Backgrounds and information for Germany

Test

Following the pandemic-induced economic downturn in 2020, when gross domestic product (GDP) decreased by 6.5% (in real terms), the economy has recovered. GDP increased by 4.6% in 2021 and 4.7% in 2022 – with a substantial increase in the first half of 2022 and a decline in the second half, in line with the international trend. A small increase in GDP of 0.3% was forecast for 2023.

• The labour market situation was very satisfactory throughout 2022: the number of employed people increased by 109,000 compared with 2021 (a change of 2.9%), and the number of unemployed people decreased by over 69,000, or 17.3%,

• compared with 2021. In 2022, unemployment was at its lowest since 2012, with 332,645 people unemployed (AMS, 2023). The unemployment rate declined significantly to 4.8% in 2022 (Eurostat [une_rt_m]). In line with the global situation, inflation was high in Austria, at 8.5%, and was expected to decrease in 2023. The most recent peak was reached in January 2023, at 11.2%.

• WIFO (Austrian Institute of Economic Research): Weltweiter Konjunkturabschwung erfasst Österreich: Video – Prognose für 2022 bis 2024

There is an abundance of legislation in Austria dealing with different aspects of labour law. However, the central legislative enactment in Austrian labour law is the Labour Constitution Act (Arbeitsverfassungsgesetz , ArbVG). This law regulates the collective interest representation on the two sides of industry at and above company level; it also regulates collective bargaining. No major changes to the labour code have been made in recent years.

For historical reasons (bitter class struggles in the First Republic, experiences of Austrofascism and the Nazi regime), the characteristic feature of the Second Republic is a strong commitment to the principle of harmonious cooperation. In the industrial relations system, this principle has found expression organisationally in the creation of collective interest organisations representing employers and employees that are widely inclusive, extend across party-political lines and are free from rivalry. The basic structure of this commitment to harmonious cooperation in Austria is its system of social partnership. In terms of societal values, this denotes readiness on the part of government and the collective organisations to make all social and economic issues the subject of negotiations as a means of arriving at consensual solutions. Institutionally, social partnership is a complex system built on co-determination within the establishment at micro level, the collective bargaining system at meso level, and tripartite and bipartite forms of concertation at macro level. Whereas the government invites an exclusive circle of social partner organisations to participate in all decisions on economic and social policy, the regulation of the terms and conditions of employment remains the autonomous province of the labour market parties, within the framework laid down by the ArbVG. The core area of industrial relations remains free from substantive state intervention.

Although the Austrian system of social partnership was overtly challenged during the period of the conservative–populist coalition government from 2000 to 2006, Austrian corporatism has largely recovered since the mid-2000s. The country’s system of collective bargaining, which takes place almost exclusively at branch/sectoral level, has continued to work, despite the fact that in the wake of the Great Recession (which occurred in 2007–2009) wage accords and collective agreements could in some cases be settled only after the threat of industrial action, which is unusual in Austria. With the reinstatement of a conservative–populist coalition government in late 2017, the social partners’ influence on overall policymaking was limited once more. When drafting new legislation in the area of social and employment policies, the government regularly overlooked the stances and views of organised labour, while the positions of organised business often proved to be congruent with the government’s intentions. The government lost power abruptly in 2019 due to a political scandal involving the far-right junior coalition partner, and a conservative–green coalition government was installed in early 2020. This resulted – especially in the context of the pandemic and the associated need to quickly adjust employment and social policies – in greater consideration of employees’ stances. However, this did not occur to the same extent as it did during periods when the Social Democratic Party, which is the most important political ally of organised labour, participated in government.

In the face of the COVID-19 crisis, the maintenance of social peace was an important factor for the government. Therefore, the social partners were again meaningfully involved in policymaking, albeit to varying degrees. With the participation of the more labour-friendly Greens in government, organised labour was cautiously brought back to the policymaking process and could exert some influence again. However, the trade unions were somewhat less successful in enforcing their demands than organised business. The employer organisations (which had close ties to the Chancellor’s party) participated in decision-making on most of the major measures concerning their members. The social partners themselves prepared an agreement on the very generous short-time work scheme implemented during the COVID-19 pandemic, which allowed for a temporary reduction in working hours to zero. The agreement was extended several times and was still in effect in mid-2023 (with the possibility of a further extension). It, along with an agreement on the regulation of working from home, was enshrined in law and implemented by the government in spring 2021. The involvement of the social partners in policymaking also had a positive effect on social dialogue and collective bargaining. Facing the most difficult economic situation in decades, with a severe economic recession, very high unemployment and a high incidence of short-time work, collective bargaining was – with few exceptions – peaceful and unusually quick in the first two years of the pandemic. In many sectors (for instance, in the pattern-setting metalworking sector), agreements were found in the first round of negotiations, as there was not much room for wage bargaining, with agreements mostly just compensating for inflation. The social partners also agreed on the first general collective agreement (applying to virtually the whole economy) in decades, on COVID-19 testing in the workplace, in tandem with federal legislation. The well-established social partnership performs at its best in times of crisis, it seems. In 2022, collective bargaining became somewhat more conflictual again in the face of the extremely unusual economic situation, with record inflation rates. In some sectors, discussions were prolonged and negotiations were difficult. However, wage agreements that were acceptable to both sides were mostly concluded quite quickly. The social partners were involved in a tripartite meeting with the government in spring 2022 in which they proposed several measures targeted towards alleviating the impact of rising prices, and they were also involved in the expert group for the observation and analysis of trends in inflation that was set up by the government in spring 2022. Thus, they were at least indirectly involved in the design of measures that were implemented by the government in the form of several relief packages.