What do collective agreements in Austria govern?
This section provides you with a general overview of the terms used in collective agreements and the topics they most frequently contain.
Collective agreements contain many employee rights that are not specified in legislation or not specified in detail, including:
- Minimum wages and salaries, apprenticeship pay
- Annual or regular wage and salary increases
- Wage or salary scheme, including classification, advancement intervals and recognition of prior employment periods
- Allowances or supplements for certain kinds of work
- Christmas bonus and annual leave pay
- Normal working time between 35 and 40 hours weekly
- Overtime supplement amounting to 50% or more, depending on when work is performed (e.g. 100% supplement for working on Sundays or at night)
- Higher base hourly wage for calculating overtime remuneration
- Wage supplements for working at night or on Sundays
- Additional annual leave for workers with disabilities
- Whether 24 and 31 December are days off work
- Whether periods of leave are counted towards severance pay
- Whether periods of leave are counted towards advancement, continued remuneration, notice period and the number of days annual leave
- Entitlement to a certain amount of time off for specified events (relocation, marriage or registration of a partnership, death, birth, business with authorities, etc.)
- Agreements applying to business travel, compensation for expenses, and kilometre allowance
Terms used in collective agreements and typical content
Minimum wages and minimum salaries
Austria has no statutory minimum wages or minimum salaries.
Minimum wages and salaries have to be agreed in collective bargaining between trade unions and associations representing employers.
Wage and salary increases
Pay increases, which normally affect minimum wages and minimum salaries, are negotiated between a trade union and employers’ representatives in collective bargaining. Such increases involve different aspects depending on the sector.
Wage and salary regulations (pay scheme)
The collective agreements specify wage or salary regulations that include general rules for calculating minimum wages or minimum salaries for the various types of work, as well as a pay scheme.
Employment categories or occupational groups
In the collective agreement the minimum wages or minimum salaries are calculated based on certain criteria.
Referring to specific occupational tasks or activities, the schemes for individual employment categories or occupational groups serve as the basis for calculating the pay levels stipulated by the particular collective agreement covering a certain sector.
Criteria used in categorisation
To set minimum wages or minimum salaries in a collective agreement, types of work are classified according to various criteria.
On the one hand this involves a description of the work performed, which sometimes contains specifically designated occupations. In addition, qualification (e.g. training) and job experience play a role.
In the case of white-collar employees, recognition of prior employment periods is another important factor in determining the salary level.
Reclassification and advancement
Many collective agreements include rules governing advancement (Vorrückung) and reclassification (Umreihung) within pay schemes. The important considerations here are the employment period or a change of work.
Advancement refers to an increase of the minimum wage or minimum salary specified by the collective agreement within an employment category; this usually occurs after a specified period of time (e.g. after two years, referred to as a biennial increase - Biennalsprung).
Reclassification means that employees within one pay scheme are moved from one employment category or occupational group to another. This often occurs when the employee changes jobs or after a certain employment period.
Working time is the period from the beginning until the end of work, without counting rest periods during work.
Travel time to or from work is not generally considered working time. Yet in this respect some collective agreements provide for rules that are more beneficial for employees.
Standard working time
Normal or standard working time as specified by law is eight hours per day and 40 hours per week, although many collective agreements stipulate fewer working hours (e.g. 38.5 hours weekly).
Many exceptions exist with regard to how weekly working time is distributed over each of the working days. One example is the arrangement allowing normal daily working time to be extended to nine hours in order to allow a ‘short Friday’ and a longer weekend rest period.
Part-time work is where the stipulated weekly working time is less than the normal working time specified by law or by the collective agreement (e.g. 25 hours per week).
Overtime occurs where employees work longer than the normal working time of 40 hours per week or the normal daily working time of eight hours as specified by law.
Under the Working Hours Act (Arbeitszeitgesetz, AZG), however, normal working time of 40 hours per week or eight hours per day can be distributed differently or extended (e.g. through a flexible working time agreement or by calculating average working time over a reference period).
Employees receive a pay supplement of at least 50% for every hour worked overtime.
Employees agreeing to compensatory time-off in place of a supplement are entitled to 1.5 hours of time in lieu for one hour overtime.
Many collective agreements additionally specify greater supplements for working at night, on holidays and on Sundays.
The basis for calculating the supplements is usually the normal hourly pay rate (some collective agreements have more favourable arrangements here as well).
Extra hours occur where part-time employees work longer than their stipulated normal working hours (e.g. 20 hours weekly as stated in the employment contract) and less than the standard statutory working time (usually 40 hours per week).
Only hours worked beyond the normal statutory working time are considered overtime.
Employees are entitled by law to a supplement of 25% for each extra hour worked.
