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Workplace Representation

Employee representation the private sector in in Austria is through the works councils, with similar bodies in the public sector. By law they can be set up in all workplaces with at least five employees, although in reality they are rare in smaller workplaces. Works councils have important information and consultation rights, which amount to an effective veto in a few areas.

Workers in Austria have a clear legal right to representation in all but the smallest workplaces. Provided there are at least five employees in a workplace, private sector employees can set up a works council (Betriebsrat), which represents all employees.

 

There is a similar structure of workplace representation in the public sector, although the details vary between the central government and Austria’s nine federal states, as well for the Austrian post office and railways. In central government, the body representing employees at the workplace is known as an office committee (Dienststellenausschuss), although the threshold for setting it up is 20 employees rather five for a works council.

 

In practice very few of the smallest workplaces have works councils. A survey published in 2006 estimated that just 3% of private sector workplaces with between five and 10 employees had a works council, and just 6% of those with between 11 and 19. However, the proportion increases with the size of the workforce. In workplaces with between 20 and 49 employees, just over a quarter (27%) had a works council, as did a majority of private sector workplaces with 50 or more employees. The proportion with a works council rises to 87% for workplaces, with between 200 and 499 employees, and 100% of those with 500 or more. The overall average for all workplaces was 14%.[1] A separate study, based on the 2013 European Company Survey, which only looks at workplaces with 10 or more employees, found that 47% had a works council or a public sector equivalent, again with the percentage increasing in larger workplaces.[2]  

 

The works council is not directly a trade union body. It is elected by all employees and non-trade unionists can also stand. But in most cases the unions play a crucial part in its effective operation and the unions estimate that 90% of works council members are union members.[3] The unions can be invited in to give advice, and in certain circumstances they can play a key role in initially setting up the works council and also offer support, such as training, information, legal and economic advice.

 

The reality of union influence over works councils is reflected in the fact that unlike in other countries where the works councils have similar powers, such as Germany or the Netherlands, it is very rare for there to be another separate trade union structure in the workplace. Works councils are the basic unit for union work. Its members distribute union material and they play an active role in union campaigns and in mobilising and recruiting new union members. 

 

In addition to the works council the Austrian system provides for the setting up of a separate youth council (Jugendvertrauensrat – JVR)   to represent young workers. This can be set up in any workplace where there are at least five employees aged under 18 (or under 21 if they are apprentices) and the members are elected for two years. However, the government of the centre-right ÖVP and the far-right FPÖ, elected in 2017, has stated that it will abolish the youth council and reduce the age limit to stand and vote in works council elections (see below) from 18 to 16.

 

In addition, when at least five people with disability are employed in a workplace, a representative for disabled workers (Behindertenvertrauensperson) and a deputy should be elected. This goes up to two deputies when there are at least 15 disabled workers in the workplace. The role of these representatives is to take up the concerns of disabled and chronically ill employees by working with the works council.

 

Numbers and structure

 

Employees have the right to set up a works council in all workplaces with at least five employees (see table).

 

Number of employees

Number of works council members

5-9

1

10-19

2

20-50

3

51-100

4

101-200

5

Above 200, the number of works council members increases by one for every 100 employees or part thereof until 1,000, after which it increases by one for every 400 or part thereof

 

With a few exceptions (see below) all employees should be counted in calculating these numbers, including part-time employees, those on very limited hours, workers on unpaid leave and those undertaking military or civilian service or training.  Agency workers should also be included, provided that they have been (or will be) in the workplace for at least six months and the employer where they work is responsible for some employer-style functions, such as agreeing holiday arrangements.

 

The groups who should not be counted are:

  • those who are not classed as employees (senior managers with a substantial influence on the running of the business;
  • individuals without an employment contract whose presence in the business is for other reasons, such as medical treatment, short-term release from prison or charitable work);
  • homeworkers; and
  • close relatives (such as spouses, parents, and grandparents, children and grandchildren) of the owner. 

