Lansky

The labour market in Austria has been affected by the coronavirus crisis to an unprecedented extent. Unemployment figures are higher than in the year after the Second World War, however, over one million jobs could be preserved (for the time being) by the model of corona short-time work. 

The importance of the ‘coronavirus-related reduced working hours’ (RWH) for the business location can hardly be overestimated. It was recently introduced on 16 March 2020 and it is currently securing jobs for over 1.2 million people in Austria. Since March, more than 95,000 entrepreneurs have submitted applications for funding under the newly introduced RWH model. Furthermore, the Federal Government has increased the financial budget for this RWH alone to 8.8 billion euros. As lawyers, we have worked with the Public Employment Service Austria (AMS) and the companies concerned to break completely new ground in implementing the new requirements. If that weren’t enough, the two weeks following 16 March 2020 were marked by developments coming thick and fast, with conditions, deadlines and forms changing daily. Staying in close contact with the authorities and our colleagues has proved to be very effective, as has avoiding taking hasty steps and actively participating in designing the model. In some cases, this also made it possible to clarify questions that the authors of the directives had not even asked themselves, given the time pressure they were under. The same applies to the new phase of extending the model for a further 3 months.

Employment law solutions that would otherwise be the norm must be seen in a different light during the coronavirus pandemic, as the following examples from our everyday advisory work show:

• Protecting jobs is a priority. Even within the framework of the RWH that has been agreed, however, there may be cases where it is inevitable that an individual’s contract of employment is terminated for personal reasons. Contrary to widespread assumptions, this is very well possible. Nevertheless, current regulations require that another employee be hired instead to take the place of the employee who has been dismissed (which would otherwise have been unthinkable and is overlooked by many employers), as reduced working hours go hand-in-hand with a guaranteed maintenance of the number of employees.
• Tourism, in particular, is completely paralysed around the globe, and employees are asking themselves whether they can unilaterally ‘put back’ leave that has already been agreed or registered. The argument that it would be unreasonable for the employee to take leave in such limited circumstances would be a suitable one. However, this argument will not apply in practice, because it is impossible to calculate how long these measures will last, and this will adversely affect both employers and employees in the same way. In this unique year, people will have to be prepared to improvise and holiday within Austria. If, on the other hand, the company in question had to be closed down due to official requirements, a new provision in the Austrian Civil Code (ABGB) even permits the employer to unilaterally order leave (which is also a new addition to our legal system).
• Adjusting the amount of work to a minimum level of 10% of the usual workload enables companies to only pay for the work actually performed. Employees nevertheless receive between 80% and 90% of their net salary from “pre-Corona times”, whereby the difference in salary including the associated social security contributions is covered by the state as a subsidy. This is a very generous model by international standards. Fortunately, there are cases in which capacity is being used to a greater extent than expected, which was also mentioned in the RWH application. More work is allowed and desired, the subsidy is simply adjusted to this within the framework of the payroll, so overtime payments are not necessary – as originally feared by companies. However, it is advisable to address this issue clearly and effectively in agreements on reduced working hours with the individual employees or the works council in question. This ensures that the limit stated (of 10%, say) can, of course, be exceeded if necessary. If this is not included in the original agreement, clarification is recommended when agreeing to extend the RWH from the beginning of June.
• The coronavirus situation is bringing employers and employees closer together. The more immediate communication is in part amazingly enhanced by the higher number of video conferences within teams. The value of direct agreements between employers and employees is also increasing. It is quite exceptional, for example, that RWH agreements are possible even if the works council (in itself the vote of the workforce) is against them. Individual protection is currently so important that employees can help the company implement reduced working hours by means of individual agreements, even if the works council is opposed to this.
• However, the importance of these individual agreements is also evident when things stop going according to plan. Numerous companies that applied for RWH are being confronted with changed parameters as the crisis worsens. It may become evident that the RWH model is not tenable, despite the best of intentions, and that it is inevitable that some employees are made redundant. While a RWH application can be withdrawn at any time so that notice of termination can be given, this does not render the agreements made with the employees obsolete. Here, it is necessary to seek agreement, gain insight and consider all the options when it comes to mutual obligations of loyalty to find a good solution that will enable the company to continue to exist. Amicable terminations with promises of re-employment can be the solution, provided they are properly structured. 

This phase where our everyday working life is determined by new rules is likely to last much longer than expected. Employees with children continue to face enormous challenges until the end of the school year, with innovative and legally compliant solutions for working from home being in demand wherever the industry in question allows. That said, the new situation also shows how strongly a sense of duty, mutual loyalty between employers and employees and well thought-out individual agreements help with overcoming the present economic crisis phase. We are happy to assist our corporate clients and private clients alike with navigating the employment law challenges during the coronavirus pandemic with legal certainty

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