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Legal Innovations in Austrian Employment Law
Publication | Update:
Jul 2024
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As of March 28, 2024, significant changes to the Employment Contract Law Amendment Act (AVRAG) have come into effect, directly impacting both employers and employees in Austria.
a. Adaptation of the Provisions on the Employment Note
The regulations on the employment Note were amended in the General Civil Code (ABGB), the Employment Contract Law Amendment Act (AVRAG), the Temporary Employment Act (AÜG), the Domestic Servants and Domestic Workers Act (HGHAG), the Home Work Act (HarbG) and the Agricultural Labor Act 2021 (LAG).
The mandatory minimum information in the employment reference has been extended to include the company's registered office, a brief job description, overtime pay, the type of salary payment, the duration and conditions of the probationary period and a reference to the termination procedure. The reference must now be issued immediately after the start of employment, even for employment relationships lasting less than one month.
In implementing the EU directive, a penalty provision was established concerning the non-issuance of the employment note. The employer faces an administrative fine of EUR 100 to 436 per employee who did not receive an employment note. If more than five employees are affected or if the employer has been fined in the last three years, the fine will be EUR 500 to EUR 2000. For more than five employees, the employer commits only one administrative offence within the increased penalty framework, regardless of the number of employees affected. The employer can avoid the administrative penalty by issuing the employment note afterwards and showing minor fault, even after the initiation of the penalty procedure.
b. Obligation to Cover Costs for Training and Further Education § 11b AVRAG
A new regulation has been introduced in the AVRAG, obliging the employer to cover certain training and further education costs of the employee, provided the training is a prerequisite for performing the contractually agreed activity according to legal provisions and the costs are not covered by third parties. The training time is also to be recognised by the employer as working time.
c. Establishing the Right to Multiple Employment § 2i AVRAG
The right to multiple employment is now legally anchored in the AVRAG and the LAG. However, the non-competition clause enshrined in the Salaried Employees Act (AngG) will not be affected.
In the future, the employee will be entitled to take on additional employment alongside their main employment. In certain cases, however, the employer can require the employee to refrain from additional employment if it contradicts working time regulations or could harm the existing employment relationship.
It should be noted that multiple employment can lead to the shifting of social security jurisdiction out of Austria, especially if the employee resides in an EU country and has secondary employment there that comprises 25% or more of their total working time.
In addition to the central changes regarding the employment note, the obligation to cover costs and multiple employment, some accompanying measures were be implemented in the AVRAG and LAG:
d. Protection Against Motivated Dismissal
Employees are protected against dismissal due to the withholding of a reference or due to permissible multiple employment.
e. Obligation to Justify Dismissal
The obligation for the employer to give reasons for dismissal has been extended to cases relating to the failure to issue a reference, the employee's rights arising from training, and further training measures and permissible multiple employment. In the event of a dismissal relating to one of these aspects, the employee may request a written justification from the employer within five days of receipt of the dismissal. The employer is obliged to provide a written justification within five days of receiving the request.
f. Prohibitions on Discrimination
The existing ban on discrimination now also applies to the issuing of the employment note, the exercise of permissible multiple employment, and participation in training and further education measures.
Find more information on employment law in Austria with LeitnerLaw's contribution to ICLG - Employment & Labour 2024. For further updates, check out LeitnerLaw's briefing: Changes in Parental Leave and Care Duties under Austrian Employment and Labour Law.
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Objectives and Study Scope
This study has assimilated knowledge and insight from business and subject-matter experts, and from a broad spectrum of market initiatives. Building on this research, the objectives of this market research report is to provide actionable intelligence on opportunities alongside the market size of various segments, as well as fact-based information on key factors influencing the market- growth drivers, industry-specific challenges and other critical issues in terms of detailed analysis and impact.
The report in its entirety provides a comprehensive overview of the current global condition, as well as notable opportunities and challenges.
The analysis reflects market size, latest trends, growth drivers, threats, opportunities, as well as key market segments. The study addresses market dynamics in several geographic segments along with market analysis for the current market environment and future scenario over the forecast period.
The report also segments the market into various categories based on the product, end user, application, type, and region.
The report also studies various growth drivers and restraints impacting the market, plus a comprehensive market and vendor landscape in addition to a SWOT analysis of the key players.
This analysis also examines the competitive landscape within each market. Market factors are assessed by examining barriers to entry and market opportunities. Strategies adopted by key players including recent developments, new product launches, merger and acquisitions, and other insightful updates are provided.
Research Process & Methodology
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We leverage extensive primary research, our contact database, knowledge of companies and industry relationships, patent and academic journal searches, and Institutes and University associate links to frame a strong visibility in the markets and technologies we cover.
We draw on available data sources and methods to profile developments. We use computerised data mining methods and analytical techniques, including cluster and regression modelling, to identify patterns from publicly available online information on enterprise web sites.
Historical, qualitative and quantitative information is obtained principally from confidential and proprietary sources, professional network, annual reports, investor relationship presentations, and expert interviews, about key factors, such as recent trends in industry performance and identify factors underlying those trends - drivers, restraints, opportunities, and challenges influencing the growth of the market, for both, the supply and demand sides.
In addition to our own desk research, various secondary sources, such as Hoovers, Dun & Bradstreet, Bloomberg BusinessWeek, Statista, are referred to identify key players in the industry, supply chain and market size, percentage shares, splits, and breakdowns into segments and subsegments with respect to individual growth trends, prospects, and contribution to the total market.
