Published on 18 November
Claims against dismissal that involve transnational situations are becoming ever more frequent. The question if general protection against dismissal depends on a domestic place of business has remained unresolved so far. It arises for persons working in Austria for foreign employers with no place of business in the country. Recently, a decision of the Higher Regional Court of Vienna reaffirmed that a challenge of dismissal can only be filed if the employer has a place of business in Austria that is required to have a works council and employs more than five workers. However, the Austrian Supreme Court has yet to issue a final decision in the matter.
Dismissal protection depends on place of business in Austria
The Higher Regional Court of Vienna had established this precondition of a place of business in Austria in a 2022 decision (7 Ra 103/21z). In that case, the claimant had continuously worked for a German company in an office in Vienna for years. From 2009 onwards, he had been the only person employed by the company in Austria. His employment contract included the explicit choice of Austrian law.
The Higher Regional Court concluded that the substantive legal basis was a place of business as defined in workplace labour relations law, and that general protection from dismissal was contingent on a place of business in Austria. The Austrian Supreme Court left open the question, as it did not address this aspect in its decision (9 ObA 82/22g).
In a recent decision (7 Ra 59/24h), the Higher Regional Court of Vienna reaffirmed its view. In this case, too, the claimant had been employed by a German company that did not have a place of business in Austria. The claimant had habitually carried out his work in Austria, but had been integrated into the German organisational structure. Again, the claimant’s challenge of dismissal failed because there was no place of business in Austria. The Court held that the question of choice of law was immaterial. It argued, as it had previously done, that even in a conflict of laws assessment of general dismissal protection under the statute governing the employment contract (Art. 8 of the Rome I Regulation), Austrian substantive law set the precondition of a place of business in Austria.
An ordinary appeal on points of law was admitted, and the Austrian Supreme Court has yet to rule on the matter.
Potential parallel in German case law
Likewise, the German Federal Labour Court has consistently held in similar cases (BAG 2 AZR 55/18; BAG 2 AZR 902/06) that while dismissal protection is based on the employment contract statute, section 23 of the German Protection Against Dismissal Act only covers places of business situated in the Federal Republic of Germany. To date, the Court has maintained this line of reasoning in its case law despite criticism in legal literature.
Situations impacted in practice
In a nutshell, this means that Austrian workers who
- habitually carry out their work in Austria
- for a foreign employer
- with its place of business outside Austria
cannot (at the moment) base a claim against dismissal on sections 105 and 107 of the Austrian Labour Relations Act if their employer does not have a place of business in Austria that is required to have a works council. It remains to be seen how the courts will deal with the cases currently on appeal, and if there will be a definitive resolution of dismissal protection under section 105 of the Austrian Labour Relations Act for international cases.
