While Austrian labour law is similar in many ways to that of Germany’s labour law there are some important differences, particularly in relation to the termination of employment contracts. Any failure to respect this could have potentially costly consequences for a global company.

Austrian law still makes a distinction between waged (“Arbeiter”) and salaried (“Angestellte”) employees.  A further distinction is made (as in German law) for senior executives for whom some labour protection laws do not apply.

Austria has a large number of statutes governing its labour market and its labour relations.  The statutes tend to apply more to Angestellte employees. In addition many employment contract terms and conditions derive from collective bargaining agreements negotiated between employer and employee organisations on a nationwide sector basis. They are almost equivalent to statute in their enforceability and tend to be more relevant for Arbeiter employees.

Where a Works Councils is established it has proved important for employers to maintain good relationships with them as this can lead to increased productivity, whereas poor relations have often proved hugely damaging to employers.