Controversy over Chamber of Labour levy

In September 2008, the populist Alliance for the Future of Austria (BZÖ) launched a parliamentary initiative aiming to reduce the statutory Chamber of Labour (AK) levy, which is the only financial basis of the AK. When a conservative-populist alliance and thus a majority of deputies in parliament showed support for this initiative, the AK urgently warned of weakening the representational power of organised labour. In the end, the BZÖ plans were rejected in parliament.

In September 2008, a long-standing debate about the finances of the nine Chambers of Labour (Arbeiterkammern, AK) in the nine provinces (Länder) of the country was fuelled again by the populist Alliance for the Future of Austria (Bündnis Zukunft Österreich, BZÖ) – a newly-founded party represented in parliament as a result of a split-off from the populist Freedom Party (Freiheitliche Partei Österreichs, FPÖ) in 2005 (AT0512203F). Only about two weeks before the general elections on 28 September 2008, BZÖ presented a proposal aiming to reduce the so-called ‘Chamber of Labour levy’ (Arbeiterkammerumlage) for low-income earners – an issue that has been deemed popular by the party, particularly among low-skilled and poorly paid employees. The party argued that such a reduction would not only increase the wages and salaries of the most vulnerable employee groups, but would also help to lower non-wage labour costs in general.

AK organisation and finances

The entire structure of AK represents the interests of about 3.2 million employees in Austria. Unlike the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB), membership of which is voluntary, the AK structure is an obligatory interest representation body. Its membership domain includes all employees, apprentices, workers on parental leave and unemployed people, with the exception of executive staff and public sector employees (AT0406202F). According to the Chambers of Labour Act (Arbeiterkammergesetz, AKG), all of the country’s AK – that is, the Federal Chamber of Labour (Bundesarbeitskammer, BAK) as the umbrella organisation and the provincial Chambers of Labour (Länderkammern) – are self-governing public entities. In contrast to ÖGB, none of the AK are involved in collective bargaining; rather, they offer a wide range of services to their members (see below) and participate in the legislative process on behalf of the employees through the evaluation of draft legislation and drawing up proposals for amendments. According to the AKG, the entire AK structure is financed by the AK levy amounting to 0.5% of all members’ gross wages or salaries up to a certain maximum threshold (AT0004218F).

BZÖ proposal to reduce levy

The proposal presented by the BZÖ at a special parliamentary session held on 12 September 2008 includes the following provisions: all employees with a gross monthly income of below €1,100 should be exempt from paying any AK levy; employees earning a gross monthly income of between €1,100 and €1,200 should contribute 0.2% of their income as an AK levy, and those earning up to €1,350 a month should pay 0.35%. All employees earning a gross monthly income of more than €1,350 should pay a levy of 0.5% of gross income – which applies to all employees under the current regulation.

Interim ÖVP and FPÖ support

Interestingly, the BZÖ initiative was supported at a special parliamentary session by both FPÖ and the conservative Austrian People’s Party (Österreichische Volkspartei, ÖVP). In particular, with respect to the latter party, this came as a surprise: ÖVP, as the junior partner in a coalition government with the Social Democratic Party (Sozialdemokratische Partei Österreichs, SPÖ), had previously announced that it would not support any legal initiatives brought forward by other parties in the run-up to the general elections. Strikingly, the votes of the conservative-populist alliance in parliament would have sufficed to endorse a corresponding amendment to the AKG.

However, this legal initiative eventually failed at the parliamentary session on 24 September 2008, when it was rejected by the votes of all parties, including ÖVP and FPÖ, except for those of BZÖ. With regard to ÖVP, this shift of attitude seemingly resulted from firm protests by AK and trade union representatives closely linked to the party.

AK reject levy reduction proposals

Not only the BAK and the seven provincial Chambers of Labour, which are headed by a social-democratic president, but also the two conservative-led chambers, strongly opposed the levy reduction proposals. According to BAK, this measure would imply a cut in the chambers’ budget of €40 million a year. This would inevitably entail reductions in services, such as information and advice to members, legal assistance for members in the case of labour law disputes, educational and cultural services, as well as consumer protection. The current BAK President, Herbert Tumpel, has rejected the possibility of any reductions and warned of weakening the representational powers of the various AK in particular and of organised labour in general. From the chambers’ point of view, at least for the present, this threat could be averted.

Georg Adam, Department of Industrial Sociology, University of Vienna

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