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CHSH Newsletter - Changes to Labour Law as of 1 January 2016

Date Published: 1/19/2016

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A number of amendments affecting Austrian labour law that are relevant to almost all employers in Austria entered into force on 1 January 2016. This newsletter should provide you with a brief summary of the most significant and important legislative changes. It should therefore not be deemed a conclusive account of all amendments introduced. If you have further questions regarding the new regulations, the labour law team at CHSH will be happy to advise you at any time.

Greater transparency for all-in contracts (Sec 2g of the Labour Contract Law Amendment Act)

The most important amendment was made to Sec 2g of the Labour Contract Law Amendment Act (Arbeitsvertragsrechtsanpassungsgesetz, AVRAG). This provision states that all employment contracts concluded or notices of employment issued from 1 January 2016, which provide for total pay comprising a basic salary (i.e. the remuneration payable for normal working hours) and other salary components, must specify exactly what the basic salary is. If the employer fails to specify the basic salary, the employee is mandatorily entitled to the basic salary, including excess payments common in the industry and area, that is paid to comparable employees by comparable employers in the area where the work is performed ("actual basic salary").

This amendment mainly concerns the all-in contracts that are so widespread in Austria. To date it has been commonplace for these contracts merely to show a total amount which should compensate employees not only for normal working hours but also for all additional hours worked. As of 1 January 2016, all-in agreements must explicitly specify the basic salary as part of total pay so as to prevent employees being entitled to the basic salary commonly paid in the industry and area where the work is performed. If such entitlement were to arise, this would simultaneously result in the excess payment made to the employee being lower compared with that under the collective agreement; the actual basic salary common in the industry and area will most likely exceed the minimum salary specified in the collective agreement. As fewer overtime hours would consequently be covered by the all-in payment, there is an increased risk of underpayment, which is a criminal offence, in particular in light of the extremely strict anti-wage dumping provisions that have been in force since 1 January 2015.

Stricter monthly factoring and a shorter period for the reimbursement of training costs (Sec 2d para 3 AVRAG)

Agreements on the reimbursement of training costs that are concluded from 29 December 2015 onwards may oblige the employee to reimburse training costs only if the employment relationship is terminated within four years of the completion of such training (previously five years). In specific cases (e.g. extremely cost-intensive and sustainable training programmes), an agreement can be reached with employees under which they are obliged to reimburse such costs, as before, for a period of up to eight years after completing a training programme.

Furthermore, it is mandatory for agreements concluded as of 29 December 2015 that the amount to be reimbursed by the employee is subject to monthly factoring. If the employer completely exhausts its statutory possibilities, an agreement on the reimbursement of training costs is then only possible for a period of four years after completion of the training programme, with the amount to be reimbursed decreasing by 1/48 each month.

Restrictions on post-contractual non-competition clauses (Sec 36 para 2 of the Employee Act and Sec 2c AVRAG)

It is – as before – permissible for parties to agree on post-contractual non-competition clauses. However, the legislator has tightened up the requirements for the validity of such non-competition clauses contained in contracts concluded from 29 December 2015 onwards. Whereas the employee until recently had to earn seventeen times the daily maximum contribution basis (2016: EUR 2,754.00) in the final month of his/her employment relationship pursuant to Sec 45 of the General Social Security Act, this has now been increased to twenty times (2016: EUR 3,240.00). If an employee whose noncompetition clause was agreed after 29 December 2015 earns less than EUR 3,240.00 in the final month of his/her employment relationship, the employer therefore cannot invoke a non-competition clause that had been agreed upon.

If the non-competition clause provides for the imposition of a penalty for non-compliance, the agreement regarding this penalty is valid only insofar as it does not exceed six times the last net monthly salary paid to the employee.

