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Dismissal Protections Under Austrian Law: Balancing Flexibility and Employee Rights

This overview by Univ.-Prof. Dr. Franz Marhold explores the intricacies of individual dismissals under Austrian law, highlighting how Austria's limited dismissal protection system fosters a flexible labor market, celebrated as a model of "flexicurity." Key aspects include the absence of motivation for termination, central roles of works councils in dismissals, and specific safeguarding for vulnerable employees. It examines the legal frameworks that govern dismissals, the employee's rights of challenge, and the importance of social partnership in minimizing employment risks.

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Dismissal Protections Under Austrian Law: Balancing Flexibility and Employee Rights

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  1. Individual dismissals under Austrian law by Univ.-Prof.Dr. Franz Marhold

  2. Limited dismissal protection – a cornerstone of Austrian-style „flexicurity“

  3. Much appreciated by the European Commission… • 2007 Communication on Common Principles of Flexicurity • Prime example: Austria • Low de facto level of employment protection • High labour market flexibility • Elimination of barriers to job mobility by the severance pay reform • Strong reliance on social partnership • “Relatively little need for employers to take recourse to fixed term contracts” • High employment rate, high participation in lifelong learning, lowest unemployment rate in EU (now 4.2%)

  4. General rule: liberty of termination

  5. Basics • No need to motivate the dismissal • No specific formal requirements • No generally applicable period of notice • Specific laws • White-collar employees: 1.5–5 months • Collective agreements • No reinstatement in case of non-observance • Severance pay: • New system (since 2003): no direct payment by the employer

  6. General dismissal protection(AllgemeinerKündigungsschutz) A collective approach

  7. General dismissal protection • In establishments of ≥ 5 employees • Exempt: managerial staff • Central actor: works council • Informed in advance about every dismissal • 1 week for deliberation • Otherwise: dismissal is void

  8. Opinion of the works council dismissal can be challenged (within 1-2 weeks)… Where no works council exists: challenge by the employee

  9. 2 possible grounds for challenging the dismissal: 1) “Proscribed reasons” (exhaustively enumerated) • Discrimination on grounds of works council / trade union membership etc. • Victimisation • …  Alleviation of the burden of proof

  10. 2 possible grounds for challenging the dismissal: 2) “Social unacceptability” • Individual hardship • E.g. older employee with poor prospects on the labour market • Weighed against the employer’s interest in termination • Justification by personal or business reasons • Duty to consider all alternatives before dismissal as a last resort Precondition: ≥ 6 months of seniority

  11. Main consequences of the works council’s opinion Consent of the works council  No challenge on grounds of social unacceptability • “Blocking right” of the works council • Friction with Art. 30 EU Charter of Fundamental Rights? Explicit objection by the works council  “Social comparison” • Whom to dismiss among several “eligible” employees? • Employer must choose the individual who would suffer less social hardship

  12. Individual challenge (without works council involvement) Introduced for implementing EU directives: Dismissals on grounds of • Gender, age, race etc. • Leaving the workplace in case of danger • Successfully challenged dismissal is invalidated  reinstatement of the employee

  13. Termination without Notice (Entlassung)

  14. Immediate dismissal If further employment cannot be expected from the employer • “Important reason”: different catalogues for categories of employees • White-collar employees: • Disloyalty or untrustworthiness • Incapability to work • Breach of the prohibition of competition • Non-observance of orders • Persistent refusal to work • Assault or insult of the employer or fellow workers

  15. After termination without notice: Immediate information of the works council • 3 days for deliberation • Again: works council’s reaction determines possibilities of challenging the dismissal

  16. Extra protection for certain employees (Besonderer Kündigungsschutz)

  17. Special dismissal protection • Categories: • Works council members • Pregnant employees • Employees on parental leave • Employees doing military service • Disabled employees • Mechanisms of additional protection • Prior approval of a court / special authority • Justification requirement

  18. Thanks for your attention! Institute for Austrian and European Labour and Social Law WU Vienna Augasse 2-6, 1090 Vienna, Austria UNIV.PROF. DR. FRANZ MARHOLD T +43-1-313 36-DW F +43-1-313 36-DW Franz.Marhold@wu.ac.at www.wu.ac.at

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