Brief Description of Employees’ and Employers’ Associations

A CBA is an agreement that the trade union (usually) negotiates annually with the employer side (chamber of commerce) for all employees in a specific industry. Typically, these agreements contain provisions on remuneration, continued payment of wages in the event of absence from work, termination of employment, or working time regulations. Most CBAs are re-negotiated every year. In particular, the minimum wage is adjusted by negotiation between the parties to the CBA.

Trade unions represent the employees and negotiate CBAs on their behalf. The other negotiation party for CBAs is the respective professional associations which represents companies and employers. Membership to a trade union is voluntary for each employee.

In contrast to voluntary membership with a trade union, there is a mandatory membership for employees with the Chamber of Labour. The Chamber of Labour was created to represent and promote the social, economic, professional and cultural interests of employees. It represents employees before the media and with the trade union before international interest groups and advises employees on all relevant topics, especially employment and social law and represents them before the labour and social court.

In Austria, the Chamber of Labour has a more relevant position than trade unions in day to day HR issues. When it comes to mass redundancies or CBA issues, the unions are more relevant.

Rights and Importance of Trade Unions

Trade unions (“Gewerkschaften”) are active on enterprise level, whereas the works council acts on a company level. Trade unions can be regarded as “combat organisations”, whereas works councils are bound by the duty to peace. Individual employees can join the trade unions if they want. This means that they pay a fee and then can demand legal advice on labour law, wage and salary tax matters, minimum wage as well as defence and representation at labour and social courts.

The works council is entitled to bring trade union members for consultation in all matters. The involvement of representatives of the trade union in meetings between works council and employer is not subject to the employer’s approval. Apart from the trade union’s right to assist the works council, trade union members are allowed to evolve activities of the employees, to do advertisement for membership and to inform employees of their rights.

The employer is obliged to grant the trade union members access to the premises, however only if the employer was duly informed in advance (if possible: one week) and only to the extent necessary for the trade union members to fulfil their tasks. The right to access can also be limited to parts of the company building/premises, where the trade union members actually assist the works council. Trade union members have no general right to access the employer’s premises at any time or any part thereof.

Trade union members are not allowed to interrupt the business or distract the business process.

If issues are discussed that were not on the agenda and if no representatives of the trade union participate in the meetings, the works council might request an adjournment or postponement of the meeting in order to consult with the trade union (Section 58 ArbVG).

The employer also has the right to invite members of the Chamber of Commerce, other interest groups such as the “Industriellenvereinigung” or attorneys-at-law. The employer has to inform the works council in advance if such persons will participate in meetings.

Trade union members have the duty to keep confidential both the personal issues of the employees represented by the works council as well as the trade and business secrets of the company.

Types of Representation

The main representation of employees in Austria is guaranteed by the works council on a company level. A works council can be established in every establishment in which at least five employees with voting rights are permanently employed. The “threshold” for the foundation of a works council is therefore very low.

All persons employed within the framework of a company, including apprentices and home workers, irrespective of age, can be represented by the works council. Executive employees who have a decisive influence on the management of the company, persons employed on a short-term basis for training and educational purposes, and freelancers are not represented by the works council.

Number of Representatives

The size of the work council depends on the number of employees in the business site and range. For example, a company with five to nine employees has one works council member and a company with ten to nineteen employees has two works council members.

Appointment of Representatives

The election procedure is very complicated. The employer has to tolerate the election. The employer has only a few obligations during the election procedure. The election is within the hands and choice of the employees.

Any employee with a minimum age of 18 years who has been working in the company for at least 6 months can be elected as works council member. Anyone standing for election needs a valid election proposal, for which supporting signatures are required. These election proposals must be submitted in writing to the election committee. The works council members are then elected by all employees with a minimum age of 16 for a period of 5 years.

Membership of the works council begins with the acceptance of the election and expires, among other things, when the term of office of the works council ends, the works council member resigns or leaves the company.

Tasks and Obligations of Representatives

The works council represents all employees with the exception of executive employees and has the task of perceiving and promoting the economic, social, health and cultural interests of employees in the company. The aim of the provisions on the works constitution and their application is to achieve a reconciliation of interests for the benefit of the employees and the company.

The works council members shall carry out their activities as far as possible without disturbing operations. They are not authorised to interfere in the management and operation of the company by issuing independent orders.

At the request of the works council, in companies with more than 150 employees, one works council member or – depending on the size – several works council members have the right to be released from work under continued payment of remuneration.

Employees’ Representation in Management

In companies in which a supervisory board has been appointed, the works council may delegate one member as employee representative for every two capital representatives (one-third parity). If the number of capital representatives is uneven, an additional member may be delegated.

If employee representatives have been delegated to the supervisory board, the election requires a double majority: on the one hand, the majority of the entire supervisory board, and on the other hand, the majority of the capital representatives. The membership of employee representatives on the Supervisory Board shall end upon their termination of membership of the works council or their termination by the latter. Otherwise, there is no maximum term of appointment for them.

Other Types of Employee Representative Bodies

Generally, employees in Austria have the right of freedom of association and the right to engage in union activity. However, there is no direct trade union representation in the workplace. Instead, employees are represented by works councils, which are statutorily elected. The Austrian Labour Constitution Act requires the creation of a works council in all businesses employing at least 5 persons subject to a respective request by the employees or a trade union.

Accordingly, provided that the business comprises at least 5 permanent employees (without the senior managers), the legal prerequisite to set up a works council is fulfilled. While trade unions are generally active above the level of the single business and as consultants of the works council, the works council is active on the level of the business itself.

When one business comprises several undertakings, which form an economic entity that is administrated centrally, an additional central works council may be established (Zentralbetriebsrat).

Youth representation: In every enterprise in which at least 5 minor employees (i.e. employees up to their 18th birthday and apprentices up to their 21st birthday) are permanently employed, the youth assembly, the election committee for the election of the youth council and the youth council must be formed. Its tasks are to safeguard the economic, social, health and cultural interests of young employees, to ensure that the regulations applicable to the employment relationship of young workers are observed, to demand measures for the elimination of existing deficiencies or for the prevention of deficiencies that may arise in the future, to participate in the meetings of the works council in an advisory capacity and to make proposals on matters relating to vocational training and continuing vocational training.

Disability representation: In every company in which at least five disabled employees with special needs are permanently employed, these employees must elect a disabled persons’ representative and one or more deputies. The number of deputies depends on the number of beneficiary disabled persons employed in the company.

• for 5 to 14 beneficiary disabled employees: 1 deputy
• from 15 beneficiary disabled employees:              2 deputies
• from 40 beneficiary disabled employees:              3 deputies

The rights of the works council under Austrian law are very broad. In addition, the legal provisions and the terms used by law are very vague and contain a lot of unspecific legal terms. The general problem for the practice is that the law describes the rights of the works council only on a very general level. A lot of interpretation is required (and possible) in applying the relevant provisions. There also is very little case law (especially of the Supreme Court) on the concrete scope and size of the works council’s rights and the limits thereof. It must be decided on a case-to-case basis whether or not the requests of the works council are covered by its participation rights.