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Notice periods in Austria

Termination of employment in Austria

Post-termination restraints in Austria

Waivers in Austria

Transfer of undertakings in Austria

Avoid risk and missed opportunities with our end-to-end employment solutions

End of employment in Austria

Every employment relationship comes to an end. And, if you want to protect your business, it’s important to understand what that process looks like. In Austria, there are multiple different ways that an employment contract can be terminated, including termination by mutual agreement, unilateral termination, and summary dismissal. The rules are different in each specific situation.

In this section, we’ll take you through the various ways that an employment relationship can end in Austria. We’ll also discuss the notice periods that apply to both employees and employers, the post-termination restraints that it’s possible to impose on employees in Austria, and the rules surrounding employee rights after a transfer of undertakings.

Notice periods in Austria

In Austria, both employers and employees can end their employment contract at any time without giving a reason. However, they must give the correct amount of notice to the other party. While giving notice verbally is possible, written notice is recommended to avoid ambiguity or disputes. Until 2021, there were different notice periods in Austria for white and blue-collar workers. These have now been unified and the same notice periods apply to everyone.

Notice periods in Austria for employers and employees

When an employee terminates an employment contract in Austria, they must give one month’s notice. For employers, the statutory notice period depends on how long the employer has been engaged. The legal minimum notice periods for employers are as follows:

Up to two years of employment: Six weeks.
2–5 years of employment: Two months.
5–15 years of employment: Four months.
More than 25 years of employment: Five months.

The notice period can be increased to up to six months based on an agreement between the employee and the employer or the collective bargaining agreement that applies.

Severance pay in Austria

There are currently two systems of severance pay in Austria. Which one applies depends on whether the employee’s contract began before or after 1 January 2003. For those whose contract began after this date, employers must pay 1.53% of the employee’s salary into an external fund to cover severance pay.

The employee may then be able to claim severance pay from this fund if they are dismissed without cause, but they can’t claim anything from the employer themselves. Under the old system, employees can claim severance pay directly from the employer.

Probationary periods in Austria

It’s common practice for employers to include a probationary period in their contracts in Austria. During this period, either the employer or the employee can terminate the contract without giving notice. Probationary periods in Austria must not exceed one month (three months for apprenticeships).

Termination of employment in Austria

There are a few different ways that an employment contract can be terminated in Austria, with different rules applying to each situation. Read on for some of the most common ways of ending a contract.

Termination by mutual consent in Austria

Termination by mutual consent is when an employer and an employee agree between themselves to end an employment contract. No notice period is required in this case. Termination by mutual consent can happen verbally or in writing, though written termination is recommended.

Unilateral termination in Austria

Unilateral termination is when either the employee or the employer decides to terminate the contract. They do not have to give a reason for terminating the contract but must give the other party the correct amount of notice as defined by Austrian labour laws. The standard notice period for employees is one month, and the notice period for employers depends on how long the worker has been employed.

Summary dismissal in Austria

Summary dismissal is another form of termination of employment in Austria. Employers must have a valid reason for dismissing an employee, such as a persistent neglect of duties. Dismissal is effective immediately and no notice period is required. Employers can dismiss employees verbally, in writing, or implicitly.

Resignation in Austria

Employees can also resign from their posts without giving notice if they have a good reason. For example, this would be appropriate in the case of gross neglect of duty by the employer.

Termination of fixed-term contracts in Austria

Fixed-term contracts in Austria end automatically at the expiry of their term. There is no need for either party to give notice to end the contract. It is not usually possible to terminate employment early, except in certain limited circumstances.

Protections from dismissal in Austria

In general, employers in Austria don’t have to justify ordinary dismissals. However, in organisations with five or more employees, employees have ‘General Protection against Dismissals’. This means that an employee can challenge a dismissal if it has an adverse impact on their personal life, and the employer must provide a justification.

Certain groups of employees in Austria have additional ‘Special Protection against Dismissal’. These include:

Pregnant women and those who have recently given birth.
Parents who are on parental leave or have recently returned.
Works council members.
Employees formally classified as disabled.

An employee belonging to any of these groups may only be dismissed for certain specific reasons. Employers may need the consent of the authorities in order to proceed with such a dismissal.

Collective redundancies in Austria

There are special rules that apply to collective dismissals (redundancies) in Austria. What counts as a collective dismissal depends on the size of the organisation:

Employers with 21–99 employees: Five or more employees.
Employers with 100–600 employees: 5% or more of the workforce.
Employers with more than 600 employees: At least 30 workers.
All employers: Five or more employees aged 50 or over.

In order to carry out a collective dismissal, the employer must notify the Austrian Employment Service at least 30 days in advance. If they fail to do this, the dismissals are rendered void.

Post-termination restraints in Austria

Post-termination restraints are restrictions that employers can put on their former employees after the end of their employment. These are usually only allowed if they are designed to protect the legitimate interests of the business.

Types of post-termination restraints in Austria

Here are the main types of post-termination restraints that are possible in Austria:

Non-compete agreements: These prevent employees from working for or setting up businesses that compete with their former employer.
Customer non-solicit agreements: These prevent employees from soliciting or ‘poaching’ customers from their former employer.
Employee non-solicit agreements: These prevent employees from soliciting or ‘poaching’ employees from their former employer.

Restrictions on post-termination restraints in Austria

Non-competition clauses must be concluded in the employment contract and may not exceed one year after the employment relationship is over. They are also only allowed if the employee’s income is above a certain threshold. A non-competition clause may not cause undue hardship to the employee’s career.

