Partial opening of labour market to workers from new Member States

In March 2007, Austria’s coalition government agreed on the partial opening of the country’s labour market to workers from the new Member States, whose access to the domestic labour market has been restricted thus far. This decision was made in light of companies’ repeated claims of a significant shortage of skilled workers in at least some sectors of the economy. However, the trade unions oppose these plans as they fear this initiative would force wage levels down, and are instead calling for a qualification initiative as well as measures prompting employers to hire more apprentices.

According to the industry branch of the Austrian Federal Economic Chamber (Wirtschaftskammer Österreich, WKÖ), the country’s businesses are suffering from a chronic shortfall of skilled domestic workers, at least in certain occupations. In particular, WKÖ reports a considerable shortage of welders, milling machine operators and turners, mechanics and toolmakers in metalworking. Consequently, WKÖ and a number of individual employers have reiterated their demands that access to the domestic labour market should be facilitated for skilled workers from the central and eastern EU Member States which acceded to the European Union on 1 May 2004.

Restricted immigration legislation

Currently, workers from all new Member States (NMS), except Malta and Cyprus, are subject to a restrictive immigration regime, as laid down in Austria’s EU Enlargement Adaptation Act (EU Erweiterungs-Anpassungsgesetz). This law is based on the provisions allowed for in the transitional arrangements of the 2003 Accession Treaty (231Kb PDF) and prohibits employees from these countries from entering Austria’s labour market without restrictions for a transitional period of up to seven years, in other words, by 2011 at the latest. Thus, workers from the new central and eastern European Member States are entitled to enter or remain in Austria’s labour market only if the authorities grant them a work permit under the Aliens Employment Act (Ausländerbeschäftigungsgesetz, AuslBG) (AT0403201N).

ÖVP proposal for opening labour market

During the winter of 2006/2007, following the repeated claims by Austria’s businesses of a significant shortage of skilled workers in some sectors of the economy, the junior partner of the present coalition government, the conservative Austrian People’s Party (Österreichische Volkspartei, ÖVP), adopted the employers’ position. At the end of February 2007, the Minister of Economy and Labour Affairs, Martin Bartenstein of the ÖVP, presented a draft bill on the partial opening of the Austrian labour market to employees from the NMS.

This draft provides that a certain number of skilled workers (up to 800 persons in 2007) from the countries concerned are allowed to be employed in Austria for a maximum period of 50 weeks. After this period, the employer may extend the contract of employment with the same worker or request a new foreign worker through the Public Employment Service (Arbeitsmarktservice, AMS). The number of foreign workers who are allowed to enter the Austrian labour market would be determined by ministerial decree each year, on the basis of an AMS evaluation of the need for skilled labour in particular sectors and regions. Moreover, employers providing apprenticeships would be favoured when it comes to assigning foreign workers to companies. This measure should act as an incentive for companies to employ apprentices and thus to provide skilled domestic workers in the near future.

Reaction to plan

While WKÖ has expressed its satisfaction with the ÖVP proposal, both the trade unions and the senior partner of the coalition government, the Austrian Social Democratic Party (Sozialdemokratische Partei Österreichs, SPÖ), initially rejected the advance opening of the Austrian labour market to workers from the NMS, as envisaged by ÖVP. However, SPÖ changed its mind at a closed government meeting held on 3–4 March 2007 in the southern city of Linz.

Nevertheless, both the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) and the Chamber of Labour (Arbeiterkammer, AK) have continued to oppose these plans. They argue that the alleged shortage of skilled workers is an untrue claim made by Austria’s businesses for the sole purpose of undermining accepted labour and social law standards and forcing down pay levels. If there was a lack of skilled workers in the occupations in question, this would have prompted the wages of the employees concerned to rise, which has apparently not been the case.

Against the background of an annual average of more than 300,000 job-seekers in 2006, the trade unions are calling for the introduction of a retraining initiative with respect to those qualifications which are scarce and most strongly demanded by business rather than opening the Austrian labour market. Apart from this, the unions believe that companies exceeding a certain threshold in terms of size should be forced to employ apprentices.

Notwithstanding this opposition to the proposal, at the beginning of March 2007, the government agreed on opening the Austrian labour market with respect to a series of occupations in the metalworking industry for up to 800 workers from the NMS during the current year. On 9 March, a slightly amended version of the draft bill proposed by Minister Bartenstein was submitted to the relevant social partners and interest groups for their consideration. This version is expected to be issued in April and to come into effect on 1 May 2007.

Georg Adam, Institute of Industrial Sociology, University of Vienna

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