Collective Bargaining in Austria during the Covid-19 Pandemic

Abstract

Austria has a consensus-oriented system of industrial relations since 1945 which is intentionally designed to avoid the profound pre-World War II social tensions by ensuring power sharing between different societal actors and a strong inclusion of interest groups in political decision-making (Pernicka and Hefler, 2015). In terms of collective bargaining, this consensus orientation is guaranteed by the companies’ compulsory membership of chambers of employee interest groups (13 chambers, out of which the Chamber of Labour (AK), the Chamber of Economy (WKO) and the Chamber of Agriculture (LK) are the most relevant). This results in an extremely high and stable bargaining coverage with around 98 percent of all workers in the private sector covered by collective agreements (officially collective agreements are not allowed in the public sector) (Glassner and Hoffmann, 2019).

Collective bargaining agreements (CBAs) are almost without exception negotiated at a multi-employer sectoral level between the (sub-units of) relevant chambers and trade unions. These CBAs are constantly re-negotiated based on standardized procedures, usually at an annual basis. If no agreement can be reached at a negotiation round then a CBA remains in force even after it has expired, until a new collective agreement has been concluded. This entails that the majority of CBAs provide for a starting date of validity, but not an expiration date and are valid as long as they have not been cancelled by either side of the negotiating parties, or have become replaced by an updated version in the collective bargaining process (Eurofound, 2023).

Overall, this consensus-oriented system allowed for an effective tripartite dialogue system even during the COVID-19 crisis, with collective bargaining only marginally being impacted by the pandemic. Eurofound reported that negotiations in Austria were unusually quick and conflict-free in comparison to other European countries (Allinger and Adam, 2021).
This short report aims to shed more light on the development of the collective bargaining process in Austria during the COVID-19 pandemic on the basis of data collected from relevant Austrian negotiating parties.