 

The works council consists of representatives of the workers – there is no management involvement – and in most cases works councils can be either set up for all employees or separately for manual and non-manual workers, although there are government plans to remove this division. If there at least four works council members, in other words if there are more than 50 employees, one of them can be an external trade union representative, who is not employed at the workplace. In practice this is very rare.

 

The works council should meet at least once a month and should have a joint meeting with the employer at least once every three months. This joint meeting can be monthly if the works council wishes. Where there are separate works councils for manual and non-manual workers, they come together in a works committee (Betriebsausschuss), which also meets monthly.

 

Tasks and rights

 

The legislation states that the purpose of the employee representation structure through the works council is to reconcile potentially opposing interests “for the benefit of the employees and the company”.[4]

 

It sets out a series of powers held by the works council. These are:

  • monitoring that the employer is acting in accordance with the relevant legislation and the applicable collective agreements;
  • intervening in all areas which concern employee interests, with the ability to call on the employer or external bodies to take action to address the works council’s concerns;
  • being informed by the employer of issues, which might affect employees’ economic, social health or cultural interests;
  • being consulted by the employer at least once every three months, with the ability to ask a trade union representative to take part where important changes affecting the workforce are planned;
  • being consulted on health and safety issues, including on the appointment or dismissal of health and safety staff, where the works council has an effective veto (see health and safety pages);
  • promoting policies relating to women and work-life balance at the workplace; and
  • setting up and running welfare institutions for employees and their families. (Works council are often involved in organising a range of cultural and social activities, such as works outings, as well as helping individual employees with problems outside the workplace.)   

 

In addition, the legislation sets out the works council’s right to involvement (Mitwirkung) in three areas, and it is these which provide the works council with its clearest opportunity to influence developments at the workplace. The three areas are:

  • social issues, which cover the concerns of the whole workforce;
  • personnel issues, which affect individual employees; and
  • economic issues, which relate to how the company is run.

 

The powers of the works council are generally greatest in social issues, slightly less in personnel issues, and much less in economic issues.[5] In some cases, the works council has a veto – the employer cannot act without signed agreement with the works council (Betriebsvereinbarung); in other cases the agreement of the works council can be replaced by the decision of an arbitration body (Schichtungsstelle); and in some cases the works council is simply consulted or just informed.

 

The social areas where the employer requires the agreement works council before acting are:

  • the introduction of a workplace disciplinary procedure;
  • the introduction of detailed staff questionnaires that go beyond questions collecting general information on individuals and their technical skills;
  • the introduction of monitoring and surveillance systems, where they affect human dignity; and
  • the introduction of payment systems, based on piece rates or some other form of performance measurement, which can be statistically assessed.

 

In all these areas, if the works council does not agree, the company cannot act. It is not possible to take the issue to arbitration.

 

Where personal data is automatically collected and where data is used for personal evaluation, the agreement of the works council must again be sought. However, in these cases, if the works council does not agree, the employer can take the issue to arbitration, and a decision by the arbitration body has the same effect as an agreement with the works council.

 

There are also a series of social areas, where the employer can act without the agreement of the works council. However, the works council can ask that an agreement be reached, and if this is not possible take the issue to arbitration. (The employer also has the right to ask for arbitration in these cases.) The key areas where the works council has these rights are:

  • work rules affecting employees’ general behaviour in the workplace, examples could be those relating to alcohol, or the arrangements for reporting sickness;
  • working time arrangements, in particular normal starting and finishing times;
  • issues relating to the payment of wages;
  • arrangements for the use of agency workers;
  • the operation of company training and education institutions and company welfare structures, like holiday homes or canteens;
  • the use of company premises and equipment, such as company cars or company telephones;
  • measures to reduce the impact of night shifts or arduous work; and
  • measures to prevent, avoid or mitigate the impact of changes in the business.

 

This last area, covering changes to the business, only applies to workplaces with at least 20 employees, but is one of the works council’s most important rights as it opens the way to the negotiation of a so-called “social plan”, under which jobs can be saved and compensation can be paid, where major changes are foreseen. If the employer refuses to reach agreement on this, the works council can take the issue to arbitration.

