Individual dismissals under Austrian law

1. Individual dismissals under Austrian law by Univ.-Prof.Dr. Franz Marhold

2. Limited dismissal protection – a cornerstone of Austrian-style „flexicurity“

3. Much appreciated by the European Commission… • 2007 Communication on Common Principles of Flexicurity • Prime example: Austria • Low de facto level of employment protection • High labour market flexibility • Elimination of barriers to job mobility by the severance pay reform • Strong reliance on social partnership • “Relatively little need for employers to take recourse to fixed term contracts” • High employment rate, high participation in lifelong learning, lowest unemployment rate in EU (now 4.2%)

4. General rule: liberty of termination

5. Basics • No need to motivate the dismissal • No specific formal requirements • No generally applicable period of notice • Specific laws • White-collar employees: 1.5–5 months • Collective agreements • No reinstatement in case of non-observance • Severance pay: • New system (since 2003): no direct payment by the employer

6. General dismissal protection(AllgemeinerKündigungsschutz) A collective approach

7. General dismissal protection • In establishments of ≥ 5 employees • Exempt: managerial staff • Central actor: works council • Informed in advance about every dismissal • 1 week for deliberation • Otherwise: dismissal is void

8. Opinion of the works council dismissal can be challenged (within 1-2 weeks)… Where no works council exists: challenge by the employee

9. 2 possible grounds for challenging the dismissal: 1) “Proscribed reasons” (exhaustively enumerated) • Discrimination on grounds of works council / trade union membership etc. • Victimisation • …  Alleviation of the burden of proof

10. 2 possible grounds for challenging the dismissal: 2) “Social unacceptability” • Individual hardship • E.g. older employee with poor prospects on the labour market • Weighed against the employer’s interest in termination • Justification by personal or business reasons • Duty to consider all alternatives before dismissal as a last resort Precondition: ≥ 6 months of seniority

11. Main consequences of the works council’s opinion Consent of the works council  No challenge on grounds of social unacceptability • “Blocking right” of the works council • Friction with Art. 30 EU Charter of Fundamental Rights? Explicit objection by the works council  “Social comparison” • Whom to dismiss among several “eligible” employees? • Employer must choose the individual who would suffer less social hardship

12. Individual challenge (without works council involvement) Introduced for implementing EU directives: Dismissals on grounds of • Gender, age, race etc. • Leaving the workplace in case of danger • Successfully challenged dismissal is invalidated  reinstatement of the employee

13. Termination without Notice (Entlassung)

14. Immediate dismissal If further employment cannot be expected from the employer • “Important reason”: different catalogues for categories of employees • White-collar employees: • Disloyalty or untrustworthiness • Incapability to work • Breach of the prohibition of competition • Non-observance of orders • Persistent refusal to work • Assault or insult of the employer or fellow workers

15. After termination without notice: Immediate information of the works council • 3 days for deliberation • Again: works council’s reaction determines possibilities of challenging the dismissal

16. Extra protection for certain employees (Besonderer Kündigungsschutz)

17. Special dismissal protection • Categories: • Works council members • Pregnant employees • Employees on parental leave • Employees doing military service • Disabled employees • Mechanisms of additional protection • Prior approval of a court / special authority • Justification requirement

18. Thanks for your attention! Institute for Austrian and European Labour and Social Law WU Vienna Augasse 2-6, 1090 Vienna, Austria UNIV.PROF. DR. FRANZ MARHOLD T +43-1-313 36-DW F +43-1-313 36-DW Franz.Marhold@wu.ac.at www.wu.ac.at