Austria: Latest developments in working life Q2 2019

A political crisis that led to the collapse of the government, resolutions passed in parliament under the new interim government and developments in collective bargaining are the main topics of interest in this article. This country update reports on the latest developments in working life in Austria in the second quarter of 2019.

New interim government takes office after political crisis

Austria experienced a political crisis in May 2019, when a video was published that showed Vice-Chancellor Heinz-Christian Strache meeting with the supposed niece of a powerful Russian oligarch in 2017. In the video, the vice-chancellor appeared to be open to corrupt ideas including offering lucrative public contracts in exchange for political support. Strache, the leader of the Freedom Party of Austria (FPÖ), resigned on 18 May. ^[1]

Chancellor Sebastian Kurz, of the Austrian People’s Party (ÖVP), terminated the ÖVP-FPÖ coalition in response to the scandal. He then demanded that FPÖ Interior Minister Herbert Kickl be replaced, on the grounds that Kickl would be in charge of investigating Strache (the former head of his own party), but the request was refused. President Alexander Van der Bellen subsequently dismissed Kickl at the chancellor’s request, which led the remaining FPÖ ministers to resign.

The chancellor installed experts in the former FPÖ ministries and held a minority ÖVP government until 27 May, when he and his government lost a no-confidence vote in parliament. Following the vote, all members of the government were removed from office by President Van der Bellen – an unprecedented incident in Austrian history. ^[2]

On 3 June, an interim technocratic cabinet consisting of civil servants was inaugurated by the president. The new cabinet, made up of six women and six men, includes former President of the Constitutional Court Brigitte Bierlein as Austria’s first female chancellor. ^[3]The cabinet will direct the country's affairs until the re-election on 29 September.

Parliament approves bills to improve workers’ lives

With an interim government in place and a lack of coalition pressure, parliamentary sessions were marked by different alliances between Austrian parties with changing majorities. A number of resolutions were passed in early July in the areas of labour and social policy.

• The minimum pension for those having been employed for at least 40 years (up to 12 months military or civil service and up to 5 years child-rearing are also considered) will increase to €1,200 net (€1,500 net for married couples) from 2020.
• The care allowance for those in need of long-term care of at least 65 hours per week will be fixed annually from 2020.
• Parental leave periods will be fully credited towards wage increases and other time-dependent entitlements from 1 August 2019.
• New fathers will have the right to one month of paternal leave after the birth of a child (to be used within the first eight weeks of the child’s life) from 1 September 2019.
• Members of voluntary fire brigades, and voluntary members of assistance and rescue organisations who volunteer when natural disasters occur, will have the legal right to continued payment, while companies will receive compensation of €200 per day per volunteer released from work.
• Smoking will be banned inside bars and restaurants from 1 November 2019 (a similar 2015 plan was abandoned by the ÖVP-FPÖ coalition government).

The cost of these reform measures is estimated to be around €1.1 billion in total. ^[4] Finance Minister Hermann Müller cautioned the parliamentarians against making costly decisions (particularly in light of the upcoming election) that may jeopardise the expected budget surplus for 2019.

Social partners reacted positively to Chancellor Bierlein's first public statement after the president announced her appointment, in which she said that she intends to hold talks with them. This was particularly welcomed by trade unions, who felt that their viewpoints were often overlooked by the former government during policy development.

• Austrian parliament: Freies Spiel der Kräfte: Nationalrat hat mehr als 30 Gesetzesbeschlüsse gefasst
• Austrian parliament: Abgeordnete beschließen 1.200 € Mindestpension bei mindestens 40 Arbeitsjahren
• Austrian parliament: Nationalrat fixiert Rauchverbot in der Gastronomie ab November 2019

Trends in collective bargaining rounds

In the spring collective bargaining rounds, which concerned over 340,000 employees, the trend of the autumn bargaining rounds continued, with minimum wage increases of between 2.7% (public airport industry) and 3.4% (chemical, electronics and paper industries). In the clothing industry, an increase of 3.95% was reached as part of the gradual implementation of a minimum wage of €1,500 in all sectors by 2020. ^[5]

A number of other improvements for employees were reached during the collective bargaining process – particularly in relation to the September 2018 amendment to the Working Time Act (which extended maximum working hours to 12 hours per day and 60 hours per week). ^[6] Trade unions have focused on alleviating the effects of this reform measure in their bargaining rounds since it was implemented and over 20 collective agreements feature ‘corrective actions’ relating to long working hours. ^[7] In several sectoral collective agreements, including the chemical, electronics, textile, paper, brewing and soft drinks industries, a 100% overtime premium was negotiated from every third hour of overtime onwards, and from the 51st hour of work a week. Paid breaks when working long hours were also included in several agreements.

In some sub-sectors of the food industry, the works council must agree if the employer wishes employees to work 11 or 12 hours. In the construction and building industry, as well as in retail, a four-day working week could be negotiated as part of the collective bargaining process, potentially benefitting around 500,000 employees.^[8]

Commentary

The interim government will remain in force until the election on 29 September. Parliamentary sessions are scheduled for a few days before the election and further resolutions are expected to be passed. These will include a tax reform with a reduction in social security contributions for employees, pensioners, the self-employed and those working in agriculture and forestry. It is not known yet whether further improvements for workers will be added to the agenda during the final days of campaigning.