Research Portfolio Sources:
Global Business Reviews, Research Papers, Commentary & Strategy Reports
M&A and Risk Management | Regulation
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The future outlook “forecast” is based on a set of statistical methods such as regression analysis, industry specific drivers as well as analyst evaluations, as well as analysis of the trends that influence economic outcomes and business decision making.
The Global Economic Model is covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes,
financing, the labour market and infrastructure.
We aim update our market forecast to include the latest market developments and trends.
Review of independent forecasts for the main macroeconomic variables by the following organizations provide a holistic overview of the range of alternative opinions:
As a result, the reported forecasts derive from different forecasters and may not represent the view of any one forecaster over the whole of the forecast period. These projections provide an indication of what is, in our view most likely to happen, not what it will definitely happen.
Short- and medium-term forecasts are based on a “demand-side” forecasting framework, under the assumption that supply adjusts to meet demand either directly through changes in output or through the depletion of inventories.
Long-term projections rely on a supply-side framework, in which output is determined by the availability of labour and capital equipment and the growth in productivity.
Long-term growth prospects, are impacted by factors including the workforce capabilities, the openness of the economy to trade, the legal framework, fiscal policy, the degree of government regulation.
Direct contribution to GDP
The method for calculating the direct contribution of an industry to GDP, is to measure its ‘gross value added’ (GVA); that is, to calculate the difference between the industry’s total pretax revenue and its total boughtin costs (costs excluding wages and salaries).
Forecasts of GDP growth: GDP = CN+IN+GS+NEX
GDP growth estimates take into account:
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Market Quantification
All relevant markets are quantified utilizing revenue figures for the forecast period. The Compound Annual Growth Rate (CAGR) within each segment is used to measure growth and to extrapolate data when figures are not publicly available.
Revenues
Our market segments reflect major categories and subcategories of the global market, followed by an analysis of statistical data covering national spending and international trade relations and patterns. Market values reflect revenues paid by the final customer / end user to vendors and service providers either directly or through distribution channels, excluding VAT. Local currencies are converted to USD using the yearly average exchange rates of local currencies to the USD for the respective year as provided by the IMF World Economic Outlook Database.
Industry Life Cycle Market Phase
Market phase is determined using factors in the Industry Life Cycle model. The adapted market phase definitions are as follows:
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The Global Economic Model
The Global Economic Model brings together macroeconomic and sectoral forecasts for quantifying the key relationships.
The model is a hybrid statistical model that uses macroeconomic variables and inter-industry linkages to forecast sectoral output. The model is used to forecast not just output, but prices, wages, employment and investment. The principal variables driving the industry model are the components of final demand, which directly or indirectly determine the demand facing each industry. However, other macroeconomic assumptions — in particular exchange rates, as well as world commodity prices — also enter into the equation, as well as other industry specific factors that have been or are expected to impact.
Forecasts of GDP growth per capita based on these factors can then be combined with demographic projections to give forecasts for overall GDP growth.
Wherever possible, publicly available data from official sources are used for the latest available year. Qualitative indicators are normalised (on the basis of: Normalised x = (x - Min(x)) / (Max(x) - Min(x)) where Min(x) and Max(x) are, the lowest and highest values for any given indicator respectively) and then aggregated across categories to enable an overall comparison. The normalised value is then transformed into a positive number on a scale of 0 to 100. The weighting assigned to each indicator can be changed to reflect different assumptions about their relative importance.
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The principal explanatory variable in each industry’s output equation is the Total Demand variable, encompassing exogenous macroeconomic assumptions, consumer spending and investment, and intermediate demand for goods and services by sectors of the economy for use as inputs in the production of their own goods and services.
Elasticities
Elasticity measures the response of one economic variable to a change in another economic variable, whether the good or service is demanded as an input into a final product or whether it is the final product, and provides insight into the proportional impact of different economic actions and policy decisions.
Demand elasticities measure the change in the quantity demanded of a particular good or service as a result of changes to other economic variables, such as its own price, the price of competing or complementary goods and services, income levels, taxes.
Demand elasticities can be influenced by several factors. Each of these factors, along with the specific characteristics of the product, will interact to determine its overall responsiveness of demand to changes in prices and incomes.
The individual characteristics of a good or service will have an impact, but there are also a number of general factors that will typically affect the sensitivity of demand, such as the availability of substitutes, whereby the elasticity is typically higher the greater the number of available substitutes, as consumers can easily switch between different products.
The degree of necessity. Luxury products and habit forming ones, typically have a higher elasticity.
Proportion of the budget consumed by the item. Products that consume a large portion of the
consumer’s budget tend to have greater elasticity.
Elasticities tend to be greater over the long run because consumers have more time to adjust their behaviour.
Finally, if the product or service is an input into a final product then the price elasticity will depend on the price elasticity of the final product, its cost share in the production costs, and the availability of substitutes for that good or service.
Prices
Prices are also forecast using an input-output framework. Input costs have two components; labour costs are driven by wages, while intermediate costs are computed as an input-output weighted aggregate of input sectors’ prices. Employment is a function of output and real sectoral wages, that are forecast as a function of whole economy growth in wages. Investment is forecast as a function of output and aggregate level business investment.
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