 

As well as these areas, the legislation allows the works council to negotiate agreements with the employer in a wide range of other social areas, including, holiday arrangements, expenses, work organisation, pension arrangements and measures to improve the position of women. However, these agreements are entirely voluntary and do not provide for the possibility of taking the issue to arbitration. 

 

Works councils are not primarily involved in negotiations on pay which are at industry level. However, in some cases works councils negotiate additional improvements as well as dealing with grading structures.    

 

In the area of personnel issues, which the legislation defines as those affecting individual employees, the works council has influence in a wide range of circumstances. The most significant are those relating to an employee’s dismissal, where the law varies depending on where the dismissal is immediate or with notice.

 

Where the dismissal is not immediate, the works council must be informed, if not the dismissal is unlawful. The works council has a week to respond, during which period it can ask for a consultation with the employer. The works council can challenge the employer’s decision, either because the reason for the dismissal is unjustified, for example because the individual is being dismissed for union membership, or because of the social consequences for the individual employee being dismissed.  (This social consequences argument can only be used in companies employing more than 20 people and where the individual concerned has at least six months’ service.) In both cases, the issue goes to the labour and social court to decide, and where the social consequences argument is being presented, the court must assess the impact of the dismissal on the individual against the impact of not dismissing the individual on the company. The individual being dismissed can also challenge the dismissal in the court, but the backing of the works council is important, as without it the court cannot compare the circumstances of the individual being dismissed with those who are keeping their jobs.       

 

In cases of immediate dismissal, typically for severe misconduct such as theft, the works council must be informed in three days and can again challenge the decision. However, the immediate dismissal is not unlawful if the employer fails to inform the work council on time.

 

Other personnel areas where the works council has significant powers include:

  • disciplinary sanctions on an individual employee, which cannot be imposed without the works council’s agreement;
  • permanent transfer of an employee to a less favourable position in the company, which also requires the works council’s agreement, although the employer can ask for the court to decide if the works council refuses;
  • appointments, where the works council must be informed, including being given details of the tasks to be undertaken, the pay and the length of the probation period (it should also be informed of plans to take on agency staff); and
  • promotions, where the works council should be informed and has a right to be consulted if it requests this.

 

In contrast to its powers in social and personnel areas, the works council has a much more limited range of rights on economic issues.  It must be informed about the economic position of the company, including its financial position, as well as future developments. This includes information on production, orders, sales in terms of both their volume and value, investment plans and other measures intended to improve the company’s competitiveness. The works council also has the right to be consulted on these issues and is encouraged in the legislation to make its own proposals. The company is also required to provide the works council with a copy of the annual accounts.

 

The works councils should be particularly involved where changes to the workplace/company are planned, such as: closure or partial closure; moving the business or part of the business; a merger with another company; rationalisation, the introduction of new working methods; or changes in the business’s legal form. Appropriate information should be provided to the works council, including detailed information on employee numbers if a closure is planned, to allow the works council to form an opinion on the proposal and ask for consultation if necessary.

 

Where at least 20 employees are employed and the changes involve important disadvantages for the employees, the works council can ask the employer to agree measures which limit or mitigate the impact on employees –in other words draw up what is known as a “Social Plan – and is able to take the issue to arbitration if the employer is unwilling to reach agreement. (This possibility mirrors the works council’s rights in the social area – see above.)

 

In larger workplaces, those with 200 employees or more, where the works council considers that the planned changes or other measures could be damaging to the workforce, it has three days to raise objections. If the plans involve closures, the works council can require that their implementation is halted for four weeks and, if there is no agreement within a week, it can call for a special arbitration committee to be set up to decide the issue. In even larger workplaces, those with 400 employees or more, the issue can be taken further to the national economic committee.

 

The presence of works council members on the supervisory board of some companies (see section on board-level employee representation) is also seen as one of the works council’s rights in economic issues.

