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Financial Participation

There is no principal opposition to employee financial participation either by the Austrian Trade Union Association (ÖGB) or the Labour Chamber (“Arbeiterkammer”). The latter has focused on participation since the beginning of the 1990’s, taking the view that employee financial participation not only gives workers new opportunities and chances for profit-sharing and ownership of capital, but also opens the door for more information and co-determination rights. It is seen as a prerequisite that each scheme be carefully examined and that participation should be voluntary.1

 

 

 

The ÖGB view is similar. A resolution on employee financial participation was passed back in 1991 at the national congress, stating that employee financial participation must not be a substitute or alternative to the co-determination laid down in the Austrian Law on Working Conditions (“Arbeitsverfassungsgesetz”), and that it should not restrict an employee’s right to determine the use of his salary or to move to another a company. It is the view of both the ÖGB and the Labour Chamber that the limit of employee financial participation is reached when employees are called upon to share entrepreneurial risks without being given corresponding co-determination rights. Provisions and rights set out in wage settlements must not be infringed by employee financial participation. Both bodies are also against employee financial participation leading to any modification or deterioration of employees’ work, social security or tax status. There must be no financial disadvantage for employees.

 

The Austrian trade unions are wary of using employee financial participation to establish or promote the concept of “shareholder value” in the minds of employees and especially management. They oppose share options, saying that these promote a one-sided profit motivation at the expense of employees. On a macro-social level employee representatives do not see employee financial participation as a suitable instrument for combating differentials in earnings and wealth.

 

In spite of all these reservations and concerns, both ÖGB and the Labour Chamber see employee financial participation as an opportunity for employees. As long as a participation scheme is jointly defined and co-determination rights honoured, employee financial participation is seen as a suitable HR instrument to improve industrial relations within a company. Participation gives employees the opportunity of improving their income in line with a company’s positive development. At the same time trade unions recognise the importance of insuring the participation against risks.

 

Wilke, Maack and Partner (2014) Country reports on Financial Participation in Europe. Prepared for www.worker-participation.eu. Reports first published in 2007 and fully updated in 2014.