Historically, a general distinction has been drawn between white-collar employees (Angestellte) and blue-collar workers (Arbeiter). In general, these two categories of employees are covered by different statutes and collective bargaining agreements. Nevertheless, in recent years, labor provisions contained in various statutes have become more and more similar for white-collar and blue-collar employees. In 2017, a statute unifying provisions on continued salary in case of sick leave as well as on notice periods passed the Austrian parliament. (Unification started in 2018 and was finished in 2021.)

As an alternative to an employment contract, the parties may agree to a so-called “service contract” (freier Dienstvertrag). As in an employment contract, the employee undertakes to provide services for a certain period of time. However, in a service contract, the worker is not obligated to perform the work personally, is not integrated into the corporate organization, and uses his or her own resources.

Another alternative is the “contract for work and services” (Werkvertrag), which specifies the work to be provided and guarantees a specific, successful result. Like the service contract, under a contract for work and services, the worker is not integrated into the principal’s organization, has no obligation to perform the work personally, and uses his or her own resources.

Under Austrian law, there are employment contracts for fixed terms as well as employment contracts for an indefinite period of time. These types of contracts only differ with regard to the term and termination requirements; however, otherwise, there is no distinction. Similar considerations apply with regard to part-time contracts - these contracts generally differ from full-time contracts only with regard to working time.

Generally, except for apprenticeship contracts, employment contracts may be concluded either orally or in writing. There are also no further formal requirements.

However, the EU Written Statement Directive requires member states to implement regulations providing employees with written notice of the terms and conditions of their employment. This Directive has been implemented, in part, by the Adjustment of Labor Act (Arbeitsvertragsrechtsanpassungsgesetz or AVRAG), which requires employers to provide employees with a written statement outlining the essential rights and obligations arising from the employment contract. This statement is referred to as the Service Card (Dienstzettel) and must include the following information:

• names and addresses of the parties;
• starting date and nature of employment;
• period of notice;
• the proposed place of work;
• employee’s salary classification;
• job title;
• annual vacation entitlement;
• working hours;
• applicable collective bargaining agreement;
• fund administering the contributions for severance payments (Mitarbeitervorsorgekasse); and
• starting remuneration (the amount of the basic salary, meaning the salary for normal working hours, the actual wage, and additional remuneration components such as special payments), and the due date of payment.

The employer is not obliged to provide the Dienstzettel if the employment is concluded for a period of one month or less or if the parties have a written employment contract that contains all of the above information. Employment provisions that are not expressly defined in the Dienstzettel are regulated by statutes and collective bargaining agreements.

Yes. Part-time employees have essentially the same employment status as full-time employees and may not be discriminated against based on their part-time status. However, some differences are permitted in the relative employment terms of full-time and part-time employees, particularly with respect to the performance of overtime. For part-time employees, overtime up to the normal working hours for full-time employees is remunerated with premium pay of 25 percent, if working hours exceed the agreed amount and compensatory time off is not granted within a fixed period of three months.

In general, an assignment of an employment contract is only possible upon the affected employee's consent.

The European Union Transfers of Undertakings Directive has been implemented in Austria by the Adjustment of Employment Law Act (Arbeitsvertragrechtsanpassungsgesetz ("AVRAG"); the Austrian TUPE regulation).

The qualification as an AVRAG transfer (transfer of a business or part of a business pursuant to § 3 AVRAG) depends on whether the transferred assets are distinct organizational units that pursue a distinct economic purpose. Whether a particular transaction qualifies as the transfer of an undertaking is based on the circumstances of each case. The principal question is whether the economic entity (the undertaking or business in question) retains its identity.

In the event of an AVRAG - transfer, the new employer enters into the employment contracts existing upon transfer “as an employer with all rights and obligation attached.” This refers to all rights and obligations by virtue of an individual contract.” Accordingly, the transfer of employment contracts under the AVRAG in itself does not trigger any claims for severance pay, pro-rata vacation pay, or vacation compensation because these payments are only due in the event of a termination of employment.

Austrian law generally provides employees with the right to object to the automatic transfer of their employment contract only if the acquiring entity refuses to accept the following:

• provisions on protection against termination as set forth in a collective bargaining agreement applicable before the transfer of the business; or
• any individually agreed pension commitment of the selling entity.

