Navigating employment termination in Austria requires a thorough understanding of the country's labor laws, which are designed to protect both employers and employees. Austrian law specifies mandatory notice periods, severance pay entitlements, and procedures for lawful termination. Employers must adhere to these regulations to avoid potential legal challenges and ensure a smooth separation process.
Understanding the nuances of Austrian termination law is crucial for businesses operating in the country. This includes knowing the specific notice periods required for different employee categories, calculating severance pay accurately, and following the correct procedures for both terminations with and without cause. Failing to comply with these requirements can lead to costly disputes and damage to a company's reputation.
Notice Periods
Austrian law mandates minimum notice periods for both employers and employees when terminating an employment contract. These periods vary depending on the employee's length of service and the type of employment agreement.
- Employee Notice Periods: Employees generally must provide one month's notice. This can be extended by collective agreement or individual contract, but cannot be shorter.
- Employer Notice Periods: The employer's notice period depends on the employee's tenure:
| Length of Service | Minimum Notice Period |
|---|---|
| Up to 2 years | 6 weeks |
| 2-5 years | 2 months |
| 5-15 years | 3 months |
| 15-25 years | 4 months |
| Over 25 years | 5 months |
These are minimum periods; collective bargaining agreements or individual contracts may stipulate longer notice periods. Notice must be given by the 15th or the end of a calendar month.
Severance Pay
Severance pay (Abfertigung) is a statutory entitlement for employees whose employment is terminated by the employer (with some exceptions). The amount of severance pay depends on the employee's length of service.
- Severance Calculation: The severance pay is calculated as a multiple of the employee's monthly salary.
| Length of Service | Severance Pay Entitlement |
|---|---|
| 3-5 years | 2 monthly salaries |
| 5-10 years | 3 monthly salaries |
| 10-15 years | 4 monthly salaries |
| 15-20 years | 6 monthly salaries |
| 20-25 years | 9 monthly salaries |
| Over 25 years | 12 monthly salaries |
- New System (Abfertigung Neu): Since 2003, new employees are covered by a different severance pay system. Employers contribute 1.53% of the employee's gross salary to a severance fund (Mitarbeitervorsorgekasse). Upon termination, the employee can claim the accumulated contributions.
Grounds for Termination
Austrian law distinguishes between termination with cause (Entlassung) and termination without cause (Kündigung).
- Termination With Cause (Entlassung): This is a dismissal for serious misconduct that makes it unreasonable to expect the employer to continue the employment relationship. Examples include:
- Theft or embezzlement
- Serious breach of company rules
- Disclosure of business secrets
- Unjustified refusal to work
- Termination Without Cause (Kündigung): This is a regular termination where the employer does not need to provide a specific reason, but must still adhere to the statutory notice periods. However, terminations can still be challenged as socially unjustified (sozial ungerechtfertigt) if they are discriminatory or malicious.
Procedural Requirements
To ensure a lawful termination, employers must follow specific procedural requirements:
- Written Notice: The termination notice must be in writing and delivered to the employee.
- Consultation with Works Council: If a works council (Betriebsrat) exists, it must be informed and consulted before the termination. The works council has the right to comment on the termination, but its consent is not required.
- Reason for Termination (With Cause): In cases of termination with cause, the employer must clearly state the reason for the dismissal.
- Final Paycheck: The employee must receive their final paycheck, including any outstanding wages, vacation pay, and severance pay, on or shortly after the termination date.
Employee Protections
Austrian law provides several protections for employees against wrongful dismissal:
- Protection Against Discrimination: Terminations based on discriminatory grounds (e.g., gender, religion, ethnicity, sexual orientation) are unlawful.
- Protection During Illness: Employees are generally protected from termination during periods of illness, although this protection is not absolute.
- Protection of Works Council Members: Members of the works council have special protection against termination.
- Challenging Termination: Employees can challenge a termination in court if they believe it is unlawful or socially unjustified. The court can order the employer to reinstate the employee or pay compensation.
- Social Justification: Even without a specific protected characteristic, a termination can be challenged if it is deemed "socially unjustified," meaning it is arbitrary, malicious, or disproportionately harms the employee without a legitimate business reason.
