Austria: Temporary agency work and collective bargaining in the EU

  • Observatory: EurWORK
  • Topic:
  • Published on: 18 December 2008


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In Austria, TAW has recorded high rates of growth during the last decade, currently employing about 67,000 workers (i.e. around 2% of the country’s workforce). Although the employment of agency workers is, by international standards, highly regulated, by both a specific Temporary Employment Act (AÜG) and a sector-specific collective agreement, actual pay and working conditions have largely remained poor. This is mainly because many agencies pursue – despite statutory restrictions – a recruitment policy of ‘hiring and firing’. Therefore, most of the hardly unionised agency workers are – according to surveys – highly dissatisfied with their working situation.

Section 1. Definitions

1) In your country, is there a statutory definition of:

a) temporary agency work?b) agency worker?c) user enterprise?

If yes, please give definitions.

The 1988 Temporary Employment Act (Arbeitskräfteüberlassungsgesetz, AÜG) provides for the following definitions:

a) Temporary agency work (TAW) means the hiring out of workers to perform work assignments at third parties.

b) Agency workers can be both employees and persons having the characteristics of an employee (arbeitnehmerähnliche Personen). In the case of employees, a contract of employment is concluded between the employee and the employer company (which hires out the employee). In contrast, persons having the characteristics of an employee are not covered by a contract of employment but work by order and for account of the quasi-employer, either as ‘free service contract’ workers (freie DienstnehmerInnen) or as holders of a ‘contract for work’ (Werkvertrag), whose common feature is being economically dependent despite their formal status as self-employed persons. Also this group of workers can – according to law – be hired out to a user company, although there is no empirical evidence on this practice.

c) The user enterprise is the company to which the temporary agency workers are hired out for the purpose of performing work on behalf of this enterprise. The law clearly distinguishes between the agency (which is – in formal terms – the employer) and the user enterprise.

2) Is there a collectively agreed definition of:

a) temporary agency work?b) agency worker?c) user enterprise?

If yes, please give details (e.g. how and where defined).

No, the relevant collective agreements (see below) use the same terminology as laid down by law. However, they apply only to the private business sector of the economy, but neither to the non-profit sector nor to the public sector.

3) In your country, would you describe TAW as a sector in its own right?

TAW is no ‘profession’ which would require a special education or a certain set of skills. Moreover, due to their specific ‘triangular’ employment relationship temporary agency workers are – in social terms – almost invisible and – with respect to both the agency and the user enterprise – only marginally and temporarily integrated. This group of workers is characterised by a large degree of heterogeneity in terms of skills, education, workplace and type of work. Therefore trade unions have noticable difficulties to organise these workers. Since TAW is used in various different branches of the economy, this type of work is perceived by the Austrian trade unions as horizontal issue, which is generally not reflected in the trade unions’ organisational structure but dealt with as a sideline. Nevertheless, TAW has to be considered as a sector in its own right, since the terms of this particular trade are clearly regulated in §135 of the General Trade Act (Gewerbeordnung, GewO). This is also reflected in the structure of the Austrian Federal Economic Chamber (Wirtschaftskammer Österreich, WKÖ), which incorporates a special subunit ‘temporary agencies’ within its Association of the General Crafts and Trade (Allgemeiner Fachverband des Gewerbes). This subunit exclusively organises agency companies. Moreover, this WKÖ subunit and the Metalworking, Textiles, Agriculture and Food-processing Union (Gewerkschaft Metall-Textil-Nahrung, GMTN), which organises most of the agency workers, have concluded a collective agreement on behalf of them (even though covering only blue-collar workers), which also serves as an indicator for TAW being a sector in its own right (collective agreements are almost exclusively agreed at sectoral or industry level in Austria).

