Austria: Eiro Annual Review – 2009

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  • Observatory: EurWORK
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  • Published on: 10 January 2011



About
Country:
Austria
Author:
Georg Adam
Institution:

This record reviews the main industrial relations developments in Austria during 2009.

1. Political developments

At the general elections held on 28 September 2008, both of the parties then in government had to face losses. Nevertheless, the Social Democratic Party (Sozialdemokratische Partei Österreichs, SPÖ) could defend its position as the largest parliamentary party, by gaining 29.3% of the vote. As a consequence of the elections, the SPÖ restored the pre-existing ‘grand coalition’ government with the conservative Austrian People’s Party (Österreichische Volkspartei, ÖVP), which had received 26.0% of the vote. In 2009 the new government focussed its policies on measures to stimulate the weakening Austrian economy and to alleviate the negative effects of the economic downturn.

Elections to the regional parliaments of Carinthia, Salzburg, Vorarlberg and Upper Austria were held in March 2009 (for Carinthia and Salzburg) and September 2009 (for the two latter provinces). All these electoral rounds saw substantial losses for the SPÖ, which, however, managed to regain a relative majority of the votes and thus the governor in Salzburg. In contrast, the ÖVP maintained its clear number one position in Vorarlberg and Upper Austria, with an absolute majority in terms of both votes and seats in the former province. In Carinthia, the populist Alliance for the Future of Austria (Bündnis Zukunft Österreich, BZÖ), which was founded by the former governor of Carinthia, Jörg Haider, as a split-off from the right-wing Freedom Party (Freiheitliche Partei Österreichs, FPÖ), gained the position as the by far largest party in the regional parliament, with a vote of 44.9%.

In June 2009, the elections to the European Parliament took place in Austria. These elections saw the ÖVP replacing the SPÖ as the largest Austrian party represented in the European Parliament. While the FPÖ doubled its share of the vote, the Green Party (Die Grünen, GRÜNE) fell from about 13% to about 10%.

The 2009 round of elections to Austria’s Chambers of Labour (Arbeiterkammern) saw a sizeable loss of support for the social-democratic group, although it still holds an absolute majority of votes. In contrast, the faction linked to the FPÖ could clearly increase its share of the votes, albeit at a relatively low level of about 9% (AT0906019I).

Interestingly, the SPÖ proved the only party which had to face losses for all 2009 rounds of voting. Most commentators claim that these losses ensue from the present erratic performance of the SPÖ. In the public perception, it is argued that the lack of a clear-cut social-democratic policy line irritates many employees, particularly against the background of the current economic downturn and growing unemployment.

During spring 2009, the political debate in Austria was overshadowed by a conflict over alleged privileges of teachers in terms of their service regulations. This conflict was fuelled when the responsible minister for education wanted to introduce longer working hours for primary and secondary level teachers for budgetary reasons. As a consequence, the relevant trade union, which was strictly opposed to these plans, threatened major industrial action. The conflict was settled down when the parties involved agreed to abolish certain bonuses for teachers instead of an overall extension of working time.

In October 2009, students of the Austrian universities unexpectedly occupied part of the university premises, in particular the largest lecture hall of the University of Vienna, the so-called ‘auditorium maximum’, for two months. This move was aimed to protest - as the students claimed – against the ongoing financial undermining of the high schools and to reverse the so-called ‘Bologna process’, in particular with regard to tendencies to streamline the various disciplines in terms of contents and curricula. The protests were terminated in December 2009 without any substantial concessions on the part of the government.

In 2010, elections to the regional parliaments are scheduled for May in Burgenland and October in Vienna. Moreover, the local state parliaments stand to be re-elected in the provinces of Tyrol, Vorarlberg, Lower Austria and Styria. Apart from this, elections to the representational bodies of the Austrian Federal Economic Chamber (Wirtschaftskammer Österreich, WKÖ) will take place in February/March 2010. April 2010 will see the elections of the Austrian Federal President.

If a new government took office during the year, briefly summarise the industrial relations implications.

2. Collective bargaining developments

In Austria the conclusion of collective agreements is essentially confined to the private sector. These agreements are negotiated, almost without exception, at multi-employer sectoral level, since Austrian labour law significantly privileges multi-employer bargaining to single-employer bargaining. The public sector is excluded from formal collective bargaining, but negotiations between public-sector trade unions and government representatives take place, with parliament eventually determining the terms of employment (AT0703019Q).

Neither the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) nor the WKÖ provide for exact numbers of collective agreements. Own estimates suggest more than 500 collective agreements to be concluded each year, most of them at national level and several dozens at regional level. Furthermore, there is an indefinite number of additional agreements which have a duration longer than one year. Thus, the total number of agreements valid in 2009 is supposed to be significantly higher than 500.

