Austrian Short-Time Working Model "Corona Immediate Assistance-Short Time Flex" 

March, 2020 - Thomas Angermair

Short-time work is generally understood to be the temporary, foreseeable reduction in normal working hours (by at least 10% to a maximum of 90%). A special feature of Corona Immediate Assistance Short-Time Flex is that working hours can even be reduced to zero.

Short-time work requires a social partner agreement and contact with the Austrian Labour Market Service (Arbeitsmarktservice – AMS).

In companies, where a works council is established, short-time work must first be agreed with the works council by means of a works council agreement. In companies, where no works council has been established, short-time work may be agreed by means of an individual agreement with each affected employee. The respective works council- or individual agreement is then signed by the social partners within 48 hours – provided that the prerequisites are met.

What is new about the Corona Immediate Assistance Short-Time Flex is that both

  • existing time credits and
  • old vacation entitlements

are to be consumed in full immediately.

As a general rule, current vacation entitlements are not to be consumed in the first three months. However, if the short-time work is to last longer than three months, at least another three weeks are to be consumed.

The net replacement rate for the new short-time working model is between 80 and 90 percent, with low earners having the highest net replacement rate. The "net replacement rate" is the amount that employees receive when they work short-time. It includes the salary (for the reduced working time) and the support payments. It includes the remuneration for the reduced working time and the allowance. The AMS bears the additional costs up to the maximum contribution basis (gross EUR 5,370 per month).

The following staggered rates apply:

  • 80% will be replaced if the remuneration before short-time work was more than half the maximum contribution basis, i.e. more than EUR 2,685 gross;
  • 85% will be replaced if the remuneration before short-time work was up to half the maximum contribution basis, i.e. up to EUR 2,685 gross; and
  • 90% are replaced if the remuneration before short-time work was up to EUR1,700.

The AMS flat rates also cover social security contributions from the first month onwards. While the employer has to pay the social insurance contributions on the basis of the remuneration before short-time work, the AMS flat rates only cover the proportional social insurance contributions (for the reduced working hours). From the fourth month onwards (thus only in case of an extension), the AMS will also cover these increased contributions in the new short-time work model.

Holiday pay during short-time working is calculated on the basis of the working time prior to the short-time working agreement; the same applies to continued remuneration in case of illness.

The retention period, i.e. the period during which no terminations are possible after short-time work, is generally one month, irrespective of the duration of short-time work. In the event of special circumstances, there is an obligation to negotiate during short-time work on whether the retention period is to be cancelled completely or shortened.

It is possible to change the agreed reduction in working time: (i) in companies with a works council by way of a works council agreement and (ii) in companies without a works council by way of a individual agreement, which requires prior notification to the social partners (at least 5 working days before the working time change).

Short-time work is currently limited to a maximum of three months. If necessary, it can be extended by a further three months.

Are employees entitled to compensation from their employer in the event of an official closure?

Up to now, we have assumed that employees are entitled to such continued payment based on the provisions of the Austrian Epidemics Act and the provisions relating to loss of earnings.

It is questionable whether, pursuant to Article 8 of the COVID-19 Act passed by the parliament, under which the provisions of the Epidemics Act no longer apply to official closures of establishments, there is also no longer a corresponding obligation to continue to pay the employees' remuneration. In our opinion, however, it can be assumed that this merely means that the employer's claim for compensation from the Federal Government has ceased to exist.

Employees are entitled to continued remuneration in any case, if

  • they themselves have fallen ill;
  • they have been isolated in accordance with the provisions of the Epidemics Act; or
  • they live or work in a place where traffic restrictions have been imposed.

 Is the employer allowed to order home Office unilaterally?

In principle, home office must always be expressly agreed between employee and employer.

However, the employer can order home office in particular if there is already a corresponding agreement in the employment contract. This can also be a general relocation clause, which is so broad that the employee's place of residence is also covered by it. Any costs incurred by the employee must be reimbursed by the employer (e.g. for internet, mobile phone).

Home office is also possible if the employee is in quarantine but is not sick himself.

In view of the current dramatically worsening situation and the government's explicit demand that all work that can be done in the home office must also be done from home, we also assume that in this exceptional situation (i) the employee - due to his duty of loyalty - is obliged to work from the home office and vice versa (ii) the employer - due to his duty of care - is also obliged to issue a corresponding order.

Under what conditions can a company dismiss employees (in particular due to a closure)?

Terminations are generally permissible in accordance with the general rules and in compliance with the applicable notice periods and dates. In companies with a works council, this means that the works council must be informed at least one week before notice of termination is given.

Caution is required when several employment relationships are to be terminated within a period of 30 days. In this case, the AMS must be informed in advance and terminations are only possible after a waiting period of 30 days. Here again, any works council must be informed in advance ("early warning system").

