolute protection against dismissal. A draft bill on the issue should be presented in 2006. Trade unions are strongly opposed and announced industrial action, if necessary (AT0512203F).

A long-standing conflict over the railworkers’ service regulations again flared up in autumn 2005, when the government proposed plans to relax the railworkers’ current protection against dismissal in order to deal with perceived overstaffing. Also in this case, the responsible Union of Railway Employees (Gewerkschaft der Eisenbahner, GdE) threatened strike action in protest against these plans (AT0511202F).

11. Outlook

In the field of industrial relations, most probably the government’s plans to abolish the public employees’ permanent tenure and to alter the railworkers’ service regulations (see above) will result in major conflicts, given that the government will maintain to pursue these plans.

In a more general political context, it is foreseeable that the forthcoming Austrian EU Presidency in the first half of 2006 will be an issue of main importance for all political actors in the country, in particular against the background that the populist BZÖ, the junior partner in the coalition government, has repeatedly attempted to demonstrate its clear distance from Brussels’ bureaucracy and arrogance. Last, but not least, the general elections scheduled for autumn will arguably feature prominently in 2006. (Georg Adam, University of Vienna)

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