Section 2. Regulatory framework

1) Have there been any changes in the law concerning TAW since 2004?

a) Yes b) No

Yes, a 2005 amendment to the AÜG provides that temporary agency workers hired out to companies run by authorities at each level of government (i.e. the federal state, the provinces or Länder and the local state) are likewise covered by this law. The aim was to allow, in particular, hospitals and nursing institutions run by authorities to use agency staff – up to 15% of total staff per department in maximum, according to the Health and Nursing Act (Gesundheits- und Krankenpflegegesetz, GuKG) – without the risk of triggering wage dumping effects. The AÜG now rules that agency staff used in public sector institutions have to be paid equal wages to permanent staff with comparable qualifications/skills.

Thus, since 2005 the hiring out of workers by private agencies to perform work assignments at public sector institutions is lawful.

No other changes in law concerning TAW since 2004 have been reported.

2) How is TAW regulated in your country?

a) Is there a legal framework specifically for TAW; and/or is it covered by general labour law (including case law/ jurisprudence)?

The issues that immediately concern TAW are regulated by the AÜG which was specifically established in 1988 for exactly this purpose. Apart from this, many provisions of general labour law, in particular the Labour Constitution Act (Arbeitsverfassungsgesetz, ArbVG), apply to TAW. Case law and jurisprudence have brought only juridical clarifications in details but have not affected the legal framework as such.

b) What is the role, if any, of collective labour agreements and self-regulation?

In 2002, the first sectoral collective agreement for blue-collar temporary agency workers was concluded. This agreement specifies a nation-wide minimum wage that is applicable even if the worker is not actually hired out. Moreover, it provides that the level of pay must be based on the collectively agreed pay due to comparable employees of the user enterprise for doing comparable work. According to the ‘principle of favourability’, pay must in any case not be lower than the collectively agreed minimum wages for the agency work sector (AT0202202N).

White-collar workers amongst the agency workers are covered by another collective agreement – the unspecific agreement for the ‘crafts and trade’ sector (Allgemeines Gewerbe).

3) What is regulated in these provisions? In particular, does it cover:

a) use of agency work (e.g. length of assignment, sectoral bans, permitted reasons of use, number of agency workers per company, other)

First of all, it has to be stated that there is no contract concluded between the agency worker and the user company, which is a salient feature of TAW. According to the AÜG, the agency and the user company have to conclude a contract for the procuration of service (Dienstverschaffungsvertrag). This obliges the agency to place a certain number of workers at the disposal of the user company. The AÜG provides that the conclusion of a fixed-term employment contract by the agency without substantial grounds for limitation is unlawful; the fact that a certain user company needs the workers only for a fixed-term period is not recognised as such a ‘substantial ground’. Sectoral bans of TAW exist for the liberal professions, such as doctors, lawyers, psychologists etc. (whose professions are legally regulated and protected), and sovereign functions in the public administration, which means that no agency worker can legally be hired out to perform work assignments in these segments of the economy. Moreover, in some areas of the economy (such as the public sector being the agency that hires out workers, the liberal professions, publicly subsidised social services, agriculture, maintenance and training activities etc.) the AÜG does not apply. The use of TAW has not to be legitimised. The number of agency workers per company is (with the exception of the public hospital sector) not subject of any law/decree or collective agreement, but may be subject of works agreements.

b) the form of the contract (e.g. project, fixed-term, special contract, open ended, etc.)

Please see above (3a). The user company may terminate actual employment of the agency worker if he/she is not needed any more. However, the worker affected remains an employee of the agency, even during periods when he/she is not actually hired out. During these periods, the TAW collective agreement specifies a minimum wage which must not be fallen short of.

c) social security and social benefits

According to the AÜG, the agency is obliged to register the temporary agency worker with the relevant social insurance institution. Temporary agency workers are covered by the same social security system as permanent staff. With regard to dismissal, the law provides for a period of notice of at least two weeks and six weeks for blue- and white-collar workers, respectively. The TAW collective agreement lays down that this period is to be extended up to seven weeks for blue-collar workes, depending on the length of continuous employment with the same agency. The agreement also stipulates that a worker must not be dismissed as a result of the termination of a period of hiring-out and therefore provides a ban on dismissal within four working days following the termination of a work assignment.

