Austria is a federal republic made up of nine provinces (Länder). Employment legislation is primarily a federal matter.

In some areas of law, legislation is consolidated into a single code, and one of these, the General Civil Code (Allgemeines bürgerliches Gesetzbuch, ABGB) is relevant to employment, governing matters such as employment contracts and sick leave. However, employment legislation itself is not codified in this way but takes the form of numerous individual statutes (often influenced by EU law). The case law of the specialist labour and social courts and the Supreme Court plays a role in interpreting employment legislation.

Pay and conditions for a large majority of employees in Austria are set by industry-level collective agreements. Other important sources of law are “works agreements” signed at establishment level by employers and works councils, and individual employment contracts. The provisions of collective agreements take precedence over the provisions of works agreements and employment contracts, unless the latter are more favourable for the employee or concern matters that are not regulated in the collective agreement.

In a number of areas, employment law distinguishes between white-collar and blue-collar employees. Certain aspects of the employment relationships of white-collar or salaried employees (Angestellten) are governed by specific legislation, the White-Collar Employees Act (Angestelltengesetz). White-collar employees are defined as those who perform “commercial” work, office work or non-commercial “higher-level” work requiring special training and skills — these might include staff in clerical, administrative, sales, financial, payroll, supervisory and receptionist roles. For blue-collar or manual employees (Arbeiter), certain issues are regulated instead by the Trade Ordinance (Gewerbeordnung, GewO), which covers “auxiliary” or “unskilled” employees employed in commercial enterprises, defined as including factory workers, “assistants” (in shops, catering, etc), apprentices and other employees who perform subordinate unskilled work — specifically excluded are employees who perform “higher-level” work and whose pay is generally set on a monthly or annual basis, such as supervisors, mechanics, book-keepers, cashiers, draughtspeople and chemists.

The differences in treatment between the two groups has narrowed over time and at present the main distinctions (some of which will be abolished in 2021) apply in certain areas of termination of employment and aspects of the employment contract.

This article refers to employment law in the private sector only.

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