The Austrian government has recently taken several measures to combat the COVID-19 pandemic. These measures raise a number of legal and fiscal questions. Your consultants at Deloitte or Jank Weiler Operenyi | Deloitte Legal will be happy to assist you in this regard. This document means to provide initial information regarding possible labour law implications and subsequent options for employers.
Rules regarding continued payment of salaries
Officially imposed quarantine
If an employee cannot work due to a quarantine imposed by the authorities (under the Epidemics Act – Epidemiegesetz – EpidemieG), the employee stays entitled to their salary for the duration of the quarantine. This may not apply if the quarantine was the result of gross negligence on part of the employee. The employer, in turn, is entitled to reimbursement for the employee’s salary by the government, as well as for the respective contributions to the social security provider and staff pension fund (“Mitarbeitervorsorgekasse”). The employer can claim the reimbursement within six weeks after the day on which the measures are repealed again, via application at the district authority (“Bezirksverwaltungsbehörde”) with jurisdiction over the region that had been affected by the measures.
Provisional measures to prevent the spread of COVID-19
The Federal Minister of Social Affairs, Health, Care and Consumer Protection has issued provisional measures to prevent the spread of COVID-19. According to these measures, it is prohibited from 16 March 2020 onwards to enter the customer area of business premises of retailers and service providers, as well as leisure and sports facilities, for the purpose of purchasing goods or services or for using leisure and sports facilities. This prohibition does not apply to pharmacies, the food trade, drugstores and drugstore chains, petrol stations, banks, post offices, etc. Furthermore, it is not allowed to enter the premises of gastronomy businesses, such as restaurants, cafés or bars, starting on 17 March 2020. For the time being, these measures will stay in force until 22 March 2020. It is important to note that the provisions of the EpidemieG on continued payment of salaries do not apply to these businesses for the duration of their closure, since the closure has been qualified as being due to “force majeure”.
If employees contract the Corona virus and fall ill, the usual provisions on sick leave apply.
Special care leave
On the occasion of the closure of schools and kindergartens, an employer can grant their employee a leave of up to three weeks to care for their child(ren) under 15 years of age (“Sonderbetreuungszeit”). Employers are entitled to remuneration by the federal government for a third of the wages paid to the employee during the leave. This remuneration is capped at the level of the maximum contribution basis according to the General Social Security Act (Allgemeines Sozialversicherungsgesetz – ASVG). The respective claim needs to be raised at the local tax authority within six weeks after the day on which the measures will have been repealed. For the time being, this measure will be in force until 31 May 2020.
Apart from this, employees may, under certain circumstances, take a leave for important personal reasons for (usually) up to one week, during which they are entitled to receive remuneration from their employer.
Duty to work
An employee who is neither ill, nor under official quarantine, must continue to fulfill their duties under their employment contract, unless the employer decides – on the employer’s own accord – to relieve the employee of (some or all) of their duties for a certain amount of time (“Dienstfreistellung”). In such a case, the employer shall continue to pay the employee’s salary, without any reimbursement claim against the government.
If the employee refuses to work (e.g., for fear of infection), they lose their right to continued payment of salaries against their employer. Such a refusal is only justified if there is an objective risk of contracting the Corona virus, e.g., if a case of illness becomes known in the immediate work environment of the employee (Attention – this does not apply to employees working in the health sector!).
Options for employers
An employer is currently not allowed to unilaterally instruct their employee to work from home (home-office). Instead, both parties need to reach an agreement. It is advisable to include a time limit or a revocation clause (“Widerrufsklausel”) in the home-office agreement, in order to prevent any eventual future legal claims to home-office work. Additionally, the agreement should contain a definition of the temporary workplace, as well as provisions on reimbursement (if applicable). If a relocation clause (“Versetzungsklausel”) is already included in the original employment contract with the employee, it may be possible for the employer to unilaterally direct the employee to work from home.