During recent years, a slight increase in both the number of collective agreements and collective bargaining coverage can be observed. In 2000, according to own data bases, fewer than 450 collective agreements were concluded. The number of agreements has grown because some formerly state-regulated business areas – such as the Austrian Federal Railways (Österreichische Bundesbahnen, ÖBB), state-owned museums, the Austrian Federal Forests (Österreichische Bundesforste, ÖBf), the Federal Agency for Environmental Affairs (Umweltbundesamt), Statistics Austria (Statistik Austria), etc. – have been opened up to collective bargaining. Apart from this, collective bargaining coverage has partially been extended to as yet uncovered sectors and branches, such as the health and social services sector and the adult education sector. On the other hand, there might also be a contrary tendency, since the trade unions have sought to centralise bargaining, by concluding sectoral agreements for the whole national territory instead of conducting separate, parallel bargaining for each province (AT0501202F). However, the differentiated organisational structure of the trade unions’ negotiating counterpart on the employers’ side, the WKÖ, constitutes an essential obstacle for these centralisation tendencies. This is because the collective bargaining structure in Austria largely corresponds to the WKÖ’s organisational structure, which means that each sectoral WKÖ subunit at province level is equipped with the capacity to conclude collective agreements. The predominance of the upwards tendency translates into a further slightly rise of the overall collective bargaining coverage, which already stands at an extraordinarily high level of around 98 or 99% (AT0803029Q).

Pay

Against the background of the 2009 economic downturn, with an estimated decline in the GDP of around 3.6% for the whole year, the social partners agreed very moderate pay increases in the 2009 autumn bargaining round.

According to the metalworking industry’s pattern-setting role in Austria’s system of collective bargaining, the 2009 autumn bargaining round started in September led by the bargaining agents of the metal and mining sector. The sectoral social partners concluded a new collective agreement covering about 170,000 employees on 16 November 2009. The agreement provides for minimum and actual wages and salaries to be increased by 1.5% and 1.45%, respectively, beginning on 1 November 2009. Nominally, these wage accords are very moderate. However, given the prospective inflation rate of about 0.4-0.5% in 2009, the increase in real wages and salaries achieved in 2009 (i.e. about 1%) roughly corresponds to the real wage growths of the recent years, when inflation tended to be much higher (AT0810029I). Like the year before, no ‘distribution option’ (AT0201206F) was concluded in 2009.

The average collectively agreed minimum pay increase for the whole economy in the bargaining round 2009-10 is estimated to largely correspond to the wage accord of the metal industry, standing at around 1.5%.

Working time

Although during the metalworking negotiation round the employer side wanted to introduce a more flexible working time scheme in exchange for pay increases, the trade unions eventually managed to avert any working time relaxation, which they deemed as detrimental to the employees. However, the 2009 collective agreement for the metalworking industry contains a clause according to which the two sides of industry commit themselves to enter into negotiations about possible working time flexibilisation measures.

3. Legislative developments

On 26 February 2009, the Austrian parliament endorsed an amendment to the short-time working rules, with the aim of making them more flexible and prolonging their maximum term for adoption. This move was due to a continuously growing demand by employers for short-time working arrangements to cope with the 2009 economic downturn. Employers and trade unions, which had been the driving forces behind the legislative initiative, have largely welcomed the decision (AT0903029I).

On 9 July 2009, the Austrian parliament passed a package of measures designed to stimulate the national labour market and to seek to prevent a rise in unemployment as a result of the economic recession as of mid-2009. The measures include a further extension of the short-time working rules, flexibilisation of part-time working rules for older employees (Altersteilzeit) and the training leave (Bildungskarenz) regulation, as well as the establishment of a re-employment scheme for young employees (Jugendstiftung). Again, the social partners have generally approved of the initiative (AT0907019I). The amendment to the short-time working rules provides that the maximum term for the adoption of short-time working arrangements is now, following an initial extension from February 2009 (see above), to be further extended from the then 18 months to two years, albeit on a temporary basis only. Moreover, from the seventh month of adoption onwards, the employer is exempt from the payment of social insurance contributions on behalf of the employees affected. Instead, the AMS is obliged to pay these contributions. This measure aims to render the scheme more attractive to employers, in order to prevent them from making some of their employees redundant.

On 1 September 2009, new liability regulations (i.e. the new Contractee Liability Act (AuftraggeberInnen-Haftungsgesetz) came into effect in Austria’s construction industry through a decree issued by the responsible Minister of Labour, Social Affairs and Consumer Protection. Accordingly, construction companies that are subcontracting work to other companies are now liable for the subcontractors’ social insurance payment duties. The new legislation aims to encourage companies to use only credible subcontractors, thus preventing the wide-spread practice of ‘social fraud’. The social partners, who were involved in the drafting procedure, appear to be highly satisfied with the new regulations (AT0910039I).

On 22 October 2009, the childcare benefit scheme (Kinderbetreuungsgeld) was modified again by majority vote in parliament, by introducing an income-related option. This alternative to the by then exclusive flat-rate scheme is devised to encourage highly-skilled women earning a good wage to resume work earlier after parental leave and to attract a higher proportion of men to stay at home with their children. The aim is to set an incentive for both women and men with higher incomes to plan a family. Such an incentive seems to be important against the background of the current demographic slowdown. The government has estimated that the extension of the childcare benefit scheme will cost up to €30 million a year (AT0812039I).

