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Existing board-level representation made the directive an important topic for Austria. However, there was no major debate on its transposition into national law. The possibility of also allowing domestic companies to have a one-tier board was raised but then rejected.

For further information on the SE legislation, such as the choice of SNB members, click on the more button.

Austria has existing national legislation providing for employee board-level representation in a wide range of both public and private companies, giving a clear relevance to the legislation implementing the European company directive. Representatives of both employees and employers were involved in detailed discussions on transposing the directive into national law. However, there were no major disagreements during the process. One issue which was debated more widely was the possibility of extending to Austrian companies the opportunity provided to European companies of choosing between the single-tier and two-tier board. However, in the end it was decided not the take this step and to leave the requirement to have a two-tier board in place.

Form of transposition

Directive was transposed by law in time for the October 2004 deadline.

The directive on employee involvement in European companies was transposed through the following legislation published on 15 July 2004: 82nd Federal Act amending the Labour Constitution Act, the Federal Act on Employee Representation in the Post Office and the Labour and Social Security Courts Act (82. Bundesgesetz: Änderung des Arbeitsverfassungsgesetzes, des Bundesgesetzes über die Post- Betriebsverfassung und des Arbeits- und Sozialgerichtsgesetzes). Separate legislation was passed on 24 June 2004 to adapt Austrian company law to the Regulation on European companies.

Special negotiating body (SNB)

Selection of national members

Austrian members of the SNB are chosen by the works council structures.

The precise method of appointing Austrian SNB members depends on whether they are being sent from workplaces, companies, or groups of companies, and whether or not there is a structure of employee representation at this level.

In workplaces, the choice is made by the works committee (Betriebsausschuss) – a body that only exists if manual and non-manual employees elect separate works councils, and is made up of both groups – or, if there is no works committee, by the works council (Betriebsrat). If there are several works committees/works councils in separate workplaces that are not part of the same company, the chair of the largest workplace convenes a meeting of all of them to choose the SNB members.

In companies, the choice of SNB members is made by the central works council (Zentralbetriesbrat). If there is no central works council, the chair of the largest workplace convenes a meeting to choose SNB members as in the preceding paragraph. If there are several central works councils, the chair of the central works council in the largest company convenes a meeting of all the central works council members to choose the SNB members. If there are some works committees or works councils that are not covered by the central works councils, their chairs and deputy chairs are also to be invited to this meeting.

In groups of companies, the choice of SNB members is made by the group works council (Konzernbetriebsrat). Where there is no group works council the choice is made either by a meeting of the central works councils, as set out in the preceding paragraph, or, if there are no central works councils, by a meeting of the individual works councils or works committees, as in the paragraph before that. As before, if there are some central works councils or works councils/works committees that are not covered by the group works council, their chairs and deputies are also invited to this meeting (§ 218).

Achieving an appropriate balance between manual and non-manual workers and men and women should be taken into account in choosing the Austrian members of the SNB. And the need for each participating company to be represented by at least one member of the SNB should also be taken into account (§ 217).

One unusual feature of the Austrian legislation is that there is no provision for an alternative procedure if there is no works council. Unlike the legislation in most other member states Austrian law does not provide for direct elections in such cases.

External trade union representatives

External union representatives from Austria can be members of the SNB.

While the legislation states that Austrian SNB members will normally be appointed “from among the works council members”, it specifically provides for the possibility that an external union official – “an officer or employee of a relevant voluntary professional association” – may be appointed instead of a works council member (§ 217).

Financing of experts

Funding of more than a single expert not guaranteed

The participating companies pay the necessary costs of the SNB including the cost of “at least one expert” (§ 224). [NB this is clear from the German text (jedenfalls einen Sachverständigen). However, the English translation states “including expenses of interpreters and experts”.]

Standard rules under the fallback procedure

Allocation of national seats on SE representative body

Austrian members of the SE representative body are chosen in the same way as Austrian members of the SNB – through the national works council structures.

The procedure for allocating seats on the SE representative body – known as the SE works council (SE-Betriebsrat) in the Austrian legislation, is the same as the procedure for choosing SNB members. In other words, they are chosen through the Austrian works councils structures (see section on SNB) (§ 234). The one exception is that external trade union representatives can only be members of the SE works council if they are already members of the national works council. This is possible under Austrian works council legislation, but it is very rare.

Budget of the SE representative body

The budget arrangements for the SE representative body are the same as those for the SNB.

The arrangements for the funding of the SE works council are the same as those for the funding of the SNB (§ 224). This means that the administrative expenses of the SE works council, including the cost of at least one expert are borne by the European company. The company is obliged to provide the SE works council with “the material necessities” for the proper performance of its duties “on a scale appropriate to the size of the European company”.

National procedure for the allocation of board seats

Austrian board members are chosen using the same procedure as Austrian members of the SE representative body – through the national works council structures.

The SE works council decides on the distribution of board level seats – this applies whether it is a one-tier or two-tier system – (§ 246) and once the distribution has been fixed, any Austrian members are chosen in the same way as Austrian members of the SE works council, who in turn are chosen in the same way as Austrian members of the SNB. This means they are chosen through the Austrian works council structures (see section on SNB).

Misuse of procedures and structural change

Misuse of procedures

Structural changes in the first year are a misuse of procedures, unless the opposite can be proved.

The legislation states that a European company may not be misused to deprive employees of participation rights or to withhold these rights from them. It states that misuse is particularly to be suspected if there are changes in the company structure which are likely to result in employees losing or not gaining these rights. It also states that any structural changes that occur in the first year of a European company’s existence are to be taken as a misuse of procedures unless it can be proved that this was not the case (§229).

Structural change

The legislation provides an extensive list of structural changes and provides for the agreement to be re-negotiated where these have occurred and either the SE works council or representatives of 10% of the employees want this.

An SNB should be convened to begin negotiations on a new agreement on employee involvement where there have been structural changes, provided that this is requested by the management of the company itself, through a written request from 10% of the workforce or their representatives, or through a written request of the SE works council. Structural changes are seen, in particular, to include the following circumstances: a transfer of the registered office of the company, a change in the way the company is governed, the closure, cutting back or transfer of businesses or sites of the company, the amalgamation of plants or business and the acquisition of important holdings in other companies, in as far as these have a significant impact on its overall structure. In addition major changes in the numbers employed by the company and its subsidiaries are also to be seen as structural changes.

Position of trade unions and employers

Unions and employers both appear satisfied with the Austrian legislation.

Representatives of both employers and unions were involved in the process of transposing the directive into Austrian national law and they both seem satisfied with the outcome.

L. Fulton (2008) Anchoring the European Company in National Law - Country Overviews (online publication, prepared for worker-participation.eu)

Alle Austria