Home / National Industrial Relations / Countries / Austria / Board-level representation

Board-level representation

Employee representation at board level is widespread in Austria, with the works council choosing a third of the members of the supervisory board from its own ranks.

The works council has the right to choose one third of the representatives of the supervisory board – the body which oversees the action of the executive board which runs the business on a day to day basis – in many of Austria’s largest companies. This right applies to all public limited companies (AGs) and most limited companies (GmbH) with at least 300 employees. (Limited companies which have fewer than 500 employers and are part of a group which has a supervisory board are not required to have one themselves.) So-called “ideological companies” – companies whose purposes are primarily political, religious, educational or artistic, or produce news or comment, are excluded from the obligation to have employee representatives on their supervisory boards. There were 1,507 public limited companies in Austria at the end of 2015.[1]  There are no similar figures for the number of limited companies required to have employee representatives on the supervisory board.

 

These employee representatives on the board are chosen by the group works council, where this exists, and then the central works council or, if there is only one workplace, the works council. They must be works council members and employees of the business. In most areas they have the same rights and duties as other supervisory board members, although they are not paid for this work. The exceptions relate to relations with the management board. The appointment and dismissal of members of the management board requires a decision by majority of the shareholder representatives on the supervisory board not just an overall majority, and their pay can be determined in a sub-committee from which employee representatives are excluded. (Employer representatives continue to have their full rights if the pay of management board members is decided in the full supervisory board.)

Employee representatives on supervisory boards have the same term of office as those representing shareholders. This is limited by legislation to a period ending at the annual general meeting following four full financial years in office. As supervisory members are normally appointed at the annual general meeting when the financial year has already begun, this first part-year does not count towards the total and neither does the period between the end of the fourth year and the next annual general meeting. In effect, therefore, the period of office is five years.

 

In an attempt to increase the proportion of women at the top of companies, since the start of 2018 there have been new rules on the proportion of both sexes in supervisory board, and these also apply to employee representatives. They state that in companies quoted on the stock exchange as well as in companies which regularly have more than 1,000 employees, at least 30% of the employee representatives must be a different sex to other employee representatives, provided at least three representatives are being chosen and at least 20% of the company’s employees are of this sex. If this 30% limit is not reached, the seats remain empty.  

[1] Mitwirkung im Aufsichtsrat, by Helmut Gahleitner, Verlag des ÖGB GmbH, Vienna, 2017

L. Fulton (2020) National Industrial Relations, an update. Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.