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Austria – Staffing firms against change in temporary law consider legal action

13 April 2012

Austria plans to introduce the temporary employment act (AÜG) which aims to give temporary workers more protection. But staffing firms in the country, including the two biggest players Trenkwalder and ManpowerGroup, believe this new law could endanger some of the 250,000 temporary vacancies currently on the market, make temporary employment more expensive and hence drive industry activities abroad.

Particularly the planned charge of €110, which will be applicable when the employment service between temporary staff and employment agencies is terminated, has angered some in the industry. Michael Wottawa of the Austrian staffing firm StartPeople said that this was “pure injustice” and said his company was currently considering filing a lawsuit against this.

Meanwhile the managing director of ManpowerGroup Austria, Erich Pichorner, said in a recent interview with the Austrian newspaper Kurier that he was not against the equal pay for equal work principle that would be implemented with the AÜG. The problem lies in whether the legislation would be feasible from an administrative point of view. He said, “We already administrate various collective agreements. In the future we will have to ask each company for the firm-specific agreements, bonuses, etc. This is not possible. With this, the system of temporary work would lead to the point of absurdity.”

There are around 80,000 temporary workers in Austria and the country has made use of a well-established collective agreement which has improved legal security and pay for temporary workers.

But Mr Pichorner emphasised that the legislative change would increase complexity and “will not make services cheaper.” He also argued that the AÜG will not offer more employee protection as labour will become more expensive. “We forget that we are surrounded by countries where work is cheaper than here.”  

He also said that current intentions of the trade union ÖGB to “abolish” temporary employment in Austria has been ongoing for years. It was a “big misapprehension” that less temporary work will increase full-time employment as this could lead to a rise in black market activity, he argued.

Nonetheless, he admitted that there were certain “problems” in the temporary staffing industry that needed to be addressed, such as discrimination. Overall, he denounced accusations that temporary workers are “second class workers” as other sectors on the labour market have to deal with similar issues.

The employment act was under assessment until 4 April and is expected to come into force on 1 July 2012.

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