CMS NewsMonitor Employment Law | Episode 41
Published on 13 August 2025
Good news for employers based abroad: The Austrian Supreme Court has clarified for the first time that their employees can only invoke general protection against dismissal under Sections 105 and 107 of the Austrian Labour Constitution (ArbVG) if the employer has at least five employees in Austria.
In the decision we obtained (OGH 9 ObA 94/24z), a German employer with a business in Germany employed a single employee in Austria. This employee was integrated into the German business. Upon termination of his employment relationship, the employee argued that the company in Germany – which employed more than five employees – was equivalent to a company in Austria. The plaintiff then argued that general protection against dismissal also applied and that he could challenge the dismissal on the grounds of social injustice.
The Supreme Court rejected this argument: General protection against dismissal in Austria also requires a domestic establishment with at least five employees. Integration into an establishment in Germany, even if it employs more than five employees, is irrelevant for Austrian protection against dismissal:
- Protection against dismissal is generally governed by the law applicable to the employment relationship, for which the provisions of the Rome I Regulation are decisive. General protection against dismissal, which is enshrined in Austrian works constitution law, is also governed by this law. Thus, Austrian protection against dismissal generally applies to employees working for foreign companies in Austria.
- However, general protection against dismissal requires a company in Austria that employs at least five employees.
- If this is not the case, as in the present case, general protection against dismissal under Sections 105 and 107 of the Austrian Labour Constitution (ArbVG) does not apply, and a dismissal or termination cannot be challenged.
The Supreme Court had no concerns under EU law about not taking into account a foreign company of sufficient size in which the employee was integrated: General protection against dismissal does not fall within the scope of EU law, so that the Charter of Fundamental Rights does not apply. Nor is there any restriction on the free movement of workers under Article 45 TFEU.
This decision by the Supreme Court is an important step towards legal certainty for companies operating across borders. We would be happy to advise and support you in the drafting and termination of cross-border employment relationships.