Part-time work for parents now requires a clear reduction in working hours (Maternity Protection Act and Parental Leave for Fathers Act)

The most important amendment affecting the Maternity Protection Act and the Parental Leave for Fathers Act concerns part-time work for parents. Whereas until recently the change of the allocation of working times was already sufficient to allow parents to take advantage of the rules regarding part-time work and consequently benefit from special protection against termination, however as of 1 January 2016 a reduction of working hours is unavoidable. In light of the new rules, parental part-time is only possible if the working hours are reduced by at least 20% but nevertheless amount to no fewer than 12 hours per hour.

Greater protection for foster parents, those on freelance service contracts and in the case of miscarriages (Maternity Protection Act and Parental Leave for Fathers Act)

Foster parents were previously only entitled to parental leave if they had taken a child into their care, without being paid to do so, with the intention of adopting the child. The wording referring to the 'intention' has now been dropped, which means foster parents are now entitled to parental leave even if they do not seek to adopt the child afterwards. This amendment applies to all foster parents whose children were fostered on or after 1 January 2016.

From 1 January 2016, the employment restrictions laid down in the Maternity Protection Act will also apply to mothers on freelance service contracts, as defined in Sec 4 para 4 of the General Social Security Act. Any mother on a freelance service contract whose employment is terminated up to four months after the birth of a child due to pregnancy or an employment restriction can contest this in court. The employer must demonstrate in proceedings that it is highly likely that other motives were a determining factor for the termination.

In future, the special protection afforded under the Maternity Protection Act against termination and dismissal will end four weeks after a miscarriage.

Extension of daily working hours for active travelling time (Section 20b para. 6 of the Act on Working Time)

From 1 January 2016, the daily working hours of an employee may be extended to up to 12 hours if the employee leaves his/her place of work at the behest of the employer with a view to continuing his/her work at another location even though he/she renders services during the journey by driving a vehicle on the orders of his/her employer ("active travelling time"). However, the prerequisite for extending working hours is that driving the vehicle is not one of the principal activities performed by the employee.

Prior to 1 January 2016, it was only possible to extend daily working hours due to passive travelling time.

Duty to inform employees about full-time positions (Section 19d para. 2a of the Act on Working Time)

In accordance with the new Sec 19d para 2 of the Act on Working Time, an employer must inform its part-time employees about vacancies that become available which could lead to them working a greater number of hours. This information can be made available at a suitable location within the business premises that is easily accessible for part-time workers or by disseminating a suitable electronic message or via other suitable means of telecommunication.

For more information:

Mag. Julian Feichtinger, LL.M.
Tel: +43 1 514 35 191

Mag. Barbara Klinger
Senior Attorney
Tel: +43 1 514 35 191

Mag. Susanne Molitoris, LL.M.
Senior Attorney
Tel: +43 1 514 35 191

Mag. Christopher Peitsch
Senior Associate
Tel: +43 1 514 35 191

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Client Successes

Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

In one instance, we were faced with an employment dispute with a former associate in Mexico that had the potential for substantial economic exposure. The matter had been pending for over a year, and we were not confident in the employment advice we had been receiving. I obtained a referral to the ELA counsel in Mexico, who was able to obtain a favorable resolution of the dispute in only a few days. Based on our experiences with the ELA, we would not hesitate to use its many resources for future employment law needs.

American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

Boyd Coffee Company

Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

Hirschfeld Kraemer

Stephen HirschfeldAs an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld

Hollywood Entertainment Corporation

As the Vice President for Litigation & Associate General Counsel for my company, I need to ensure that we have a team of top-notch employment lawyers in place in every jurisdiction where we do business. And I want to be confident that those lawyers know our business so they don't have to reinvent the wheel when a new legal matter arises. With more than 3400 stores and 35,000 employees operating in all 50 U.S. states and across Canada, we rely on the ELA to partner with us to help accomplish our objectives. I have been delighted with the consistent high quality of the work performed by ELA lawyers. I encourage other in-house counsel to use their services, as well.