Both the Service Regulation Act for Career Public Servants (Beamten-Dienstrechtsgesetz) and the Act on Equal Treatment for Men and Women in the Public Sector (Bundesgleichbehandlungsgesetz) were amended on 11 December 2009. This amendment introduced a stricter ban on bullying, tighter rules on side-line occupations for public servants, a further harmonisation of employment regulations of career public servants and contract public employees and a tighter requirement for positive action in favour of women, in that the quota for the preferential hiring of women in the public sector was raised from 40% to 45%.

4. Organisation and role of the social partners

On 29 June 2009, the Municipal Employees’ Union (Gewerkschaft der Gemeindebediensteten, GdG), which organises public employees of the local state, and the small Arts, Media, Sports and Liberal Professions Union (Gewerkschaft Kunst, Medien, Sport, freie Berufe, KMSfB) merged their organisations at a joint founding congress. This merger had become necessary because KMSfB, which lately organised only 9,250 people, could not act autonomously due to severe financial problems (AT0806029I). The new GdG-KMSfB represents about 156,000 workers. The old KMSfB debts have been borne by the trade union umbrella federation ÖGB (AT0907029I).

In November 2009, the Metalworking, Textiles, Agriculture and Food-processing Union (Gewerkschaft Metall-Nahrung-Genuss, GMTN) and the Union of Chemical Workers (Gewerkschaft der Chemiearbeiter, GdC) merged their organisations, thus establishing a new manufacturing trade union called ‘pro.ge’ (Produktionsgewerkschaft). The merger initiative seeks to streamline organisational structures, strengthen the unions’ political power and consolidate union balances. Pro.ge is a pure blue-collar trade union, with a membership domain encompassing private sector workers, retirees, apprentices and unemployed people from metalworking, mining, energy, textiles and leather, agriculture, food-processing, tobacco, and temporary agency workers – falling in the domain of the former GMTN union – and chemicals, glass production, paper, vulcanisation, mineral oil and gas – which were formerly represented by GdC. The new union now represents about 255,000 workers (AT0902029I).

No organisational changes have been reported on the employer side.

5. Industrial action

In Austria, no strike action was reported for 2009. Likewise, no changes to the regulatory framework concerning industrial action took place. Some form of industrial action or other forms of protest were threatened by trade unions during the collective bargaining procedure in the metalworking sector, in the postal sector and in the public education sector (see above), but (except for a few protest actions) did not take place.

6. Restructuring

In 2009 Austria recorded a higher incidence of major restructuring cases compared with previous years. Most of them can at least partially been traced back to the global economic downturn. The most prominent cases of company restructuring, which have entailed one or another form of protest action from the employees’ side, have involved companies as follows: Siemens Austria, in particular its software branch PSE and its Linz-based VAI Metals Technologies, with some 850 employees planned to be laid off by the end of 2010; Austria’s national air carrier, the Austrian Airlines (AUA) group, which was acquired by the German Lufthansa in 2009, with 1,500 employees standing to lose their jobs by the end of 2010; the insolvent mail-order retailer Quelle Österreich, with 1,100 employees immediately threatened by dismissal in December 2009; and Telekom Austria, the country’s main telecommunications services provider, with more than 2,500 jobs to be cut by 2011. In all these cases of planned restructuring organised labour at sector and/or company level has threatened to take some form of industrial action to avert these plans. However, rather than preventing the restructuring measures as such, organised labour has usually managed to arrange social plans and re-employment schemes to mitigate the social consequences of the job losses for the employees affected.

7. Impact of economic downturn

As indicated earlier in this report, the most important government measure in 2009 devised to directly combat the negative employment effects of the current recession was the amendment to the short-time working rules, which was endorsed by parliament in February 2009 and, in a revised version, in July 2009. The aim was to render the short-time working rules more flexible and practicable. In particular, the working hours under the short-time working arrangements were made more flexible, in that they may now range from at least 10% to a maximum of 90% of normal working hours. Moreover, the maximum term for adoption of short-time working arrangements was extended from one year to first 18 months, and then, at a second step, to two years. Strikingly, the social partners have been the driving forces behind the legislative initiative and therefore welcomed the decision. The same holds largely true for the amendment to the rules on part-time work for older employees, the flexibilisation of the unpaid training leave scheme, the introduction of a re-employment scheme for young workers (see above) and an extension of the so-called unemployment support allowance (Solidaritätsprämie). The latter scheme provides for compensatory benefits from the unemployment insurance paid to employees who agree to accept a reduction in their working hours accompanied by a corresponding reduction in pay, making it possible for unemployed persons (and – according to the amendment – also apprentices) to be hired. All these measures were introduced in July 2009.

8. Other relevant developments

There have been no other relevant industrial developments in the course of 2009.

Georg Adam, Department of Industrial Sociology, University of Vienna

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