Employees may give notice of termination in case of a transfer, with the same rights as if notice of termination had been given by the employer if the collective bargaining agreement or shop agreements applicable after the transfer substantially worsen the employee’s working conditions. Among other things, this may mean that the employee would be entitled to severance pay under the “old system".

Pursuant to the case law of the Austrian Supreme Court, any notice of termination given to an employee by the employer (both, the transferring company and the acquiring company) in connection with the business transfer is null and void if the transfer of the business was the fundamental reason for the termination.

No, there are no statutory individual rights for employees in case of a change of control of an employer. If there is a works council, under certain circumstances the works council would need to be informed in advance of the change of control and, upon the works council's request, would have to be consulted (section 109 ARBVG; Labour Constitution Act).

Unilateral changes of terms of employment are only possible if the employment contract contains a specific reservation of rights of the employer to amend a specific term. Moreover, a strict test applies in this regard and rights to unilaterally amend the rights and obligations of the employee must be exercised by the employer at reasonable discretion (whereby at a weighting of interests, the interest of the employer in amending the entitlement must clearly outweigh the interests of the employee in keeping the entitlement).

No, Austrian law has no employment-at-will jurisdiction. Employment can only be terminated by the employer by adhering to an (agreed or otherwise applicable) notice period unless there is a grave breach of the employment duties by the employee which entitles the employer to summarily dismiss the employee. The applicable notice periods must comply with the statutory minimum notice periods (which for white-collar employees are as follows: first two years of employment: of six weeks, increasing to two months after the second year of employment, three months after the fifth year, four months after the 15th year, and five months after the 25th year.)

In business entities that regularly employ at least five employees, the employees enjoy “general” protection against termination of the contract pursuant to section 105 of the Austria Labour Constitution Act (Arbeitsverfassungsgesetz “ArbVG”). This protection encompasses all employees (including apprentices) except for executive employees of such business entities.

Pursuant to section 105 ArbVG, an employee may contest a termination if it was based on a prescribed reason or had a relevant adverse social effect on the employee (Sozialwidrigkeit). The latter is only possible after the employee has been employed for more than six months (and in case there is a works council: if the works council did not agree with the termination). An “adverse social effect on the employee” is in particular assumed if a forecast shows a high likelihood of a longer period of unemployment or a considerable loss of income for the affected employee. In particular, the age, but also the family status of the employee, his or her financial background, and similar factors may be considered. If the termination has an adverse effect on the employee, the termination nevertheless can be justified and valid. There are two reasons for justifications: subjective reasons (behavior of the employee) and “objective” operational reasons. Operational reasons for dismissal are given for example in case of technical changes, changes in the organization (especially restructuring) or economic reasons (e.g. drops in orders).

Certain groups of employees enjoy special protection against termination and the labor court or an administrative agency must usually approve these terminations in advance (meaning that the approval has to be obtained before a notice is given). This approval is (only) given if the employer proves a reason which renders the continuation of the employment unacceptable or impossible as stipulated by law.

The protected groups are as follows:

• Members of, and candidates for, a works council;
• pregnant employees, mothers, and fathers on maternity/paternity leave;
• employees rendering mandatory military services,
• disabled employees.

Furthermore, dismissals based on gender, ethnicity, age, religion or sexual orientation, are illegal and can be contested by the employee. 

The Austrian Whistleblowing Act ("HSchG") contains regulations for the protection of whistleblowers. Accordingly, "retaliatory measures" are legally ineffective in the case of justified reports by the whistleblower (section 20 HSchG). Such measures include for example, termination of employment, suspension, non-renewal or premature termination of a fixed-term employment contract, demotion or denial of promotion, change of place of work, reduction in pay or transfer of duties, etc. In the event of such measures, the employer is obliged to restore the lawful situation, to compensate for the financial loss and to pay compensation for the personal injury suffered.

Therefore, in case of termination of employment of a whistleblower, the employer must prove that the notice of termination was issued for a certain reason, was not a retaliatory measure and had nothing to do with any whistleblowing information provided by the employee.

Yes, employees have a right to privacy which is protected in various employment regulations; in particular with regard to controlling measures by the employer (regarding e-mails, internet use and also on-site inspections). The remedies available differ depending on the infringement.

