Austrian Law Blog:


Can employees object to the transfer of their employment to another business entity?

Employees have no general right to object to the transfer of their employment, except in cases where the new employer is not willing to guarantee the continuation of already existing company pension schemes or refuses protection against termination of their employment in accordance with those provisions of the collective agreement that were applicable before the transfer of business occurred.

Pursuant to Section 3 of the Austrian Employment Contract Law Harmonisation Act (AVRAG) the new employer must take over all employees and automatically enters into all existing employment contracts.  All rights and obligations set out in the employment contracts must remain unchanged.

The question has been raised in the past whether or not an employee should be granted a general right to object to the transfer of the employment arguing than employees enjoy the fundamental right to freely choose their employer. Already in the 1990s, the European Court of Justice (ECJ) clarified (in joint cases C-132/91, C-138/91 and C-139/91) that the EU Directive on Business Transfer, being the legal basis of the corresponding Austrian law, would allow EU Member States to provide for an employee’s general right to object to a transfer of employment, however, the directive does not oblige EU Member States to foresee such in general.

In 2011, the Austrian Supreme Court (OGH) acknowledged (in 8 ObA 41/10b) that the purpose of Art 3 of the AVRAG is to secure the employees’ already existing rights and working conditions in case of a business transfer. Furthermore, the court noted that the law grants the employee an exceptional right to terminate the employment in case general working conditions should have changed significantly to the detriment of the employee if a different collective agreement should have become applicable as a consequence of the business transfer. The employee’s right to object to the transfer of the employment, however, shall not be extended to other circumstances than those expressly intended by the law.  

Although the discussion is still ongoing, recently the Austrian Supreme Court (in 9 ObA 14/21f) has again confirmed its previous decision concerning the same subject matter and denied a general right of an employee to object to the transfer of his employment to another business entity.  

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