Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

Download full Q4 2022 Global Guide Quarterly

Suitability of Control Systems that Theoretically Affect Human Dignity

Precedential Decision by Judiciary or Regulatory Agency

Author: Michaela Gerlach, Partner – Gerlach Löscher | Littler

According to the Austrian Labor Constitution Act, the introduction of technical systems to control employees - as far as these affect human dignity - requires the consent of the works council. This rule applies even if the company owner lacks any intention to monitor, but the technical system would theoretically be suitable for this purpose.

In a recent decision, the owner of the company had an electronic locking system installed only on some, but not all, doors in the company. The Supreme Court ruled that the works council is not required to give its consent if a system is suitable for monitoring in the abstract, but its concrete technical design does not permit the creation of a movement profile, and is therefore actually not suitable for affecting human dignity. This is the first time the Supreme Court has commented on the concrete suitability of a control system that affects human dignity in the abstract.

No Protection Against Dismissal Without a Domestic Business?

Precedential Decision by Judiciary or Regulatory Agency

Author: Markus Löscher, Partner – Gerlach Löscher | Littler

Without a (domestic) business within the meaning of the Labor Constitution Act (Arbeitsverfassungsgesetz), an employee working in Austria for an employer with the company registered abroad is not protected against dismissal under Austrian law. In a recently issued decision, the Vienna Higher Regional Court ruled that without the existence of a domestic business, the (only) employee of a German company working in Austria is just a “representative.” Such a mere representative is therefore still integrated into the business of the foreign employer, so that there is no “domestic business.” According to widespread legal opinion, the “domestic business” element is a requirement for protection against dismissal under the Labor Constitution Act.

The court has allowed an (ordinary) appeal to the Supreme Court on this legal question, so that a final decision is still pending.

Supreme Administrative Court Indicates Position on Controversial “Home Office” Permanent Establishment

Precedential Decision by Judiciary or Regulatory Agency

Author: Armin Popp, Senior Associate – Gerlach Löscher | Littler

In Austria, the question of the creation of a permanent establishment (especially under the tax law) through home office activities has not been conclusively clarified. In general, practitioners and presumably also tax authorities assume that a certain power of disposal over the permanent establishment is required. The latest decision of the Supreme Administrative Court also points in this direction, stating that the “possibility of sharing a desk in the office premises of another taxpayer" is not sufficient "to affirm the power of disposal over a fixed place of business.”

Against this background, it will be difficult to argue that companies located abroad, for example, establish a permanent establishment in Austria, as it is likely that there will only rarely be any further power of disposal over the private residence of its employees. It should be noted, however, that this is merely a rejection decision and that the specific facts of the case do not directly concern a home office.

Adjustment of Remuneration Limits for Effective Competition Clauses

Upcoming Deadline for Legal Compliance

Author: Paul Moosmann, Associate – Gerlach Löscher | Littler

By agreeing on a competition clause, employees can in particular be prevented from working for a competing company in the industry of their former employer for up to one year after termination of the employment relationship. In addition to other conditions, however, only those employees who earned more than a certain minimum salary in the last month of employment can be further bound.

For agreements concluded after December 29, 2015, this is based on 20 times the maximum daily social security contribution base; for 2023, this will be €3,900 gross without pro rata special (holiday) payments, taking into account the salary and the average of other irregular remuneration components such as overtime, bonuses or commissions.