Austria: Annual Review - 2011

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  • Published on: 28 November 2012



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In 2011, no significant elections took place in Austria and the coalition government which had been formed after the federal elections in 2008 remained in power. New legislative measures regarding the employment of foreign nationals were implemented in the wake of the opening of the Austrian labour market to workers from eight NMS in May. The fall collective bargaining rounds were unusually turbulent with the first strikes taking place since 2005. Collectively agreed minimum wage increases were higher than in 2010 with a 2% increase on average with the public sector lagging far behind the private sector due to austerity drives of the federal and provincial governments. A focus of the collective bargaining processes, as well as of legislative initiatives in the realm of industrial relations was the improvement of gender equality.

1. Political and economic developments

Please give very brief details of:

  • The government (s) in office during 2011
  • Any general or significant regional/local elections held in 2011
  • Any other significant political events which took place in 2011
  • Any forthcoming national or important regional/local elections or significant political events
  • Any major economic developments which are likely to impact upon employment and industrial relations.

If a new government took office during the year, briefly summarise the implications for policy on employment and industrial relations.

The year 2011 saw no federal elections and thus no change in government. In power was a grand coalition formed by the Social Democratic Party (SPÖ), which could defend its position as the largest party in the last general elections in September 2008 (winning 29.3% of the vote), and the conservative Austrian People’s Party (ÖVP, with 26.0% of the vote). However, some shuffles with regards to ministerial and state secretary posts on the part of the junior partner of the coalition occurred. The resignation of the vice chancellor and finance minister (both positions being occupied by the same person) of the ÖVP in April 2011 caused some changes in the composition of the government team: The former interior minister switched to the position of the finance minister, the former science minister became justice minister, the former justice minister retired from political positions, and a new science minister was introduced. Furthermore, new positions of state secretaries in the Federal Ministry for European and International Affairs (BMEIA) and the Ministry of the Interior (BMI) were established.

The only elections taking place in 2011 were local state elections for the capital of Lower Austria, in which the SPÖ kept its absolute majority with 56.8% and elections for the Austrian Students’ Union (ÖH), in which the AktionsGemeinschaft, which is affiliated to the ÖVP, won the majority of the votes with 31%.

In 2012, the only elections scheduled are local state elections (Gemeinderatswahlen) in the province of Burgenland (October) and in the larger municipalities of Innsbruck (April) and Krems (October).

With regards to the country’s economic development, Austria continued its slow upward trend after the severe economic downturn in 2008/09 (GDP -3.8% in 2009) with real GDP growth rates of +2.3% in 2010 and a forecast growth rate of 2.9% in 2011. The upswing will slow down in 2012, with a projected growth rate of only 0.9%. The unemployment rate has remained fairly low (4.4% in 2010 and 3.7% in the third quarter 2011 by LFS measurement).

2. Legislative developments

Please give brief details of important legislative developments with implications for industrial relations and working conditions, where these are not covered in other sections of your response. For example, this might include new or amended legislation on issues such as employment rights, working time, pay and conditions of employment, termination of contract, equality, social security (with implications for the employment relationship), training, new forms of work, the labour market, health and safety etc.

On 1 March 2011, a new amendment to the Equal Treatment for Men and Women Act (Gleichbehandlungsgesetz) was implemented, stipulating that companies employing more than 1,000 workers must disclose the average annual incomes of their female and male employees separately, anonymously and adjusted for working time (AT1008021I). The amendment is gradually extended to smaller companies; since the beginning of 2012, all companies with 500 or more employees are affected by the law. In 2013, it will apply to companies with more than 250 employees and in 2014 to all companies with more than 150 employees. The law is expected to force employers into more income equality by making wage discrimination visible. Works council members are allowed to see the income reports; in companies with no works councils, all employees must have access to them. The information obtained must remain confidential and must not be carried to the public. In case of violation, sanctions occur (penalty of up to EUR 360 and/or employment law sanctions like dismissals). The amendment further stipulates that all job advertisements need to include information on income of the relevant position, i.e. the collectively agreed minimum wage and – if applicable – the willingness to pay higher wages than the minimum stipulated in the collective agreement. Since the beginning of 2012, penalties occur in case of violation (warning by the district authority for first-time offenders and for repeated offense penalty payments of up to EUR 360).

