Austria

Types of Employment Agreements in Austria

Standard Employment Contract (Arbeitsvertrag)

The standard employment contract is the most common type of employment agreement in Austria. It is governed by the Austrian Labour Law (Arbeitsrecht) and typically includes:

• Job description and responsibilities
• Working hours
• Salary and benefits
• Notice periods
• Holiday entitlements

These contracts can be either open-ended (unbefristet) or fixed-term (befristet), as stipulated in the Employment Contract Law Adaptation Act (Arbeitsvertragsrechts-Anpassungsgesetz).

Collective Bargaining Agreements (Kollektivverträge)

Collective bargaining agreements are negotiated between employers' associations and trade unions. They set industry-wide standards for:

• Minimum wages
• Working conditions
• Leave entitlements
• Overtime regulations

These agreements are legally binding and apply to all employees within the covered sector, as per the Labour Constitution Act (Arbeitsverfassungsgesetz).

Freelance Contracts (Freier Dienstvertrag)

Freelance contracts are used for independent contractors who are not fully integrated into the company's organization. Key features include:

• Greater flexibility in working hours and location
• No subordination to the employer
• Social insurance contributions paid by the contractor

These contracts are regulated by the General Civil Code (Allgemeines Bürgerliches Gesetzbuch) and the Social Security Act (Allgemeines Sozialversicherungsgesetz).

Part-Time Employment Agreements (Teilzeitarbeit)

Part-time employment agreements are common in Austria and are governed by the Working Time Act (Arbeitszeitgesetz). They include:

• Reduced working hours (less than full-time)
• Pro-rata entitlements to benefits and leave
• Equal treatment provisions compared to full-time employees

Fixed-Term Contracts (Befristete Arbeitsverträge)

Fixed-term contracts have a predetermined end date and are regulated by the Employment Contract Law Adaptation Act. Key points include:

• Maximum duration of two years (with some exceptions)
• Restrictions on consecutive fixed-term contracts
• Automatic conversion to open-ended contracts if extended beyond legal limits

Apprenticeship Contracts (Lehrverträge)

Apprenticeship contracts are used for vocational training and are governed by the Vocational Training Act (Berufsausbildungsgesetz). They include:

• Combination of practical work and theoretical education
• Fixed duration based on the specific apprenticeship
• Special protections for young workers

Marginal Employment Contracts (Geringfügige Beschäftigung)

Marginal employment contracts are for positions with very low earnings, as defined by the General Social Insurance Act. Features include:

• Monthly earnings below a certain threshold (€485.85 in 2023)
• Limited social insurance coverage
• Flexibility for both employers and employees

All-Inclusive Contracts (All-in-Verträge)

All-inclusive contracts bundle base salary with overtime compensation. While not explicitly regulated, they must comply with general labor law principles, including:

• Minimum wage requirements
• Maximum working hour limitations
• Transparency in remuneration structure

Executive Contracts (Geschäftsführerverträge)

Executive contracts are used for managing directors and are subject to both employment and corporate law. Key aspects include:

• Higher degree of autonomy
• Often exempt from certain labor law provisions
• Special termination clauses and non-compete agreements

These contracts are governed by the Limited Liability Companies Act (GmbH-Gesetz) and the Stock Corporation Act (Aktiengesetz), in addition to general labor laws.

Essential Clauses in Austrian Employment Agreements

1. Job Description and Duties

Key Elements:

• Detailed description of the position
• Main responsibilities and tasks
• Reporting structure

Employment agreements in Austria should clearly outline the employee's role and responsibilities. This helps prevent misunderstandings and provides a basis for performance evaluations.

2. Working Hours and Location

Key Elements:

• Regular working hours
• Overtime regulations
• Workplace location
• Remote work provisions (if applicable)

Austrian law stipulates a maximum of 40 hours per week for full-time employees, with specific regulations for overtime compensation.

3. Remuneration

Key Elements:

• Base salary
• Bonus structures (if applicable)
• Payment frequency and method
• Salary review process

Salaries in Austria are typically paid 14 times a year, including holiday and Christmas bonuses.

4. Leave Entitlements

Key Elements:

• Annual leave (minimum 25 working days per year)
• Public holidays
• Sick leave
• Maternity/paternity leave

Austrian law provides generous leave entitlements, which must be reflected in employment agreements.

5. Probationary Period

Key Elements:

• Duration (maximum one month)
• Notice period during probation

The probationary period in Austria is limited to one month, during which either party can terminate the contract without notice.

6. Notice Periods and Termination

Key Elements:

• Notice periods for both employer and employee
• Grounds for immediate dismissal
• Severance pay provisions

Notice periods in Austria increase with the length of service, ranging from 6 weeks to 5 months for employees.

7. Confidentiality and Non-Compete Clauses

Key Elements:

• Definition of confidential information
• Duration of non-compete obligations
• Geographical scope of restrictions

Non-compete clauses in Austria are subject to strict regulations and must be reasonable in scope and duration.

8. Data Protection

Key Elements:

• Consent for data processing
• Employee rights regarding personal data
• Employer's data protection obligations

Employment agreements must comply with the EU General Data Protection Regulation (GDPR) and Austrian data protection laws.

9. Collective Bargaining Agreements

Key Elements:

• Reference to applicable collective agreements
• Incorporation of relevant provisions

Many sectors in Austria are covered by collective bargaining agreements, which may supersede individual contract terms.

