Employment Contracts

The employment contract regulates the rights and obligations of employees and employers, unless they are stipulated by law, collective agreement or company agreement. The employment contract is the legal basis for the cooperation between employer and employee. The contract is concluded by consensus of both parties.

The employment contract establishes a continuing obligation between the employer and the employee for a definite or indefinite period of time. Specifically, the employee undertakes to make his labor available to the employer in return for remuneration.

On the one hand, the employment contract thus contains provisions on the mutual rights and obligations arising from the employment relationship; on the other hand, it also has an important evidentiary function: In the event of a dispute, for example, both contracting parties can refer to the agreed points in the employment contract.

The personal dependence of the employee on the employer is a particularly intensive feature of the employment contract. The employee is integrated into the company's organizational structure, is subject to the employer's instructions, is obligated to provide personal services and is subject to the employer's control and disciplinary authority in the performance of work.

Other possible forms of a contractual obligation under service law are the free service contract and the contract for work and services. Independent contractors are personally independent and not subject to instructions. The contract for work and services is characterized by personal and economic independence. Whereas in the case of a contract for work and services, a certain degree of success is owed, (freelance) employees are only obliged to make diligent efforts to correctly perform the tasks assigned to them.

In principle, there are no specific formal requirements when concluding a service contract. The contract may be concluded orally, in writing or by implication. The only requirement is the issuance of a service note, unless a written service contract is drawn up. A service note contains the essential rights and obligations arising from a service contract. In contrast to a service contract, a service note is to be understood as a unilateral declaration of knowledge by the employer.

 

What to consider for employment contracts in Austria

Before concluding a service contract, it must be clarified whether and, if so, which collective agreement applies. Collective agreements apply regardless of the will and knowledge of the contracting parties.

Collective agreements primarily set out regulations regarding remuneration (minimum salaries or minimum wages), special payments and working hours. These regulations may not be changed to the disadvantage of the employees by agreement, in particular by a service contract. However, better agreements may be concluded.

Collective agreements are concluded between employee and employer bodies with collective bargaining rights, usually between trade unions and employer associations.

The employment contract may be concluded as a continuing obligation for an indefinite period or for a fixed period. As a rule, service contracts are concluded for an indefinite period. However, it may also be the case that a service contract is limited until the expiry of a certain date or until the occurrence of a certain event.

Termination may already be agreed between the contracting parties when the contract is concluded. In addition, both permanent and fixed-term employment contracts may be terminated at any time by mutual consent.

In addition to these two-sided types of termination, each contractual partner is also entitled to terminate unlimited employment relationships by unilateral declaration of intent, whereby a distinction is made here between extraordinary termination (dismissal, resignation) and ordinary termination (notice of termination).

A dismissal takes effect immediately without observance of periods and deadlines, but also requires important reasons that speak against a continuation of the employment relationship. Termination of employment is the unilateral, ordinary termination of a continuing obligation subject to compliance with time limits and deadlines. Unlike dismissal, notice of termination does not generally require a statement of reasons. Nevertheless, there is a certain obligation on the part of the employer to give reasons within the framework of the general protection against dismissal. In addition, there are also legal and collective-agreement restrictions in some cases. For example, in the case of lifelong employment contracts or employment contracts with a term of more than five years, the employee has the right to terminate the contract after five years with six months' notice. The freedom to give reasons is not only limited by law, but also by good morals.

We will be happy to provide you with competent and uncomplicated support in drawing up your employment contract.

 

Your DWP team

E-Mail: wien@daxundpartner.at

Phone: +43 5 9004 300

 

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