 

Election and term of office

 

Works council members are elected by the whole workforce on the basis of lists. In smaller companies – those with fewer than 101 employees – candidates must be supported by at least twice the number of signatures as there are works council members. In larger companies, fewer signatures per works council place are needed. Often there will only be one list but there may sometimes be several, normally based around competing individuals. In very large workplaces there may be lists linked to the different political factions in the Austrian trade union movement, the ÖGB.

 

The term of office is five years (four years for works councils set up before 31 December 2016).

 

Protection against dismissal

 

Members of the works council can only be dismissed with the approval of the labour court, and the court will only approve their dismissal in very tightly defined circumstances. For example, in the case of the permanent closure or reduction in the size of a workplace, a works council member may only be dismissed where the employers is able to provide proof that he or she could not be employed (even in another location of the same company) without significant damage to the employer.

 

More generally works council members must not be disadvantaged because of their role.

 

Time off and other resources

 

Works council members have the right to the paid time off necessary for them to represent the employees, and in larger workplaces one or more members spend all their time on works council duties. In workplaces with 150 to 700 employees there is one full-time works council member; 701 to 3,000 - two; more than 3,000 - three; with one extra for every additional 3,000.

 

The employer is also required to provide the works council with an office and the necessary office materials. The extent of this will depend on the size of the workplace. In large workplaces the employer may also provide a paid administrative worker for the works council.

 

As part of its right to information, the works council is entitled to the appropriate specialist literature and can be entitled to make use of an external experts, for example in relation to the accounts or the introduction of new technology.    

In addition to the resources provided by the employer, the works council can collect funds from the employees, who must first have agreed this at a works meeting. The amount collected in this way, which is largely used for social events like works outings, cannot be more than 0.5% of each employee's gross pay.

 

Training rights

 

Each works council member has the right to up to three weeks and three days’ training leave during their five-year period in office. (Previously three weeks during a four-year period of office.) In workplaces with fewer than 20 employees this time off is unpaid, but in larger workplaces the employer must pay the works council member during training. Where there is a particular reason, for example, for additional health and safety or information technology training, this period can be extended to five weeks. In workplaces with more than 200 employees, one works council member can also have up to one year's unpaid training leave.

 

the courses must either be provided directly by appropriate employee or employer bodies (the unions, the chambers of labour and the economic chambers) or be courses these bodies have approved. The courses must transmit knowledge which is useful for the participants’ role as works council members. The employer must be given at least four weeks’ notice of each period of training and the date of the training should be jointly agreed.  

 

Representation at group level

 

In cases where a business consists of several workplaces but operates as a single economic unit, a “central works council” (Zentralbetriebsrat) should be set up. This is intended to provide effective employee representation at the level at which decisions, particularly on economic issues, are being taken. It is a directly elected body with four members in companies with up to 1,000 employees, and an extra member for each additional 500 employees up to 5,000 in total, and then one for each additional 1,000 above 5,000.

 

It is also possible to set up a works council at group level in a group composed of several different companies, if the central works councils themselves decide to do so. (Two-thirds of the central works council members, representing more than half the employees must vote in favour of it being set up.) However, in contrast to the directly elected central works council, this “group works council” (Konzernbetriebsrat) is made up of delegates, on the basis of two delegates for each company with up to 500 employees, with an additional delegate for each 500 employees or part thereof. The purpose of the group works council is to represent the common interests of the employees in the group.

[1] Betriebliche Interessenvertretung in Österreich by Christoph Hermann and Jörg Flecker, FORBA Schriftenreihe 1/2006

[2] Mitbestimmung in Betrieb: Ergebnisse des European Company Survey für Österreich by Bettina Stadler, FORBA Forschungsbericht 2/2017

[3] Betriebsrat – Personalvertretung Rechte und Pflichten by Gottfried W. Sommer and Sandro Beer, ÖGB/AK Österreich, 2016

[4] Arbeitsverfassungsgesetz, §39 (1)

[5] For more details see Betriebsrat – Personalvertretung Rechte und Pflichten by Gottfried W. Sommer and Sandro Beer, ÖGB/AK Österreich, 2016

L. Fulton (2019) Nationan Industrial Relations, an update. Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.