10. Dispute Resolution

Key Elements:

• Jurisdiction for legal disputes
• Mediation or arbitration clauses (if applicable)

Specifying the competent court or alternative dispute resolution methods can help manage potential conflicts.

Conclusion

Crafting comprehensive employment agreements in Austria requires careful consideration of both statutory requirements and industry-specific norms. By including these essential clauses, employers can ensure compliance with Austrian labor laws while clearly defining the terms of employment for their workforce.

Probationary Periods in Austrian Employment Agreements

Definition and Purpose

A probationary period in Austria, known as "Probezeit," is a trial period at the beginning of an employment relationship. During this time, both the employer and employee can assess whether the arrangement is suitable for their needs.

Legal Framework

The legal basis for probationary periods in Austria is found in the Angestelltengesetz (AngG) and the Allgemeines Bürgerliches Gesetzbuch (ABGB).

Duration

According to § 19 Abs 2 AngG, the maximum duration of a probationary period for white-collar workers (Angestellte) is one month. For blue-collar workers (Arbeiter), the ABGB allows for a probationary period of up to one month as well.

Key Features

Termination During Probation

During the probationary period, either party can terminate the employment relationship without notice and without providing a reason. This is stipulated in § 19 Abs 2 AngG for white-collar workers and applies similarly to blue-collar workers under the ABGB.

Protection Against Dismissal

The general protection against dismissal does not apply during the probationary period. However, protection against discrimination still applies, as outlined in the Gleichbehandlungsgesetz (GlBG).

Collective Agreements

Some collective agreements in Austria may provide for longer probationary periods or different conditions. It's essential to check the applicable collective agreement for any industry-specific regulations.

Written Agreement

While not strictly required by law, it is advisable to include the probationary period in the written employment contract to avoid misunderstandings.

Special Cases

Apprenticeships

For apprenticeships, the Berufsausbildungsgesetz (BAG) provides for a longer probationary period of up to three months.

Fixed-Term Contracts

In fixed-term employment contracts, probationary periods should be proportionate to the overall contract duration to avoid being deemed unfair.

Conclusion

The probationary period in Austria offers flexibility for both employers and employees at the start of their working relationship. However, it's crucial to adhere to the legal framework and any applicable collective agreements to ensure compliance with Austrian labor law.

Confidentiality and Non-Compete Clauses in Austrian Employment Agreements

Confidentiality Clauses

Confidentiality clauses are common in Austrian employment agreements and are generally enforceable under Austrian law. These clauses aim to protect the employer's business secrets and sensitive information.

Legal Basis

The legal foundation for confidentiality obligations in Austria is primarily found in the Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch, ABGB) and the Austrian Act against Unfair Competition (Gesetz gegen den unlauteren Wettbewerb, UWG).

Key Points

1. Scope: Confidentiality clauses typically cover trade secrets, customer information, and other proprietary data.

2. Duration: These clauses can extend beyond the termination of employment, as long as the information remains confidential and valuable to the employer.

3. Penalties: Violations can result in civil liability and, in severe cases, criminal charges under the UWG.

Non-Compete Clauses

Non-compete clauses in Austrian employment agreements are subject to strict regulations to balance the interests of employers and employees.

Legal Framework

The primary legal basis for non-compete clauses is found in the Austrian Salaried Employees Act (Angestelltengesetz, AngG) and the Austrian Commercial Code (Unternehmensgesetzbuch, UGB).

Key Regulations

1. Duration: Non-compete clauses are limited to a maximum of one year after the termination of employment (Section 36 AngG).

2. Geographical Scope: The clause must be reasonably limited in geographical scope to protect the employer's legitimate interests.

3. Compensation: The employer must provide compensation of at least half of the employee's most recent salary for the duration of the non-compete period (Section 37 AngG).

4. Enforceability: Non-compete clauses are only enforceable if:

   • The employee is of legal age at the time of agreement
   • The restriction is reasonable and does not excessively hinder the employee's professional advancement
   • The employer has a legitimate business interest in the restriction

5. Exceptions: Non-compete clauses are not enforceable if:

   • The employee's monthly salary does not exceed a certain threshold (currently set at €3,780 gross)
   • The employment is terminated by the employer without cause
   • The employee terminates the employment for good cause attributable to the employer

Balancing Interests

Austrian courts generally strive to balance the protection of employers' legitimate interests with employees' rights to pursue their careers freely. As such, overly broad or restrictive clauses may be deemed unenforceable or subject to judicial modification.

Best Practices

1. Tailored Approach: Draft confidentiality and non-compete clauses specific to each employee's role and access to sensitive information.

2. Clear Definitions: Clearly define what constitutes confidential information and competitive activities.

3. Reasonable Restrictions: Ensure that non-compete clauses are limited in time, geography, and scope to increase the likelihood of enforceability.

4. Regular Review: Periodically review and update these clauses to reflect changes in the company's business and the employee's responsibilities.

5. Legal Consultation: Seek advice from Austrian employment law experts when drafting or enforcing these clauses to ensure compliance with current regulations and case law.

By carefully crafting confidentiality and non-compete clauses in line with Austrian law, employers can protect their business interests while respecting employees' rights and maintaining compliance with legal requirements.