Regarding social benefits paid by the enterprise, there is – according to prevailing legal opinion – no legal obligation of the employer to treat agency workers equally to permanent staff, unless a works agreement stipulates such an obligation.

d) conditions to open a TAW agency (e.g. license or authorisation schemes, supervision by public authorities, financial requirements, or others - please specify)

The GewO created a special trade, i.e. the ‘sector’ of temporary employment agencies specialised in hiring out of labour, and stipulates that a special license is required for performing agency activities. These activities are supervised by the authorities; in the event of repeated and substantial infringement of law the authorities are entitled to revoke this license.

e) business activities/services delivered by TW agencies (e.g. prohibition to provide other services than TAW)?

According to law, licensed temporary employment agencies are permitted to perform their business of hiring-out labour. The permission of running other business activities is subject to additional licensing procedures.

f) third-national companies or temporary agency workers (e.g. activities of foreign agencies)?

TAW agencies based in other EU/EEA countries are permitted to hire out agency workers to Austria under the terms of the AÜG. This means that agency workers from foreign EU/EEA countries enjoy the same rights as domicile temporary agency workers. However, employees from the new Member States (which joined the EU in 2004, except for Malta and Cyprus) are still subject to the provisions of the Foreign Workers’ Occupation Act (Ausländerbeschäftigungsgesetz, AuslBG) and thus need a special work permit (which is not easy to get). Employees from outside the EEA are generally not allowed to be hired out to Austria, unless the responsible ministry issues – on request of a certain company – a special decree providing for such an entitlement, which is possible in exceptional cases of higly skilled and demanded individuals.

4) Do any regulations (by law and/or collective bargaining in the TAW sector) specify equal treatment rights for agency workers with permanent workers in the user enterprise concerning:

a) pay

White-collar agency workers are covered by the collective agreement (and thus its minimum pay provisions) for white-collar workers in crafts and trades enterprises (Allgemeines Gewerbe). The TAW collective agreement for blue-collar workers specifies – for each wage group – a minimum wage that is applicable even if the worker is not actually hired out. These minimum wages are set – compared with other sectors – in the medium-pay range. Moreover, the AÜG rules that – irrespective of the basic wages granted by the TAW collective agreement – at least those wages have to be paid that are provided by the collective agreement which is applicable for the user enterprise. In any case, the principle of favourability applies.

b) training

According to the AÜG, temporary agency workers must not be discriminated against in training issues. This rule has, in particular, to be observed by the agency. The TAW collective agreement for blue-collar workers stipulates the establishment of special re-training funds which are designed to finance further training measures for workers during periods when they are not hired out. Moreover, even the user company is obliged to enhance the agency workers’ skills in a way analogous to the permanent staff, in particular if the worker is hired out for a longer period.

c) other terms or conditions of employment?

Pay and working time are the only issues where agency workers have – as a matter of principle – to be equally treated with permanent staff. With regard to all other issues, a distinct treatment of the two employee groups is legally possible. Regarding working time regulations, working hours may not be set neither by the agency nor by the user enterprise below the expected hours. Consequently, it is unlawful only to pay for the agreed working time (also during the periods when the agency worker is not hired out), if the agreed working time arrangements are regularly exceeded.

Part-time work arrangements are legal, but they have likewise to correspond to the actual working hours. An extension of working time requires the explicit consent of the worker. In this respect they are treated equally with permanent workers.

5) Do TAW workers have the right to information, consultation and representation?

In principle, the agency workers do have the same rights to information, consultation and representation as permament workers, both in the agency and in the user company. In this respect, temporary agency workers are deemed as ‘double-acting’ employees. They are entitled both to be represented by and to set up a works council not only in the ‘employer company’ (i.e. the agency) but also in the user company (which is deemed to be a ‘quasi-employer’ as well if the duration of employment is planned to last at least six months). It remains a controversial question, however, whether agency workers are covered by works agreements concluded in the user company, even if they are not explicitly addressed.

