Paid holiday entitlement, Transparency Package 2024 and flexible working locations – what employers need to know now!

1. Limitation period – employer obligations regarding unused vacation

Just in time for the end of the vacation season, the question arises as to what obligations are imposed on employers with regard to any remaining holiday entitlement. A recent ruling by the Austrian Supreme Court of Justice (OGH) in GZ 8 ObA 23/23z shows how important it is to keep track of employees’ vacation entitlements and to encourage them to gradually reduce them.

According to the EU Working Time Directive (Directive 2003/88/EC), every employee is entitled to a minimum of four weeks of paid annual leave. Austrian labor law goes beyond these EU requirements by providing for an annual leave entitlement of at least 30 working days under section 2 para. 1 Austrian Holiday Act (UrlG). This entitlement generally expires after two years from the end of the vacation year in which it was accrued.

Employer’s information and notification obligations under EU Law

However, according to the case law of the ECJ (C-120/21), the limitation period requires that the employee was also enabled to take their vacation in a timely manner. Accordingly, the limitation period can only apply if the employer has actively requested the employee to take the leave in due time. Additionally, employees must be informed about the impending expiry of their vacation entitlement. If this is not done, the EU minimum leave entitlement of four weeks per leave year remains in place.

Initially, the Austrian Supreme Court of Justice (OGH) viewed these extensive obligations to inform and notify, developed by the European Court of Justice, as only partially applicable to Austrian law. However, the Court now assumes that the EU minimum holiday entitlement can only expire if the employee has been asked to use it in a sufficiently specific and completely transparent manner. Whether this also applies to the additional holiday entitlement under national holiday law is (still) uncertain, as this specific question was not addressed in the current case and therefore remains open.

Conclusion

In order to avoid potential financial burdens when terminating employment relationships, employers should ensure that all employees use up their vacation. A timely and transparent request to do so is recommended in any case. This should take the form of a written and individual notification (at least approx. six months before the expiry of the outstanding vacation of the third preceding vacation year). Without such a vacation expiration notification, any unused EU minimum vacation entitlement will not expire.

2. Transparency Package 2024: key changes in labor law

The Transparency Package 2024, which implements the EU Pay Transparency Directive, has been in force since March 28th, 2024. We have summarized the most important changes for you.

Extended information obligations

The information obligations for employers have been extended. From now on, written statements of the key terms and conditions (“Dienstzettel”) must also be issued for independent contractors when an employment relationship is established, changed or a posting abroad begins. This obligation does not apply if there is a written employment contract or an amendment agreement. The minimum content of the employment certificate has been extended to include the following points in particular:

Termination procedure
Company headquarters
Description of the work performed
Remuneration and due date of overtime
Changes to the shift schedule
Social insurance provider
Conditions of the probationary period
Entitlement to further training

Time sheets can now also be submitted electronically.

Right to multiple employment

Employees now have the right to take on multiple jobs without facing disadvantages. The employer can only prohibit this if it conflicts with work time regulations or existing employment relationships.

Training and further education

Training and further education necessary for performing the tasks agreed upon in the employment contract are now explicitly considered work time. The costs of such training must be borne by the employer unless it is financed by a third party. However, a reimbursement agreement can still be made if the employee is provided with funding for additional training that is “usable” on the labor market. The prerequisite for a reimbursement obligation is the conclusion of a written, individual reimbursement agreement, which must meet certain criteria.

Additions to protection against dismissal

These changes are supplemented by new provisions on protection against dismissal. Employees may not be terminated, dismissed or otherwise disadvantaged for asserting claims related to the written statement of the key terms and conditions (“Dienstzettel”), multiple employment or training and further education. At the written request of the employee, the employer must also give reasons for the termination.

In view of the numerous new requirements, it is advisable to review existing employment contracts prior to any amendments and employment contract drafts and adapt them if necessary. This ensures that the current legal requirements are met in order to avoid legal risks.

3. Changes in telework / home office

The Telework Act aims to improve the framework conditions for telework by extending the existing home office regulations to include telework from any location. This change allows employees to perform their work at places not associated with the company, such as coworking spaces or other locations chosen by the employee. The adjustment follows an evaluation of the home office measures that have been in force since April 2021 and responds to the need for more flexible working arrangements. The new regulations will come into force on January 1st, 2025, and apply to both newly concluded telework agreements and existing home office agreements. Existing agreements remain valid in principle and do not need to be adjusted unless new telework locations are to be added.

Written agreement

Telework must be agreed in writing between the employee and the employer, similar to the current home office regulations. This agreement can be made electronically and must specify the work locations and the framework conditions for telework. Unilateral instructions from the employer regarding the introduction of telework are not permitted.

Work equipment

The employer remains responsible for providing the necessary digital work equipment for telework, which may include IT hardware, software, and the required data connection. However, it is possible to deviate from this by agreement so that the employee provides these resources themselves. In such cases, the employer is obliged to reimburse the associated costs appropriately, which can also take the form of lump-sum payments.

Data protection

The data protection requirements for telework correspond to those in the office. This includes the definition of data protection responsibilities, especially when the employee uses their own digital work equipment. The agreement should also include provisions on the secure storage of access data, the protection of data storage devices and the secure deletion of personal data. In addition, reporting obligations in the event of data protection violations continue to apply.

Employee protection

The labor inspectorate still has no general right to enter homes where telework takes place in order to protect the constitutionally guaranteed rights to private and family life. An exception is only made with the employee’s consent. This restriction only applies to telework in private homes and not to homes used for commercial purposes or accommodations provided by the employer.

Outlook

The Telework Act introduces significant improvements for both employees and employers by increasing the flexibility of work locations. With clear regulations on work equipment, data protection, and the requirement for mutual consent in telework agreements, the new forms of work are legally secure and transparent for all parties involved. These changes respond to the increasing demand for flexible work models, offering more options to adapt the work environment to current needs.

Our labor law expert, Fabian Blumberger, is happy to assist with any further questions on these topics and provide support with practical implementation.

Disclaimer

This article is for general information only and does not replace legal advice. Haslinger / Nagele Rechtsanwälte GmbH assumes no liability for the content and correctness of this article.

17. September 2024