Moreover, employees' right to privacy is protected by data-protection regulations. As of May 25, 2018, the EU General Data Protection Regulation ("GDPR") came into force, with the direct application within Austria. The Austrian Act on Data Protection was amended as well in May 2018.

Austrian courts have established the principle that employees, either singly or as a group, may not be discriminated against arbitrarily or for unjustified reasons. This principle has been deduced from the employer’s duty of care and respect for the employee and from public morals. However, discrimination may be justifiable if it arises inevitably from the employment situation such that the discrimination is objectively reasonable or its objectives are approved by law.

The Austrian Antidiscrimination Act ("GlBG") is one of the main statutory sources of equal employment law. The Act on the Hiring of Handicapped Employees ("BEinstG") is another example of Austrian legislation in this area.

The GlBG provides that male and female employees must be treated equally and prohibits discrimination against employees because of their sexual orientation, age, religious beliefs, national origins, or ethnic affiliation.

The GlBG applies to discriminatory acts in the areas of hiring, salary, additional voluntary social services, access to training facilities, promotion prospects, working conditions in general, and the termination of employment.

Prohibited discrimination may be either direct or indirect. Thus, regulations that do not seem to be discriminatory on their face, but have discriminatory effects, will be unlawful unless they are justifiable, adequate, and absolutely necessary. So-called “affirmative discrimination” (positive Maßnahmen), i.e., measures intended to advance equal treatment, are (if certain requirements are met) not presumed to constitute unlawful discrimination.

The GlBG particularly emphasizes the employer’s legal obligation to pay equal salaries to male and female employees. To this end, employers are, inter alia, obliged to include the minimum salary of the applicable collective bargaining agreement and their willingness to pay more than the minimum salary in any job advertisement. Furthermore, employers of companies with more than 150 employees must disclose the average income of women and men to the works council and their employees every two years.

The concept of general harassment has also been implemented by the GlBG, which means that any kind of exposure to humiliating or intimidating working conditions is legally prohibited.

Annual Leave (Vacation):

All employees are entitled to an annual leave of at least 30 business days for those employees who have less than 25 years of service, and at least 36 business days after 25 years of service; in each case based on a six-day week; in case of a 5 day week, the entitlement amounts to 25 days respectively 30 days (§ 2 UrlG, Vacation Act).

Medical Leave:

Pursuant to statutory regulations, the employee is entitled to leave during the whole time of his/her inability to work because of illness or an accident.

However, during this time of leave, employees are entitled to receive their full regular compensation from their employer for a specified period of time in case of illness or injury (unless they rendered themselves unable to work intentionally or through gross negligence).

The maximum period of compensation in the case of illness or injury depends on the years of service with the employer and on the cause of the inability to work. The period of full compensation amounts to six weeks and will rise to eight weeks after five years of service, to 10 weeks after 15 years of service and to 12 weeks after 25 years of service. In addition to these periods, employees are entitled to compensation at one-half of their salary for an additional four weeks. In case of an occupational accident or an occupational disease, the employee is usually entitled to compensation during the period of inability to work up to a maximum of two more weeks.

Parental Leave:

The Maternity Protection Act (Mutterschutzgesetz, "MSchG") and the Paternity Leave Protection Act (Väterkarenzgesetz, "VKG") provide rights to maternity and paternity leave.

Beginning eight weeks before the expected date of confinement and continuing until eight weeks after confinement, mothers must not work at all (Protection Period - paid leave). After the expiration of the Protection Period, the employee is, at her request, entitled to maternity leave until her child reaches age two (unpaid leave). The minimum period of leave is two months. Fathers are entitled to take paternity leave according to the Paternity Leave Protection Act from the date of birth until the child reaches the age of two, provided that they live in the same household as the child (unpaid leave). Maternity and paternity leave may be divided between the parents. Parents also are entitled to partially postpone their right to leave, so that parts of the leave may be used at other times up until the child begins school.

Recent Changes:

Since 1 November 2023, the entitlement to parental leave until the end of the child's 24th month only applies if it is taken by both parents - shared - or if the parent is a single parent at the time of notification. Otherwise, if only one parent takes parental leave, the entitlement ends by the child's 22nd month.

During employment:

During employment, the employee is prohibited from competing with the employer (either on his own account or on the account of a third party.

