Co-funded by the European Union

Austria reform on employment law

  • In Austria, a new collective agreement will enter into force at the end of 2021 for all employees of companies in the trade sector
  • The agreement will reform the salary schedule and aims at uniformising and reducing the salary levels, and “to create a modern scheme of employment groups, obtain more legal certainty in job grading

According to the new collective agreement, each individual employee must be assigned to a new employment group and reclassified in line with decreased salary schedules (from eight to one) and increased employment groups (from two to eight). The employment groups relate to skills, qualifications and responsibility level and will be reformed as follows: “Each employment group has been assigned exemplary reference functions (typical activities) based on seven working spheres (procurement, sales & distribution, commercial & administrative services, marketing & communication, logistics, technical service, IT). Nevertheless, the final criterion for classification is the description of the employment group, with delimiters along the lines of autonomous working, responsibilities, authorisations, social skills, technical know-how and qualification requirements”.

The change must be implemented altogether in the company on the date established with the company union. In the absence of an agreement or work council, the company can set the date and has to inform the employees with 3 months prior notice.

In practice this has repercussions on the minimum wage to be paid to employees as “employees of the previous employment groups 1 to 6 must be assigned to employment groups A to H within the new employment group scheme, depending on their activities. They are classified in the next higher minimum salary of the relevant employment group under the collective bargaining agreement, where previous years of service are of no relevance – the employee will always be assigned to the first year of the new level. Such increases in the minimum salary may be credited against existing (non-earmarked) overpayments”.

Through the reform there will be also an alignment of notice period between white-collars and blue-collars, to be implemented as of 1 July 2021 instead of 1 January 2021 as initially planned.