Ingram Micro

Ingram Micro is the world's largest technology distributor, providing sales, marketing, and logistics services for the IT industry around the globe. With over 13,000 employees working throughout the U.S. and in 35 international countries, we need employment lawyers who we can count on to ensure global legal compliance. Our experience with many multi-state and multi-national law firms is that their employment law services are not always a high priority for them, and many do not have experts in many of their offices. The ELA has assembled an excellent team of highly skilled employment lawyers, wherever and whenever I need them, and they have proven to be an invaluable resource to our company.

Konami Gaming

Our company, Konami Gaming, Inc., is growing rapidly in a very diverse and highly regulated industry. We are aggressively entering new markets outside the domestic U.S., including Canada and South America. I have had the recent opportunity to utilize the services provided by the ELA. The legal advice was both responsive and professional. Most of all, the entire process was seamless since our Nevada attorney coordinated the services and legal advice requested. I look forward to working with the ELA in the future, as it serves as a great resource to the legal community.

Jennifer Martinez
Vice President, Human Resources

Nikkiso Cryo, Inc.

Until recently, I was unaware of the ELA's existence. We have subsidiaries and affiliates throughout the United States, as well as in Asia, the Middle East and Europe. When a recent legal issue arose in Texas, our long-time Nevada counsel, who is a member of the ELA, suggested that this matter be handled by his ELA colleague in Dallas. We are very pleased with the quality and timeliness of services provided by that firm, and we are excited to now have the ELA as an important asset to help us address employment law issues worldwide.

Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

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Former Senior Director of Human Resources

Rich Products

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Ricoh Americas Corporation

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A few years ago, we faced a very tough discrimination lawsuit in Mississippi. We had never had to retain a lawyer there before. I was absolutely delighted with the Mississippi ELA firm. We received an excellent result. They will no doubt handle all of our employment law matters in Mississippi in the future. I have also obtained the assistance of several other ELA firms around the U.S. and have received the same outstanding service. The ELA is a tremendous resource for our company.

Roberts-Gordon LLC

Our affiliated companies have used the Employment Law Alliance in connection with numerous acquisitions, and have always been extremely pleased with our ability to obtain the highest quality legal advice on due diligence issues from jurisdiction to jurisdiction. We have found the Employment Law Alliance firms to be not only first rate with respect to their legal advice but also responsive and timely in assisting us with federal and state law issues critical to our due diligence efforts. We consider the Employment Law Alliance to be an important part of our team.

Rockwell Collins, Inc.

We have partnered with many ELA firms on the development and execution of case management strategies with very positive results. We have been very pleased with the legal advice and counsel provided by the law firms we have utilized who are affiliated with the Employment Law Alliance. The ELA firms we have worked with are customer focused, responsive, and thorough in their approach to handling labor and employment law matters.

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Assistant General Counsel


Sanmina-SCI has facilities strategically located in key regions throughout the world. Our customers expect that we will provide them with the highest quality and most sophisticated services in the marketplace. We have that same expectation for the lawyers with whom we do business. With operations in 17 countries, we need to be certain that we have a team of lawyers working together to address our employment law needs worldwide. The ELA has delivered exactly what it promised-- seamless and consistent high quality services delivered in each locale around the globe. It has quickly become a key asset for our human resources department.


We own, manage, and franchise hotels throughout the U.S. and in more than 90 countries. With more than 145,000 employees worldwide, ensuring that we comply with the complex web of local labor and employment laws in every one of these jurisdictions is a daunting task. The Employment Law Alliance has served as an important resource for us and we have benefited greatly from its expertise and long reach. When a legal dispute or issue has arisen in some far-flung place, Employment Law Alliance lawyers have always provided responsive, practical, and cost-effective assistance.

Wilmington Trust Corporation

Wilmington Trust has used the ELA to locate firms in California, Washington State, Georgia, and Europe. Our experience with the ELA lawyers with whom we have worked has always been one of complete satisfaction and prompt, practical advice.

Michael A. DiGregorio
General Counsel