It is also possible to instruct an employee to work from home if they have been officially quarantined, or on occasion of the official closure of a company due to the COVID-19 outbreak. However, this is only provided that the employee is not already ill, in which case the usual provisions on sick leave apply (including the remuneration provisions).
Consumption of vacation and overtime entitlements
A unilateral instruction by the employer to consume remaining vacation and overtime entitlements is usually not permitted.
It is not permissible for the employer to unilaterally reduce an employee’s working time; instead, it is necessary to reach an agreement with the employee, which may also be concluded for a fixed term.
Consensual dissolution of the employment relationship with reinstatement guarantee
The employment relationship may be terminated by mutual agreement of both the employer and the employee, and combined with a reinstatement guarantee. This requires, in principle, that the usual steps of an employment termination need to be taken, such as a settlement of all termination-related claims, as well as a deregistration of the employee with the social insurance provider. However, the severance payment can be deferred by mutual agreement, if the provisions of the old severance pay scheme (“Abfertigung alt”) apply. In this case, the employee is entitled to unemployment benefits.
While the interruption caused by the dissolution does not in principle qualify as “employment time” for the purpose of calculating the employee’s total time of service, it can count for some claims that are dependent on length of service.
Early warning system
Should an employer wish to terminate the employment relationship with at least (i) five employees, if the company employs more than 20 and less than 100 employees, or (ii) 5% of all employees in companies which employ more than 100 and less than 600 employees, or (iii) 30 employees in companies which employ more than 600 employees, or (iv) at least five employees in a company of any size, if these employees have reached at least the age of 50. In such cases, the employer has to notify in advance the regional office of the Public Labour Office (“Arbeitsmarktservice – AMS”). The AMS has to be informed at least 30 days before the first employee is given notice. Any notice given prior to the employer’s communication of the planned employment terminations to the AMS, or before the 30 days period has passed, is void; the same applies to mutual agreements of dissolution initiated by the employer. The employer can apply for a waiver of the 30 days waiting period. If the employer, however, gives notice prematurely, the employee can claim that the continued existence of the employment relationship be declared.
NEW: Working-time reduction due to Corona
As a response to the Corona crisis, a special working-time reduction model was introduced (“Kurzarbeit”). One prerequisite for the working-time reduction according to this model is an agreement between the social partners (“Sozialpartnervereinbarung”), to be concluded between the Chamber of Commerce and the Trade Union. This agreement also counts as a company agreement (“Betriebsvereinbarung”) or an individual agreement (in companies without a works council). The social partners have agreed to sign such an agreement within 48 hours.
To apply for working-time reduction, the respective company agreement or individual agreements are to be submitted to the AMS, together with the corresponding application form. The AMS will then forward the documents to the Chamber of Commerce and the competent Trade Union.
Before the start of the working-time reduction, employees must have used up all their remaining vacation and overtime entitlements in full. After that, their working-time can be reduced to zero percent for a given time period; however, an employee must work for at least an average of 10% of their original working-time over a reference period of usually three months (an extension is possible). Depending on the income level of the employees whose working-time has been reduced, the AMS will remunerate between 80% and 90% of their net earnings during the reduced working-time period. According to the FAQ of the Federal Ministry for Labour, Family and Youth (status 17.03.2020), the employer’s social security contributions are based on the remuneration before the reduction of the working time. Under the new working-time reduction model, these increased contributions will also be paid by the AMS from the first month.
The restrictions by the Austrian government in connection with the COVID-19-pandemic lead to a variety of legal and tax questions for companies. Your Deloitte and JWO-advisors are happy to be there for any questions. We can have recourse on our experts in the respective legal field and can therefore provide comprehensive legal and tax advice.
More articles relating to COVID-19:
- Liquidity constraints due to corona virus – Ministry of Finance and Social Security Agencies facilitate deferral and reduction of tax prepayments and social security contributions by application
- Corona: Governmental restrictions lead to complex legal and tax issues
- Further simplifications for deferral of tax prepayments and social security contributions
- Closed Shops and Empty Offices in Times of the Corona Crisis
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