In May 2011, a new law targeted towards the prevention of wage and social dumping (Lohn- und Sozialdumping-Bekämpfungsgesetz) was implemented, following an agreement between the social partners (AT1006011I). The bill was triggered by the opening of the Austrian labour market to workers from eight new central and eastern European Member States (all but Romania and Bulgaria) and contains penalties if minimum wages and salaries (as provided for in the collective agreements) fall short and if documents (e.g. relating to employment contracts) are not available in German (AT1105011I). The aim of the law is to ensure a fair competition between Austrian and foreign firms and to protect workers from underpayment. Penalties issued in case of violation of between EUR 1,000 to EUR 10,000 are in place for every underpaid employee; EUR 2,000 up to EUR 20,000 in case of recurrence or if more than three workers are concerned; and EUR 4,000 up to EUR 50,000 in case of recurrence with more than three employees involved. When only small violations occur, the companies may make delayed payments and are thus exempted from penalty fees. Moreover, if a control is denied, if underpayment occurs, or if documents are not available in German, administrative penalty procedures are triggered. If very serious violations take place recurrently, the foreign employer may be prohibited from providing services in Austria and domestic employers might be taken away their business licence for at least a year.

As part of Austria’s new Immigration Law package (Fremdenrechtsänderungsgesetz), a new, criteria-based labour immigration model was implemented on 1 July 2011 (AT1107011I). The so-called ‘Red-White-Red’ card (according to the colours of Austria’s national flag) applies to workers from outside the EEA (plus Romania and Bulgaria) and replaces a quota-based regulation on so-called ‚key workers‘. The ‘Red-White-Red’ card stipulates that if specific, pre-defined criteria are met, the person is granted access to Austria’s labour market without further labour market checks. The criteria include qualification levels, work experience, language skills and age, for which points are given; those who gain a certain level of points are granted access to the Austrian labour market. The law was passed after extensive social partner negotiations.

3. Organisation and role of the social partners

Please provide brief details of any major changes in the organisation and role of the social partners in your country during 2011. This might include trade union or employers’ organisation mergers, changes to social dialogue structures, or changes in membership levels and representativeness.

No organisational changes occurred among the Austrian trade unions in 2011. The decline in union membership, however, decelerated between 2009 and 2010 (11,000 members lost) and was the second lowest decline within the past 20 years (see AT1104011I). The GPA-djp (Union of Salaried Employees, Graphical Workers and Journalists) and the GÖD (Union of Public Employees), both member organisations of the Austrian Trade Union Federation (ÖGB), could even increase their membership numbers.

On the employer side, no change in the organisation and role was reported for 2011.

4. Developments in collective bargaining and social dialogue

Please give details of the number of collective agreements negotiated in 2011 by level (eg. national, sectoral, company), compared with numbers of agreements negotiated in 2010. Outline any trends/shifts between levels of bargaining, or changes in bargaining coverage.

  • To what extent are there derogations from collective agreements? Describe any trends in terms of derogations.
  • If there have been any major bipartite or tripartite initiatives at national level, please provide details. (Do not include initiatives which deal specifically with the economic situation as these should be covered in question 5)
  • Other conditions of employment (these might include training and skills, job security, occupational pensions, equal opportunities and diversity issues)

Information on developments in pay and working time in the course of 2011 is being collected in the Annual Updates on working time and pay, and therefore does not need to be reported here.

There are no official statistics available as to the number of collective agreements concluded in 2011. Neither the ÖGB nor the Federal Economic Chamber (WKO) provide for exact numbers of collective agreements; however, estimates suggest that more than 450 collective agreements are concluded each year, most of them at the national level and several dozen at the regional (provincial) level. The majority of collective agreements comprise comparatively small numbers of employees in narrowly defined sectors. Furthermore, there is an indefinite number of additional agreements which are valid longer than one year. Thus, the total number of agreements valid in 2011 is supposed to be significantly higher than 450. No trends or shifts between the levels of bargaining or changes in bargaining coverage could be observed. Generally speaking, collective bargaining for wages has been more controversial in 2011 than in previous years. The metalworking sector even saw warning strikes – the first strike in the sector for 25 years – before a conclusion could be reached. Collective bargaining in the retail sector, which in terms of numbers is the largest collective agreement for female employees, was almost called off and an agreement could only be reached after several negotiating rounds and the threat of taking up protest measures. This paid off in terms of comparatively high wage increases and significant improvements in framework conditions (see below). Preliminary data by Statistics Austria show that collectively agreed minimum wage increases on average showed a 2% increase (as compared to 1.6% in 2010). While the increase for white-collar workers was at 2.2% and for blue-collar workers at 2.3%, the public employees were lagging far behind with an increase of minimum wages of only 1.1% on average. This was due to cost reduction measures of the federal and provincial governments.