There are exceptions to this, for example where within a specified three-month period the employee takes time-off (at a ratio of 1:1) to compensate for the extra hours; in this case the extra-hours supplement is not due.
Here too collective agreements may stipulate other rules (e.g. the time from which extra-hours supplements are due).
Where for instance the collective agreement stipulated normal working time of 38 hours per week and 1.5 extra hours as being exempted from the supplement, the same applies accordingly to part-time employees (i.e. 1.5 extra hours are always exempt from the supplement).
Flexible working time (flexitime)
Flexible working time refers to where employees are allowed to decide themselves when they will begin and end their daily working time.
Businesses or organisations with a works council are required to stipulate any flexitime agreements in a works agreement. In the absence of a works council, such arrangements are to be made through written agreements with individual employees.
Working time calculated over a reference period (bandwidth models)
Many collective agreements contain arrangements allowing normal working time to be extended to more than 40 hours per week (e.g. to as much as 44 hours), if within a specified period the average working time does not exceed the normal weekly working time stipulated in the collective agreement (usually 38.5 hours). In other words, more hours are worked in one week and fewer in another to compensate.
No overtime hours are consequently accumulated during the reference period.
Shift work refers to a situation where several employees alternate with one another while working at the same jobs (or ‘share jobs’).
The working times for each shift are required to be laid down in a shift schedule.
Making up working time
To achieve a longer period of time off before or after public holidays, employees can agree with their employers to instead work longer hours on another day of the week.
It is common in practice to make up a working day between a public holiday and a weekend in this way. Yet more than one working day can also be made up (e.g. between Christmas and New Year’s).
Work and rest on public holidays, days off work
When employees are not required to work due to a public holiday, they are entitled to the same amount of remuneration that would normally be due, i.e. if working time had not been lost because of the holiday (referred to as “public-holiday remuneration” - Feiertagsentgelt).
Employees who work on a statutory public holiday either receive, in addition to the aforementioned public-holiday remuneration, payment for the hours worked or agree with their employers on compensatory time-off equal to the hours they worked on the public holiday.
Such a ‘substitute rest day’ must comprise at least one calendar day or 36 hours.
Collective agreements frequently include arrangements for such cases as well.
Days off work
Statutory public holidays in Austria are days off work, and all employees are free from work while continuing to receive pay.
Collective agreements for the individual sectors may define the 24th and 31st of December as holidays.
For more information, refer to What working hours must be observed?
Annual leave year
The annual leave year generally begins on the day when the employee joins the business or organisation (a period of one year in every case). It is usually identical with the working year. The annual leave year can, however, be changed for the business to coincide with the calendar year.
Annual leave remuneration
Annual leave remuneration is the remuneration (i.e. wage or salary) that employees receive during their annual leave.
Employees are entitled to the same amount of remuneration as they would normally be entitled to, i.e. without taking annual leave (lost-work principle - Ausfallsprinzip; remuneration for overtime hours regularly worked is also to be included).
Annual leave remuneration (Urlaubsentgelt) should not be confused with annual leave pay (Urlaubsgeld). Annual leave pay is paid additionally and is a special payment (Sonderzahlung).
Special payments, annual leave pay and Christmas bonus
Special payments are not defined by law but mostly stipulated in collective agreements.
Typical special payments include annual leave pay and Christmas bonus, which are also referred to as the 13th and 14th monthly salaries, or annual leave bonus and Christmas pay.
Annual leave pay and Christmas bonus, which are usually paid out in summer and winter, each amount to about one monthly wage or salary.
Posted or hired-out employees must, however, be paid, together with regular wages, a pro-rated share of special payments for the period they are posted or hired out – normally already with each monthly wage, even if the collective agreement stipulates payment of a total amount at a later date.
If an employee is posted to Austria only for one day at a time, special payments are also due on a pro-rata basis for those days.
Where in accordance with EU Regulation (EC) No 883/2004 employees are covered by social security in Austria, in the event that illness prevents an employee from working, the employer is required to pay continued remuneration at the level defined in provisions of Austrian law for a specified period.
Employees on sick leave are generally entitled to remuneration for six weeks.
Entitlement increases to eight weeks after one year of employment, to ten weeks after 15 years and to twelve weeks after 25 years.
Collective agreements may stipulate more beneficial terms than those defined by law.
Employees may be entitled to additional pay elements in the form of supplements or allowances.
An example of supplements are those required to be paid for working under certain conditions: overtime and extra hours, work on Sundays and public holidays, and in retail trade during extended opening hours.
Some are laid down in law, others only in collective agreements.
Allowances are usually defined in collective agreements and not in any legislation; examples include:
- Allowances for working outside the business premises (e.g. assembly allowance)
- for difficult working conditions or
- night work.