6) Is there a control/enforcement mechanism regarding any TAW regulation?

If yes,

a) is there a special labour inspectorate or a bi-partite body governing TAW?

There is no special labour inspectorate and – at least in formal terms – no bi-partite body governing TAW. However, the WKÖ has deliberated (and in this respect also – informally – consulted the GMTN) to set up some kind of ‘seal of quality’ in order to safeguard some quality standards in the sector.

b) are there any sanctions/penalties for not respecting the regulations (whether stemming from law and/or collective agreements)?

If an agency breaches (labour) law it commits a penal offence. In this case, the AÜG rules that the responsible trade authority has to inflict punishment (mostly administrative fines) on the company concerned. Moreover, the agency even risks of being withdrawn its trade license: in the case of grave infringements of the provisions of the AÜG or general labour law the authorities are entitled to revoke the lessor’s license.

7) Are there any procedures governing use of TAW and strike breaking?

In particular, can workers on strike be replaced by agency workers?

The AÜG explicitly prohibits the hiring-out to establishments which are affected by strike action or lockout. Agency workers are not required to continue work at strikebound companies. Any infringement of this rule by the agency is unlawful and may lead to the cancellation of the trade license.

Section 3. Social dialogue and collective bargaining

1) Is there any employers’ association(s) for TAW firms in your country?

The Austrian Association of Employment and Placement Agencies (Österreichischer Verband Zeitarbeit und Arbeitsvermittlung, VZA), which organises TAW agencies as well as placement agencies, is widely considered as a business organisation rather than an industrial relations actor. Membership of this organisation is voluntary. Currently, it counts around 45 members. By contrast, as mentioned above (see section 1.3), there is a special WKÖ subunit which exclusively organises TAW firms. Since membership of WKÖ is obligatory, all businesses whose main area of activity consists of the hiring out of labour are membes of the WKÖ subunit ‘temporary agencies’. This subunit is the main social partner organisation on the employer side vis-à-vis the trade unions, since it concludes the only sector-specific collective agreement. At present, there are around 500 firms operative in the sector.

2) Is there any union(s) specifically for agency workers?

There is no union in Austria which exclusively organises agency workers. As pointed out earlier (see section 1.3), TAW is perceived by the Austrian trade unions as horizontal issue, which is not reflected in the trade unions’ organisational structure. The most important industrial relations actors on behalf of agency workers are the Union of Salaried Employees, Journalists and Graphical Workers (Gewerkschaft der Privatangestellten - Druck, Journalismus, Papier, GPA-DJP) and the blue-collar GMTN. Since the latter is the country’s strongest blue-collar union and most agency workers have been hired out to the metalworking industry, which falls within the GMTN’s domain, this union was chosen to negotiate the TAW collective agreement for blue-collar workers. The task of organising TAW is explicitly laid down in the GMTN’s statutes. Actually, agency workers are free to choose whether they want to join GMTN or the union which organises the workers of the user company.

3) Collective bargaining levels

Is TAW governed by collective bargaining at:

a) intersectoral/ national level?b) the sectoral level for TAW?c) company (ie. temporary agency firm) level?

In Austria, there is a specific sectoral collective agreement for blue-collar agency workers and an unspecific collective agreement for the crafts and trade sector, which also covers white-collar agency workers.

4) Collective bargaining outcomes

There is only one sector-specific collective agreement covering blue-collar workers of the whole territory, whose provisions have been outlined earlier. In particular, it specifies a minimum wage that is applicable even if the worker is not actually hired out. During the periods of hiring out, the collective agreement covering the user company applies (if its provisions are more favourable for the worker). A similar regulation applies to the white-collar agency workers which are covered by the unspecific collective agreement for the crafts and trades sector. Besides pay, the TAW collective agreement also provides for some protection against dismissal (see section 2.3) and assures continued payment in cases of illness, the birth of a child and other eventualities.