After termination:

The employee’s duty of non-competition extends beyond the termination of employment only if explicitly agreed to in the employment contract. In addition, the clause is valid only if, and to the extent that, it satisfies the following conditions:

• it applies only to the business branch of the employer;
• it does not exceed one year;
• the employee’s last monthly salary exceeds EUR 4.040 Euro gross (value for 2024 = twenty times the maximum contribution rate); and
• it does not impose restrictions on the employee which, compared to the business interests of the employer, would inequitably impede the employee’s job opportunities.

In addition, the employer is restricted from enforcing a non-competition clause if the employee terminated his or her employment for just cause or if the employer terminated the employee without just cause. In the latter case, the employer may invoke the non-competition clause only if it is willing to continue paying the former employee for the period covered by the clause.

In case of termination because of the refusal to sign a restrictive covenant the regulations on general protection against termination apply. It is not necessary to agree on consideration for the restrictive covenant and Austrian non-compete clauses usually do not contain considerations. Consideration will only have to be paid based on the statutory regulation in case the employee terminated his or her employment for just cause or if the employer terminated the employee without just cause. In this case, the employer may invoke the non-competition clause only if he undertakes to pay the former employee (the full salary) for the period covered by the clause.

Yes. State pensions are funded by mandatory contributions by employers and employees. Contributions are generally determined on the basis of monthly income/earnings. They are calculated by using the contributory basis and the specified contribution rate. The contributory basis corresponds to all monetary or in-kind benefits received by the employee from the employer with regard to the statutory insurance but is capped at a maximum of EUR 6,060 per month (the basis for the year 2024). In case the salary is higher than the aforementioned contributory basis, the exceeding part of the salary is not subject to the obligation to contribute. Contributions to pension insurance amount to 22.80% of the contributory basis (10.25% employee/12.55% employer). (Besides old-age pensions, also disability pensions and pensions to widows and widowers or orphans are covered by these contributions).

In addition, for employment contracts concluded on or after 1 January 2003 the employer is obliged to make a payment in the amount of 1.53% of the employee’s monthly salary to a specific fund (“Mitarbeitervorsorgekasse”), which is generally administered by insurance companies or banks (“Severance new”). After termination of the employment contract, employees are entitled either to a severance pay-out of the monies accumulated in these funds or to keep their vested rights to severance pay if they start work for a new employer.

All persons employed in Austria are automatically insured under the public social insurance system (employees, apprentices, and freelancers who are treated as employees for insurance purposes). This system covers health, occupational injury, pension, and unemployment insurance (so-called “statutory insurance”). Statutory insurance is funded by mandatory contributions by the employer and the employee.

Collective bargaining agreements (which are concluded on a sector basis) contain many important regulations regarding the employment relationship. In particular, they contain regulations on minimum salary and partly also on additional benefits.

Under Austrian law, there is no "auto-termination" of employment when an employee reaches pension age. Therefore, employment has to be terminated in the usual way (termination by either party, mutual termination, end of fixed-term); however, if the employee is entitled to an old-age pension, a challenge of an employer termination by the employee will usually not be possible (as because of the pension, there will be no socially adverse effect).

Conditional on a minimum number of insurance or contribution months, in general women are entitled to an old-age pension at the age of 60 and men at the age of 65. As of 2024, the retirement age for women will also be raised gradually by six months per year until 2033 to 65.

Employers and employees are free to agree on the employee working after he/she has reached retirement age.

Under certain circumstances, it is possible to pay lower contributions to statutory pension insurance if an employee is employed after he/she reaches the statutory retirement age.

Based on current regulations there is no obligation for employees to get vaccinated (other considerations might apply to the medical profession) and generally, an employer cannot make the COVID-19 vaccination mandatory. If in the future not being vaccinated prevents employees from fulfilling their contractual obligation (e.g. business travels), this might constitute a justification for termination of employment. 

Generally, the right of the employer to request employees to return to work will depend on the terms regarding working at home agreed between the employer and the employee. If an employer is entitled to request the return of the employee and the employee does not follow this request, this will usually justify a termination (however, special circumstances of the case might lead to a different result; e.g. if there are health issues the employee or if the employer does not provide sufficient protection at the workplace).