Navigating employment termination in Austria requires careful attention to legal requirements and established practices. Austrian labor law provides significant protections for employees, and employers must adhere to specific procedures regarding notice periods, severance pay, and permissible grounds for termination. Failure to comply with these regulations can result in costly legal challenges and reputational damage. Understanding the nuances of Austrian termination law is crucial for businesses operating in the country.
This guide provides an overview of the key aspects of employment termination in Austria, covering notice periods, severance pay, grounds for termination, procedural requirements, and employee protections. It aims to equip employers with the knowledge necessary to manage terminations fairly and lawfully.
Notice Periods
Austrian law mandates minimum notice periods for both employers and employees, which vary based on the employee's tenure and category (white-collar vs. blue-collar). These notice periods ensure a reasonable transition period for both parties.
Employer Notice Periods (White-Collar Employees):
| Length of Service | Minimum Notice Period |
|---|---|
| Less than 2 years | 6 weeks |
| 2-5 years | 2 months |
| 5-15 years | 3 months |
| 15-25 years | 4 months |
| More than 25 years | 5 months |
Employer Notice Periods (Blue-Collar Employees):
Notice periods for blue-collar workers are often governed by collective bargaining agreements (Kollektivvertrag), which typically specify shorter notice periods than those for white-collar employees. Absent a collective agreement, statutory minimums apply, which are generally shorter and can vary by industry. It's crucial to consult the relevant collective agreement or seek legal advice to determine the applicable notice period for blue-collar employees.
Employee Notice Periods:
Employees generally have a shorter notice period than employers. The statutory minimum is one month, but this can be extended by agreement, although it cannot exceed the employer's notice period.
Severance Pay (Abfertigung)
Severance pay (Abfertigung) is a mandatory payment to employees upon termination of employment under certain circumstances. The amount of severance pay depends on the employee's length of service. Austria has two systems: the "old" system (Abfertigung Alt) for employees who started before 2003, and the "new" system (Abfertigung Neu) for those who started after 2002. The "new" system involves mandatory contributions to employee benefit funds.
Severance Pay Calculation (Old System):
| Length of Service | Severance Pay Entitlement |
|---|---|
| 3-5 years | 2 months' salary |
| 5-10 years | 3 months' salary |
| 10-15 years | 4 months' salary |
| 15-20 years | 6 months' salary |
| 20-25 years | 9 months' salary |
| More than 25 years | 12 months' salary |
Severance Pay (New System):
Under the new system, employers contribute 1.53% of the employee's gross monthly salary to an employee benefit fund (Mitarbeitervorsorgekasse). Upon termination, the employee can choose to have the accumulated funds paid out, transferred to a new employer's fund, or used for a pension.
Entitlement:
Severance pay is generally payable when the employer terminates the employment, when the employee retires, or in certain cases of constructive dismissal. Employees are generally not entitled to severance if they resign, unless the resignation is justified by the employer's conduct (constructive dismissal).
Grounds for Termination
Austrian law distinguishes between termination with cause (fristauslösung) and termination without cause (Kündigung). Termination with cause allows for immediate dismissal without notice, while termination without cause requires adherence to the statutory notice periods.
Termination With Cause (fristauslösung):
Termination with cause is permitted only for serious breaches of the employment contract. Examples include:
- Theft or embezzlement
- Serious insubordination
- Disclosure of business secrets
- Unjustified absence from work
The employer must be able to prove the cause, and the termination must be issued promptly after the employer becomes aware of the reason.
Termination Without Cause (Kündigung):
Termination without cause is permissible, but the employer must observe the applicable notice periods. While no specific reason needs to be given, the termination cannot be discriminatory or based on protected characteristics.
Procedural Requirements
Proper procedure is critical for lawful termination in Austria. Failure to follow these steps can lead to legal challenges.
- Written Notice: The termination must be in writing, clearly stating the date of termination.
- Reason for Termination (if requested): While not always required for termination without cause, providing a clear and justifiable reason can help avoid disputes. If the employee requests a written explanation, the employer must provide it.
- Works Council Consultation: If a works council (Betriebsrat) exists, it must be informed of the intended termination. The works council has a limited time to object to the termination, but its objection does not prevent the termination from taking effect (unless otherwise agreed in a works agreement).
- Delivery of Notice: The notice must be delivered to the employee in a provable manner (e.g., personal delivery with acknowledgment of receipt or registered mail).
Employee Protections
Austrian law provides several protections against wrongful dismissal.
- Protection Against Discrimination: Termination cannot be based on discriminatory grounds such as gender, race, religion, sexual orientation, or disability.
- Protection During Illness: Employees are generally protected from termination during periods of illness, although this protection is not absolute and depends on the duration and nature of the illness.
- Protection of Works Council Members: Members of the works council enjoy special protection against termination.
- Challenging Termination: Employees can challenge a termination in court if they believe it is unjustified or unlawful. The court can order reinstatement or award compensation.
Navigating termination procedures in Austria requires careful attention to detail and a thorough understanding of the legal framework. Seeking legal advice is highly recommended to ensure compliance and minimize the risk of disputes.