5) Are there any examples of sector- or company-level collective agreements in other sectors that restrict, permit or otherwise regulate the use of TAW within their domain?

At company level, some works agreements provide for regulations as follows: restrictions of the use of TAW (usually 5-10% of the workforce); obligation to take over agency workers as permanent staff after one year of service; application of company-level social benefits to agency workers; information rights of the works council concerning the use of TAW; etc.

6) Please provide any data concerning:

a) trade union density for agency workers

According to estimates of trade union representatives, union density for agency workers is very low, probably standing in between 5 and 10% and at 5% among blue- and white collar workers, respectively.

b) the coverage of collective bargaining within the sector.

Due to compulsory membership of TAW agencies of the WKÖ collective bargaining coverage comes to 100%.

Section 4. Employment and working conditions of TA workers

1) Please provide the most recent data (averages) on TAW employment

a) longevity of TAW employment, i.e. how long workers remain employed

- in the sector?

No data available.

- with a particular agency?

No country-wide data available. A survey carried out by the Chamber of Labour of Salzburg (Arbeiterkammer Salzburg, AK Salzburg) in the context of the working climate index in 2007 reveals that half of the agency workers employed in the province of Salzburg was employed less than 21 months with a particular agency.

b) duration of TAW placements, i.e. the length of assignment in a user company.

The AK Salzburg survey indicates an average length of assignment in a user company of 26.1 months and 18.6 months for women and men agency workers, respectively. These figures again relate to the province of Salzburg only.

Nation-wide administrative data are provided by the Federal Ministry of Economic and Labour Affairs (Bundesministerium für Wirtschaft und Arbeit, BMWA). According to the BMWA statistics, the duration of assignment of blue- and white-collar workers significantly differs. Some 64% of the blue-collar workers get assigned for less than six months, while 52% of the white-collar workers are hired out for more than 12 months.

Table 1. Average duration of assignment, by employment status, in 2007
Duration Total Blue-collar workers White-collar workers
Below 1 month 13,685 12,774 911
1 to 3 months 13,540 12,361 1,179
3 to 6 months 11,535 10,142 1,393
6 to 12 months 10,161 8,269 1,892
More than 12 months 17,774 12,030 5,744

Source: BMWA

Tables 2 and 3 show that the average duration of assignment of blue-collar workers in crafts, trades and services is shorter than in manufacturing.

Table 2. Average duration of assignment in crafts, trades and services, by employment status, in 2007
Duration Total Blue-collar workers White-collar workers
Below 1 month 5,867 5,716 151
1 to 3 months 5,765 5,540 225
3 to 6 months 4,870 4,681 189
6 to 12 months 3,557 3,303 254
More than 12 months 4,662 3,715 947

Source: BMWA

Table 3. Average duration of assignment in manufacturing, by employment status, in 2007
Duration Total Blue-collar workers White-collar workers
Below 1 month 4,500 4,209 291
1 to 3 months 4,744 4,275 469
3 to 6 months 4,450 3,852 598
6 to 12 months 4,433 3,480 953
More than 12 months 8,511 6,465 2,046

Source: BMWA

2) Please provide any evidence from official, academic and social partner sources concerning:

a) the reasons for user companies’ usage of TAW, including any differences by sector, occupation, firm size etc.

TAW is used by most user companies as a pool of available workforce to be flexibly exhausted in order to meet fluctuations in capacity or as a flexible instrument to temporarily settle short-term peaks in labour demand. Moreover, the use of agency workers brings about some financial advantages with respect to a firm’s headcount, since TAW-related costs can be accounted as ‘material’ expenditures instead of personnel expenditures.

b) reasons for workers participation in the sector and levels of satisfaction, including any differences by age, sex, education etc.

The above-mentioned AK survey reveals that most people take agency work because of the chronic shortfall of available ‘standard’ jobs, which holds true in particular of the lowest-skilled and the highest skilled (academics) employees, and because of preceding long-term unemployment. The level of satisfaction of agency workers with their employment situation is among the lowest of all employee groups; the employment practices of the agencies tend to be assessed even worse than those of the user companies.

