Forms of Employment
In Austria there are various forms of employment. Their characteristic features are described below.
Employment Contract (dependent)
An employment contract (Arbeitsvertrag) can be concluded for a fixed term or for an unlimited period. As compared to the contract for services (Werkvertrag) (self-employed) no particular result has to be delivered but rather diligent work has to be rendered by the employee.
Personal dependence is the essential criterion:
In principle the employer determines the employee's place of work, working hours and work-related behaviour. The following statutory features are indispensable:
- The employee is integrated into an employer's organisation
- The employee is subject to the employers' instructions;
- The employee is obliged to render their services in person;
- The performance of the work is supervised;
- The employee is subject to disciplinary measures.
These features may be present to differing degrees. It is a flexible system. What is important is that personal dependence prevails on the whole. For example, flexible hours may be agreed with an employment. Teleworking from home does not necessarily rule out that it is an employment. However, if the employee can be represented by a substitute and does so, this is not an employment relationship because there is a total lack of personal dependence.
Whether an employment contract is properly established does not depend on what has been agreed between employer and employee but rather to what extent the statutory features are met in practice in the specific employment relationsship.
Actors who have to appear for rehearsals and performances at certain times from February to June at Volkstheater and comply with the theatre director's substantive instructions are considered employees. This is an employment contract.
A writer is engaged to give a public reading from her novel at Künstlerhaus on 28 February. She is free to design the content of her reading (i.e. which passages she will read and how she will present them). Although the venue and time are clearly defined, she is not integrated into an employer's organisation. The principal may only give instructions related to objective matters but not regarding the content of the reading. This is a contract for services, and not an employment contract.
Entitlements under labour law
Artists in dependent employment are subject to the relevant labour laws, any collective-bargaining agreements and works council agreements.
They are entitled to receive the minimum remuneration fixed in the collective-bargaining agreement, as well as overtime surcharges and special bonus payments, continued pay during inability to work and holiday pay, annual leave and annual leave allowance.
Periods of notice of termination:
Workers and employers generally have a 14-day period of notice of termination, and for white-collar workers (Angestellte) the period of notice of termination depends on the duration of employment as follows:
Period of notice of termination according to the Salaried Employees Act (Angestelltengesetz)
- For employees: one month
- For employers:
- During the first and second years of service: six weeks
- After two years of service completed: two months
- After five years of service completed: three months
- After fifteen years of service completed: four months
- After twenty-five years of service completed: five months
The period for employees may be increased up to six months by agreement. The period to be complied with by the employer, however, must not be shorter than the period of notice agreed with the employee.
Day of notice of termination according to the Salaried Employees Act
- For employees: the last day of month
- For employers: end of quarter
The parties may agree by contract on the 15th day or last day of a month.
If collective-bargaining agreements exist, the period agreed therein for the industry will apply instead of the statutory periods of notice of termination.
Relevant collective-bargaining agreements in the artistic field are:
Artistic activities in the field of theatre are governed by special regulations (Theatre Employment Act, Theaterarbeitsgesetz [TAG]). The Austrian Association of Independent Theatre (IG Freie Theaterarbeit) published a booklet in 2015.
Free Service Contract
The 'free service contract' (freier Dienstvertrag) is not defined by a law; it can be classified as hybrid between a contract for services and an employment contract. In contrast to an employee, here the services are rendered in a personally independent way. Free service contractors are obliged to diligently perform their work but they do not bear the risk of successful performance. In particular, free service contractors are
- independent regarding their working time, place of work and behaviour at work;
- The employer has no supervisory authority;
- The free service contractor is not or only loosely integrated into the principal's organisation,
- may be represented by a substitute,
- and may decline work.
A consultant provides advice to the principal on an hourly basis as needed. Hours for consulting are agreed on a case-by-case basis.
Entitlements under labour law
Free service contracts are subject to contractual freedom, which means, the terms of contract and special benefits can be negotiated freely.
Free service contractors generally do not have any entitlement under labour law, such as entitlement to annual leave, continued pay in the event of illness, collective-bargaining wages, and special bonus payments, or old-system severance pay. Free service contractors have to be, however, covered by the new-system severance pay.
Unless other notice periods have been agreed, the statutory 14-day period applies. For higher-level service grades, the notice period is four weeks, provided the free service contract has existed for at least three months. The free service contract may be terminated at any time without notice for important reasons.
Free service contractors working as artists are, in terms of social security, subject to the Federal Act on Social Insurance for Persons engaged in Trade and Commerce (Gewerbliches Sozialversicherungsgesetz), and not the General Social Security Act (Allgemeines Sozialversicherungsgesetz) – see Social Security
Contract for Services / Self-Employed Activity
A Contract for Services exists where a person undertakes to deliver a specific work against remuneration. What is important is only the result. Contractors run their own business and are personally independent, they have various principals and their own organisational structure. The following features characterise a contract for services:
- Contractors are obliged to deliver a result;
- The work is created according their own plan;
- They use their own equipment;
- They use their own employees or subcontractors;
- They warrant against defects in the work;
- Any failure of work is their responsibility.
A promoter engages a band for a concert. This is a contract for services. Although venue and time are predetermined or negotiated, there is no integration into the principal's organisation. The band is free to design the content of the programme and may possibly hire a substitute. The musicians act independently for their own account and at their own risk.
Further examples of contractors are: stage designer and costume director, political satirist, author of books, ....
Entitlements under labour law
As no employment is established, no entitlements under labour law are available, such as annual leave or continued pay in the event of illness.