Employers Associations and Trade Unions in Austria

1. Brief Description of Employees and Employers Organizations

In Austria trade unions have a long tradition and are politically influential. It is a truly commonplace in Austria that this institution is termed ‘social partnership’.

2. Rights and Importance of Trade Unions

Trade unions represent the employees’ political, economic and social interests vis-à-vis employers, the government and the political parties. The tasks of the Austrian Trade Union Federation include for example:

  • negotiation of collective agreements
  • inter-enterprise co-determination in the context of the economic and social partnership
  • implementation of social improvements
  • safeguarding social standards
  • safeguarding real wages
  • legal service for members

The result of the generally well-balanced relations between the major players, that is, the government, employers and trade unions, which are founded on the social partnership between employee and employer representative organizations, is in a distinctively low incidence of industrial disputes in Austria as compared to most other European countries. Accordingly, through collective bargaining rather than open industrial confrontation in the form of strikes, these players have had a decisive influence on the lasting industrial peace in Austria.

Membership in the Chambers of Labour is mandatory for most employees in the private sector and represents some three million employees throughout Austria and co-operate closely with the Austrian Trade Unions. Also the counterpart, the organization for employers, the Federal Economic Chamber’s membership is compulsory. Trade union members are also entitled to legal advice and legal representation in court as well as many other benefits.

3. Types of Representation

Employees in Austria have the right of freedom of association and the right to engage in union activity. However, there is no direct trade union representation in the workplace. Instead, employees are represented by the works councils, which are statutorily elected.

Employees are in principle represented in the firm or plant by works councils. A works council may be established where the size of the business consistently exceeds five employees. The works council is elected by the employees of a business. While trade unions are generally active above the level of the single business, the works council is active on the level of the business itself (plant-level). The primary role of the works council is to represent the employee’s vis-à-vis the business owner. There may be different works councils for white-collar and blue-collar workers when each of these groups satisfies the prerequisites necessary in order to set up the respective works council.

4. Number of Representatives

The works council has to represent the interests of the workforce towards the owner of the business. If the above mentioned minimum number of all employees of the business is reached, they can form a works assembly, consisting of all employees of the business. It is to be noted in this context that certain groups, such as members of the management or of the board of a legal entity as well as executives, do not qualify as employees. The number of persons to be elected to the works council increases with the number of employees:

5. Appointment of Representatives

The works council is established for a term of 4 years and is elected by way of a secret vote. With regard to the passive suffrage, employees may be elected as members to the works council if they are 18 years of age and already employed in the company for at least 6 months. The employer is generally not allowed in any way to constrain or discriminate against the actions of the employees involved in representation of the workforce. Additionally, their dismissal is possible only after obtaining the prior consent of the appropriate labour and social court.

6. Tasks and Obligations of Representatives

The works council is entitled to supervise compliance with the laws relating to employees within the business. For this purpose, the works council may inspect the records kept in the business on the remunerations of employees and the calculations thereof, as well as all documents concerning employees. Once every quarter year, or once a month if the works council so requests, the owner shall deliberate with the works council, informing it on important matters of the business. In larger businesses, the owner has to submit to the works council a copy of the financial statements once a year. The works council can request the owner to remove irregularities and carry out the necessary measures. There are many ways of participation in different types of matters:

Participation in social matters:

The works council may participate in the management of in-house trainings, educational facilities and welfare facilities. Form and scope of these participation rights may be agreed upon in a shop agreement.

Participation in personnel matters:

In personnel matters the works council has a voice, for example, in connection with the recruitment of new staff, determination of remuneration in a particular case, relocations, disciplinary measures, allocation of company-owned residence and promotion.

Other fields of participation:

Probably the most important field in which the employer is to work together with the works council is the termination of the employment. Basically, the employer is to notify the works council, if any, prior to giving notice to an employee. Within one week of the receipt of the notice, the works council is to provide its position on the proposed termination of employment. Depending on the respective reaction of the works council, the employee does have different opportunities to challenge the termination. Any redundancy made without notifying the works council, or still within the one week notice period, when the works council has not provided a respective statement, is null and void.

Shop agreements are agreements entered into between the works council and the owner; they are to be in writing and may regulate matters which either the law or collective bargaining agreements specifically reserve to shop agreements.

The owner is to oblige to notify the works council of a proposed alteration within the company timely enough for the works council to deliberate on the alteration. Included alterations are: limitation of operation, shut-down or relocation of the company, mass redundancies, merger with other companies or change of the business purpose or organisation.

Generally, disciplinary measures are aimed at maintaining or restoring order in the workplace. Some of these disciplinary measures may only be implemented with the explicit consent of the works council by way of a shop agreement.

7. Representation in Management

Rather strict limits are imposed on the works council’s participation in economic matters; under certain circumstances, the works council may take one third of the seats in the supervisory boards of stock corporations. In companies with limited liability with more than 300 employees, a supervisory board is mandatory, thus allowing participation of the members of the works council.

For more information on these articles or any other issues involving labour and employment matters in Austria, please contact Gerlach Rechtsanwälte
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