3) In practice, which rules and procedures may apply to temporary-agency workers in contrast to other workers in the user company?

Although, in terms of labour law and formal parity standards, TAW is – at least in comparison with most other European countries – highly developped, actual employment practices and working conditions in the TAW sector fall by far short of ‘standard’ employment practices. According to the AK working climate index, this is mainly due to job insecurities and short periods of assignment, irregular and permanently changing working time schedules, the lack of any promotion prospects as well as significantly lower incomes compared with comparable employees doing comparable work in permanent posts. Hence, it becomes evident from these findings that both labour law and the applicable collective agreements are systematically disregarded by many agencies and user companies.

Section 5. The extent and composition of TAW.

1) For 2004 and 2007, please state

a) the number of agency workers

The number of agency workers amounted to 44,125 and 66,688 in 2004 and 2007, respectively (fixed date census each on 31 July of the respective years).

b) total reventues of the TAW sector

No information available.

2) What proportion of the TAW workforce is currently

a) male/ female?

In 2007, 81% and 19% of the agency workers were male and female, respectively.

b) full/part time?

No data available.

c) young (<c. 25) or older (>c. 50) workers?

No data available.

3) Has there been any changes to the TAW sector in terms of

a) concentration, i.e. proportion of employees or turnover accounted for by the largest firms?

According to a trade union representative, the sector’s concentation has slightly increased over the past years.

b) internationalisation, i.e. number/significance of multinational TAW firms?

No information available.

4) What is your evaluation of the availability and quality of statistical data concerning TAW in your country?

Statistical data concerning TAW are – on a systematic basis – surveyed only by the BMWA. However, the scope of these statistics is by far not satisfying, such that several quantitative questions of this questionnaire cannot be answered.

Commentary by the NC

By international standards, temporary agency workers in Austria are – in terms of both labour law and social security – highly protected, by both the AÜG and the applicable collective agreements. Nevertheless, despite this high level of formal regulation (e.g. certain equal treatment rights and some protection against dismissal) agency workers are – in many respects, including even the core aspect of pay – worse off compared with permanent workers. This discrepancy between a relatively high level of regulation in the sector and actual, often sub-standard, employment practices are due to the following facts: First, the agency workers’ right to be paid equal wages compared with permanent workers only relates – with a few exceptions of certain high-wage branches listed in the TAW collective agreement – to minimum wages. Overpay and the various forms of premium pay are not covered by these regulations. Moreover, pay inequality also occurs below the formal regulatory level of collective agreements and labour law, in the course of everyday practices of, for instance, classifying agency workers lower in a user company’s grading system. Second, in Austria the unilateral termination of employment does not need to be justified, and in the TAW sector many agency workers are put under pressure by the employer to accept the disregard of protective regulations, e.g. the disregard of periods of notice laid down by law/collective agreement. This is allegedly done by making future re-employment of an employee concerned contingent on his/her acceptance. Third, only 30 out of the currently around 500 operative agencies in Austria have set up a works council; the unionisation rate among agency workers is extremely low. Hence, control and enforcement of existing regulations cannot be safeguarded in most enterprises.

Both the WKÖ and the trade unions consider TAW an essential tool in the modern, flexible world of employment, even though the latter criticise that the statutory principle of non-discrimination of agency workers continues to be systematically disregarded and even counteracted by business. With regard to the perceived impact of future EU-level regulation, organised labour does not expect any improvement of the situation. The argument is that the principle of pay equality of agency workers with permanent staff – as planned by the European Commission – cannot be converted into reality neither in Austria nor at EU level. This is mainly due to the fact that neither the agency workers nor the agencies really know the actual pay levels of the user companies to which labour is hired out. Therefore, the unions believe, such a principle would be completely ineffective in practice.

Georg Adam, Department of Industrial Sociology, University of Vienna

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