Austria: Get insight into recent Austrian Supreme Court decisions


The Austrian Supreme Court recently held that minimum wages provided by a collective bargaining agreement must be paid in cash, unless otherwise explicitly stated in the collective agreement. In another recent ruling from 24 September 2015, the Austrian Supreme Court held that a bus driver could not be dismissed on the ground that he wore a pink hair tie despite his employer's instructions to the contrary.

Minimum wage in relation to collective bargaining agreements

The Supreme Court held that the minimum wage cannot be paid in the form of benefits in kind unless it is explicitly stated by the applicable collective bargaining agreement.

New ruling by the Supreme Court of 27 August 2015 (OGH 9 ObA 92/15t)
In this case, the claimant worked as a sales representative and was given a company car, which he was also allowed to use in his free time. The employment contract stated that the private use of the car should be considered part of the employee’s monthly minimum wage according to the applicable collective bargaining agreement.

The employee did not agree with this wage provision and went to court to claim the missing amount of money in cash provided by the collective bargaining agreement. The Primary Court, Secondary Court and Supreme Court decided that the minimum wage provided by the collective bargaining agreement is an amount of money that is essential for securing subsistence and must be available for the employee’s free disposal.

Therefore, the minimum wage must be paid unless the contrary is stated in the collective bargaining agreement. Even if a payment in the form of benefits might be more favourable or beneficial to the employee, the minimum wage must be provided in cash.


Balancing of interests in case of termination of employment

An employer’s business interest in a uniform appearance of its employees did not prohibit an employee from wearing a pink hair tie during his work as the driver of a public transport vehicle.

New ruling by the Supreme Court of 27 August 2015 (OGH 9 ObA 82/15x)

In this case, the claimant, a national public transport company, requested the court’s approval to dismiss an employee because he breached his duties by not respecting the employer’s instruction to remove his pink hair tie during work.

The respondent is employed as a driver of the public transport company, currently working on parental part-time. He is therefore protected from dismissal in that any termination of the employment is only valid if the court’s approval is given.

At the beginning of the employment relationship, the employee wore a black hair tie for his ponytail during work, which was accepted by the employer. After some time, he changed to wearing a pink hair tie. The employer instructed him orally to take it off several times because it did not fit with the employee’s work uniform and looked unprofessional to passengers. The employee ignored the instruction. As a result, the employer suspended the employee from work and asked for the court’s approval to terminate the employment relationship.

The lower court and the appeal court decided in favour of the claimant. According to both courts, the employer was justified in requiring a uniform and "professional" appearance of all employees in public transport vehicles. A bright coloured hair tie might be disturbing for passengers and the employee’s refusal to remove it constitutes a breach of the employee’s duties.

The Supreme Court overruled this decision, stating that, in accordance with the Fathers Leave Act, a person working on parental part-time enjoys special protection against dismissal. Any dismissal would only be possible due to conduct of the employee that has such an adverse effect on the interest of the company, it constitutes unreasonableness to continue the employment relationship.

The Supreme Court argued that in cases in which an employer’s instruction may affect the right of personality of an employee, a balancing of interests must be made. Only if the employer’s economic interest outweighs the employee’s interest in wearing the hair tie, will dismissal be justified.

The Supreme Court declared that the employer had no justified interest in prohibiting the colourful hair tie, because no disturbance or negative effects on business interests can be assumed. Consequently, by wearing the pink hair tie the employee did not violate his duties arising from the employment relationship.

The Supreme Court denied approval to dismissal.