In Austria, no derogations from collective agreements are foreseen by law. There is the possibility to conclude works agreements at the company level; however, according to the Labour Constitution Act, these works agreements must not limit provisions laid down in the respective collective agreements. On the contrary, they can only determine more favourable standards for the employees with regards to wages and working conditions. Within collective agreements, however, so called opening clauses can be included which specifically permit derogations; this happens only very rarely, though (examples are opening clauses in the sectoral metalworking agreement in 1993 and in the sectoral electronics agreement in 2009). Within the metalworkers’ collective agreement concluded in the autumn of 2011, a so-called location clause was negotiated: Companies which in the last three years did not have a positive operating result at least twice can split the collectively negotiated wage increase of 4.2% by increasing the general wages by 3.8%, with the difference to the full increase reserved for individual pay raises (AT1112011I). The implementation of the location clause is a singular example and cannot be considered to have started a trend.

At their annual meeting in 2011 dedicated to the effects of the country’s demographic development on the labour market and social security system, the Austrian social partners presented their bipartite initiative targeted towards increasing Austria’s average actual retirement age (AT1110011I). The aim of increasing the retirement age by two years by 2020 includes partial retirement, a delay to part-time works rights for older workers, a ‘bonus-malus’ system for employers hiring or dismissing older workers, and measures targeted towards the prevention of invalidity with a focus on early intervention and rehabilitation. The social partners’ suggestions have by and large been welcomed by the federal government. Further steps of implementation are still to be awaited, though.

With regards to equal opportunities, significant improvements in framework conditions could be reached in the annual collective bargaining process. This was sparked by the suggestion of additional wage bargaining rounds for female employees only, which was brought forward by the white-collar union GPA-djp before the beginning of the autumn bargaining round (AT1109011I). While those additional bargaining rounds did not materialise, the unions concentrated on improving framework conditions especially for female workers in the regular bargaining rounds and were quite successful. This first and foremost concerns the first-time consideration of phases of parental leave (by which most often female workers are concerned) towards the classification in wage groups (i.e. the calculation of wage increases). Ten months of parental leave will be credited in the collective agreements in the retail sector, the general crafts and trade sector, the private telecommunications sector, the IT sector and the milk industry. In the stone and ceramics sector, 16 months of parental leave are to be credited towards wage development, and in the metalworking sector, 16 months for every child the parent is taking leave for (marking an improvement to the former provision of taking only 10 months into account for one child only). In the retail sector collective agreement, which is the largest single collective agreement for female workers in the country, further framework conditions were improved (AT1201011I): Special payments, i.e. holiday pay and Christmas bonus are to be paid a month earlier than before (at the end of June and at the end of October, respectively). Moreover, the crediting of ten months leave also includes family hospice leave periods. Those periods will not only be calculated towards the classification in wage groups, but also towards service anniversary bonus payments, irrespective of the length of employment with a specific company, thus taking into account the high fluctuation in the sector. The measure is considered an important step towards reducing Austria’s high gender pay gap.

5. Responses to the economic situation

With regard to the current economic situation, please give brief details of:

  • cross-sectoral and sectoral level initiatives, the responses of the social partners in your country, with a focus on any bipartite or tripartite initiatives to tackle any economic problems;
  • government responses to the economic situation with an impact on industrial relations and on labour law;
  • and any significant effects of the economic situation on the industrial relations system.

If initiatives have been reported in an earlier Annual Review, please provide an update.

No new measures targeted towards fighting the negative effects of the economic crisis were implemented in the course of 2011. With the onset of the crisis in late 2008 and in the course of 2009, the Austrian government implemented measures aimed at stimulating the economy and the labour market after an extensive tripartite social dialogue as part of two labour market packages (AT1105041Q, AT0903029I, AT0907019I). The main focus of these measures was to strengthen incomes, avoid lay-offs, improve employees' qualification levels and support the ailing economy. The majority of the measures and law amendments implemented are valid for an indefinite period and thus continued to be applied throughout 2011; some of the measures, however, were implemented for a limited period of time and have either already expired or are scheduled to expire within the next two years. Measures which have been implemented or reformed in the course of the crisis include the extension of short-time work and increase of the short-time allowance for employers; the combination of short-time work and qualification; the establishment of a work foundation for young workers; improvements to the educational leave regulation (extension of duration); facilitation of part-time work for older employees; improvements in the solidarity support allowance; and an introduction of subsidies for one-person enterprises. The following measures were either updated and/or reformed in the course of 2011: The reformation of the educational leave regulation was initially intended to expire by the end of 2011; it was changed into permanent law in late 2011. The regulation with regards to subsidies for one-person enterprises, which stipulates that the Public Employment Service AMS pays 25% of the gross wage for the first employee up to 30 years of age for up to 12 months was changed in as far as the age limit has been removed; the subsidies are scheduled to run until the end of 2013. The extension of the maximum period of short-time work was only temporarily expanded to 24 months and expires by the end of 2012 (and is thus only valid for companies which have applied for short-time work until the end of 2010). For all short-time work cases applied for from 2011 onwards, the maximum period of short-time work lies at 18 months as implemented in the framework of the first labour market package. Likewise, the increase of the short-time allowance for employer s from the seventh month of short-time work onwards expires by the end of 2012. The work foundation for young persons aged 19 to 24 years has been reformed in the course of 2011 and extended to mid-2013.