The respective threshold to be applied depends on the size of the company:

  • Companies with 20 - 100 employees: minimum 5 employees;
  • Companies with 100 - 600 employees: minimum 5% of employees;
  • Companies with more than 600 employees: minimum 30 employees;
  • Regardless of the size of the company: minimum 5 employees who have reached the age of 50.

Are there notification or information obligations towards employees in case of closure?

There are no special legal obligations to provide information to employees. In general, however, employees should be informed about the concrete effects of the closures on the respective employment relationship - i.e. in particular, whether employees no longer have to perform their work for the time being due to the closure or whether any other activities are to be performed until further notice - despite the closure.

Does a company have to take into account participation rights of employee representatives?

Yes, in particular in the event of terminations, the works council must be informed at least one week before the notice of termination is given. If, due to the number of employment contracts to be terminated, the early warning system must also be observed, the works council can demand the conclusion of a social plan. A social plan is a company agreement which is intended to mitigate the consequences for employees resulting from the termination of employment.

Can a company unilaterally send its employees on vacation or another type of leave, e.g. time off (with or without compensation)?

No, generally not. All these measures - i.e. both vacation and time off - are possible and useful, but require the consent of each individual employee.

Other conditions expressly apply in the case of Corona Immediately Assistance-Short-Time Flex: As mentioned at the beginning, both time credits and old vacation entitlements are to be used up in this model.

In all other cases, the employer may appeal to the employees' duty of loyalty. Especially in the current challenging situation for everyone, we believe that there are good reasons for a duty to reduce overtime and possibly also old vacation entitlements.

In the event of the closure of "facilities" (i.e. schools, kindergartens, etc.), a special care leave of up to three weeks can be agreed with employees – provided that the employee has to care for children under 14 years of age (Section 18b Employment Law Harmonization Act – "AVRAG"). The decision on this is at the discretion of the employer. In the event of such leave, employers are entitled to reimbursement of one third of the wage costs. This compensation is capped at the maximum monthly contribution basis, i.e. EUR 5,370 gross, and must be claimed from the competent tax authority within six weeks of the day on which the official measures are lifted.

Are there government or social security grants or subsidies to which employers and/or employees would be entitled in the event of closure?

With the exception of business closures ordered by the authorities, it is generally possible to apply to the federal government for compensation for continued remuneration paid to employees in accordance with the provisions of the Epidemics Act. This also includes employer's social security contributions.

This applies to employees who

  • have been isolated because of a disease or suspected disease; or
  • live or work in a territory on which traffic restrictions have been imposed in accordance with the Epidemics Act.

The period for doing so is six weeks and shall begin to run from the date the official measure is lifted.

In addition, the ÖGK has the following measures for employers:

  • Deferral of contributions: If the current situation leads to liquidity shortages, the maximum deferral period is extended from one to three months.
  • Payment of contributions in instalments: Extension of the installment period up to 18 months possible.
  • Indulgence for late payment surcharges: Corona-related reporting delays can be disregarded at the request of the companies.
  • Suspension of execution and insolvency filings: In individual cases, in the event of liquidity shortages caused by corona, execution and insolvency filings can be suspended (without the need for special safeguards).

All filings can be made informally.

SVS has also announced that it will make similar measures possible; specifically

  • Deferral of contributions,
  • Payment of contributions in instalments,
  • Reduction of the provisional contribution base,
  • total or partial leniency of the default interest.

Applications for deferral and payment in instalments can be submitted informally in writing by e-mail.

The reduction of the provisional contribution base can be applied for using the online form.

One of my employees has fallen ill. What do I have to consider?

As part of its duty of care, the employer must inform the health authorities on telephone number 1450 if there is a suspicion that an employee is ill with COVID-19 (due to acute symptoms, stay in an endangered or restricted area or contact with a confirmed case).

If an employee is demonstrably ill with COVID-19, the employer (or the responsible occupational health physician) should immediately contact the local health authorities (district administration, magistrate, public health officer, labour inspectorate).

May the employee be absent from work if he or she is afraid of infection?

No. Such conduct would be considered as unjustified unilateral absence from duty and usually constitutes grounds for dismissal.

This does not apply, however, if there is an objectively justifiable risk of being infected with the virus at work (apart from those workers who regularly deal with illnesses at work, such as in hospitals or pharmacies).

Is an employee allowed to refuse to serve guests in the shop?

At present, such a refusal would not be justified. There is always a risk of infection among employees in the service sector. However, it remains to be seen how the situation develops.

Can I order my employees to make deliveries to quarantine areas?

No. If a customer is in an officially ordered domestic quarantine, the respective area may not be entered by other persons. However, it would be possible, e.g., to deposit deliveries in front of the apartment door.

What else can a company do, if services of an employee are no longer require or only in a reduced way?

In addition to the short-time work and possible terminations described above, the following alternative measures could be considered:

  • agreement of holidays;
  • consumption of time credits;
  • insourcing (performing outsourced services in-house again);
  • agreement of unpaid leave, educational leave or part-time education




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