The crisis brought about no major change on industrial relations in Austria. The process of social dialogue at the national level was highly institutionalised long before the economic crisis had hit the country and the social partners have always closely cooperated with each other and with the government. Only during the period of the conservative-right-wing populist government between 2000 and 2006, the Austrian system of social partnership was challenged as attacks on the system were launched especially by the FPÖ, since this party has never been able to gain influence in the system of social partnership.

6. Developments in working conditions

Please report the most important developments in the field of working conditions and quality of work and employment during 2011 in your country. The following topics should be taken into consideration:

  • career and employment security – including job security, income, information, consultation and participation and equal opportunities;
  • health and well-being of workers–including health problems, risk exposure, impact of changes in work organisation, and violence, harassment and discriminations;
  • developing skills and competences–including qualifications, skills and competences, career prospects and training opportunities
  • work-life balance– including issues such as working time, time management at work and social infrastructures.

For answering this question, please make use of all national sources of data on working conditions such as national surveys, quantitative and qualitative research and administrative reports (for example, from the labour inspectorate or health and safety authorities). Please report also on policies, programmes or initiatives implemented at national and regional/local levels by public institutions and social partners. Please make sure you are not reporting the information already provided in question 2.

According to the latest results of the representative Austrian Working Climate Survey (Arbeitsklimaindex) from November 2011, work satisfaction has been stagnating at 108 points (the index value from the base year 1997 lies at 100 points) after it had decreased from 111 to 108 points between 2008 and 2010, showing the financial and economic crisis has manifested itself on the employees’ mood. For the first time, the analysis has been done separately by professions. It shows that employees working in banks are most satisfied with their working conditions (119 points), followed by office employees with no direct contact with clients, financial consultants and managing directors (118, 117 and 116 points, respectively). Job satisfaction thus is not surprisingly dependent on (high) income. At the bottom end of the scale are low-wage jobs like cleaners, professional (truck) drivers (both 98 points), cashiers and employees in restaurants (both 99 points) and construction workers (103 points) with poor working conditions and a low social prestige. With 100 index points, blue-collar workers in general show a lower job satisfaction than the average, as do employees with only compulsory education.

According to Statistics Austria’s latest Microcensus Labour Force Survey, working hours have declined slightly between the third quarter of 2011 and the same quarter in the previous year, continuing a trend of recent years, though. No significant initiatives towards working time were started in 2011.

Several measures intended towards decreasing the gender pay gap and promoting equal opportunities have been implemented (adoption of the Equal Treatment for Men and Women Act and improvements in framework conditions in collective agreements), as shown in chapters 2 and 4.

The educational leave regulations, which were changed in the face of the onset of the financial and economic crisis have been turned into permanent law in 2011 (see chapter 5), thus bringing improvements for employees willing to take part in further education and qualification measures.

Additional funding for the expansion of childcare institutions has been decided upon by the Council of Ministers in September 2011. The federal government makes EUR 55 million available until 2014 (EUR 15 million annually from 2012 to 2014 and EUR 10 million for 2011) as a start-up funding to the provinces which will co-finance the expansion by the same amount they receive. The federal funding is for the first time dependent on the institutions’ opening hours and currently requires 30 open weeks in a year, to be gradually extended to 47 weeks by 2014. The focus of the expansion initiative lies at increasing the number of childcare places for under 3-year old children. The provinces can use only up to 25% of the funding for childcare for children aged three to six years, but up to 100% for children less than three years of age. With this measure, it is hoped that the care rate of this age groups will be increased from 19% (2011) to 28% by the end of 2014, approaching the rate of the EU’s Barcelona targets (which lies at 33%).

In January 2011, a regulation for civil servants, entitling fathers of new-borns to take up to four weeks off (without pay) was implemented. This was strongly supported by the Federal Ministry for Women and Civil Service, which also launched a publicity campaign in late 2010 targeted towards encouraging fathers to take paternity leave with strong support from the social partners (AT1101011I). This step was considered necessary as data had shown only 4.6% of all people receiving child care benefits (i.e. in most cases parents on childcare leave) in Austria are male, having only slightly increased from a share of 1.9% in 2000. A study (in German, 34Kb PDF) conducted by FORBA (Working Life Research Centre) showed that the increase of the male share was mostly caused by self-employed workers and students, whereas dependently employed workers still tend not to interrupt their careers.

7 Industrial action

Please give brief details of strikes and other industrial action during 2011, including:

  • statistics on the number of strikes, workers involved and working days lost (absolute number and per 1,000 workers) for as much of 2011 as is available (please indicate briefly what types of action are or are not included in these figures – eg. are only strikes with a minimum number of workers or days lost included, or is only “official” action included?), and how this compares with previous years;and
  • any particularly large or significant strikes/lockouts or other disputes;

For the first time since 2005, strikes were taking place again in Austria. They occurred when the positions of the opposing social partner delegations became so entrenched that the negotiations in the social bargaining process in the metalworking sector came to a halt due to disagreement on the level of wage increases. While in the weeks preceding the negotiations, the employers’ side had stated that they would offer a wage increase only roughly compensating for the inflation rate, trade union representatives held a press conference after the first unsuccessful round of negotiating in which they announced their ambitious and – according to expert opinion – highly doubtful aim of reaching a wage increase of 5.5%. This public announcement of demands was highly untypical as normally, demands are kept secret and only internally exchanged during the first meeting. Warning strikes in about 200 companies employing about 100,000 workers were held for two days and the unions threatened with a strike for an indefinite period. However, after intervention by the highest social partner level, a further (third) round of negotiations was taken up in which a comparatively good result in terms of wage increase for the employees could be reached (AT1112011I). The sector, which always starts the annual autumn bargaining round, has traditionally served as setting the pattern for the whole economy. This deviation from normal with a quick transition from the negotiating table to warning strikes was exceptional in Austria which has had no strikes in the metalworking industry since 1986 (when during the collective bargaining process, warning strikes were held to demand higher incomes and a reduction in working time) and no strikes in the overall economy since 2005. Official statistics as to the exact number of workers involved and working days lost are not (yet) available.

8. Restructuring

Please give brief details of major and significant incidences of company restructuring and workforce reductions in 2011 and how they were dealt with, especially where these led to important industrial disputes or collective agreements, or had other notable industrial relations implications.

In the course of 2011, more job losses were announced than job creations (between 3440 and 4016 jobs to be lost vs. 2290 jobs to be created). This especially refers to the second half of 2011.

The largest restructuring case in 2011 occurred in the public sector. The province of Styria announced the loss of 700 positions by 2015 due to an austerity drive aimed at the consolidation of over EUR 1 billion. The job cuts are to be implemented via filling only every third post which will become vacant within the next four years (factsheet 17193). In the private sector, the largest job loss was announced by the listed online gaming provider Bwin.Party, which was to make 400 of its 750 jobs in Vienna redundant by the end of 2011. No direct dismissals were planned, but socially acceptable solutions were to be found. The job cuts were due to the British owners’ offshoring plan of delocalising parts of the IT to India and other countries (factsheet 17801). Furthermore, the tobacco manufacturer Austria Tabak announced to close down its last remaining production site in Austria in Hainburg, thus making 320 workers redundant (240 in the production site and 80 in the company’s headquarter in Vienna). The step was due to the company’s offshoring plans of the production to Eastern Europe. The trade unions strongly rejected the restructuring measure, by which employees mostly in the 40+ year range were affected with over half of the employees being female. A social plan was agreed upon which will provide the concerned employees with further training measures (factsheet 17663). The bank sector also saw restructuring with the Bank Austria announcing a job loss of 250 to 800 employees by 2015 (factsheet 19175) and the ÖVAG of 250 by 2013 (factsheet 19167).

The largest job creation in Austria in the course of 2011 was announced by the US fast food chain McDonald’s which was to create 500 jobs by the end of the year (factsheet 17039), followed by Infineon Technologies, which was to create 400 additional jobs by the end of 2011 (factsheet 17661).

9. Other relevant developments

If there been any other significant developments affecting employment relations in 2011 that have not been mentioned above, please give brief details.

No other relevant industrial relations developments have occurred in 2011.

References:

Bernadette Allinger, FORBA (Working Life Research Centre)

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