Waivers in Austria

In some countries, it’s possible for employees to waive their statutory rights as part of a settlement agreement with their employer. This is typically not possible in Austria and any such waiver would be considered invalid by an Austrian court.

Transfer of undertakings in Austria

A transfer of undertakings is when one business entity is wholly or partially acquired by another company. In Austria, there are specific rules concerning what happens to the employees of the transferred entity when this happens.

What constitutes a transfer of undertakings in Austria?

In Austria, the rules concerning transfers of undertakings only apply to the change of ownership (Betriebsübergang) of a business or part of a business. This usually involves either:

The transfer of licences, patents, copyrights, logistics systems, or software.
The transfer of more than 10% of the employees of the business.

Employee rights after a transfer of undertakings in Austria

When employees are transferred to another company as part of a transfer of undertakings, the new employer must take over all rights and obligations of each individual employment contract. They must also take over the occupational pension scheme and any work agreements.

Any changes to employment contracts can only be made through mutual agreement between the employer and the employee. Decreasing the employee’s compensation is not permitted. A transfer of undertakings is also not a valid ground for dismissing an employee in Austria. If any dismissals occur within 6–9 months of the transfer, the employee may be able to make a claim for unfair dismissal (they would need some evidence that the dismissal was related to the transfer).

Consulting and information obligations

Employers in Austria have a duty to consult with and inform employees and or the works council (if applicable) before the transfer.

Avoid risk and missed opportunities with our end-to-end employment solutions

There are many different ways an employment contract can come to an end. But whatever the situation, you need to understand the rules that cover the end of employment in Austria — or you could end up facing legal issues.

Our solutions ensure your business is protected from risk when a relationship with a worker comes to an end — whatever the reason. We can also help you to avoid missed opportunities by re-deploying talent where possible

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FAQ's

What are the ways employment can be terminated in Austria?

Employment can end through ordinary notice, mutual agreement, immediate dismissal, justified early departure, the end of a fixed term or termination during probation. The rules for termination of employment in Austria change depending on the route and who starts the process.

Either party can end an indefinite contract by giving ordinary notice and following the correct notice period and end date. Employers usually do not need to give a reason, although special protections and unlawful motives may limit that right. The employer and employee can also agree together when the relationship will end.

Immediate dismissal is reserved for serious misconduct or another major reason. An employee can also leave immediately when the employer commits a serious breach. A fixed-term contract usually ends on the agreed date, while either party can end employment during a valid probationary period without notice.

Ordinary notice does not generally have to be in writing unless legislation, the applicable collective agreement or the employment contract requires it. Written notice is nevertheless advisable because the date on which notice reaches the other party determines when the notice period begins. Using the wrong route can affect notice, pay and whether the employee can challenge the decision.

What is the notice period for termination of employment in Austria?

Employees normally give one month’s notice, while employers give between six weeks and five months depending on service. The employer’s notice period in Austria increases as follows.

During the first and second years of service: six weeks.

After completing two years: two months.

After completing five years: three months.

After completing 15 years: four months.

After completing 25 years: five months.

An agreement can extend the employee’s notice to a maximum of six months, but the employer cannot then have a shorter period. Some seasonal industries may have different rules under a collective agreement.

The end date matters as much as the length of notice. Employers normally end employment at the close of a calendar quarter, although a contract may also allow the 15th or last day of a month. Notice must reach the other party early enough to satisfy both rules.

What payments are due to an employee at the end of employment in Austria?

Final pay normally covers salary through the last day, earned variable pay, unused annual leave and a share of any special payments. At the end of contracts in Austria, severance or compensation may also be due depending on the circumstances.

The employer must pay for work already completed, including approved overtime and any bonus or commission earned under the employee’s terms. Unused leave from the current year is paid in proportion to the time worked, after deducting leave already taken.

Valid leave carried over from earlier years is generally paid in full, provided it has not become time barred. Collective agreements often determine how much holiday or Christmas pay is included.

If the employer used the wrong notice period or end date, the employee may also receive the pay they would have earned under a correct termination. Severance depends on whether the old or new statutory system applies. A clear final payslip helps the employee understand each amount and its tax and social security treatment.

What are the severance pay rules in Austria?

For most employees in Austria, employers pay 1.53% of the employee’s monthly salary and special payments into an occupational severance fund. The contributions belong to the employee and remain in the fund when employment ends.

This system, known as Abfertigung Neu, generally applies to employment relationships that started on or after 1 January 2003. Contributions begin after the first month of employment.

Employees with at least three contribution years can generally request a payout when employment ends through employer termination, mutual agreement or expiry of a fixed-term contract. Payment may also be available following a justified early departure by the employee, an unjustified immediate dismissal, retirement or certain other statutory events. Contribution periods with different employers are combined when assessing the three-year requirement.

If the employee resigns ordinarily, leaves without justification, is dismissed immediately for a valid reason or has not yet accumulated three contribution years, , the money stays in the fund and can be carried forward to future employment.

Employees whose employment began before 2003 may still fall under the old severance system. Under those rules, qualifying severance is paid directly by the employer, and the amount is based on length of service and the way the employment relationship ends.

How do fixed-term employment contracts end in Austria?

A fixed-term contract normally ends automatically on its agreed date or when the specified event occurs. Neither party usually needs to give notice for this end of contract in Austria, although the employment terms should record the date or event clearly.

The employer or employee can end the contract early through ordinary notice only when its terms or another applicable agreement allow it. They can still agree together to finish the relationship earlier. Either party may also end it immediately for a serious reason, but the circumstances must justify that step.

Employers need an objective justification for repeatedly renewing fixed-term contracts. Without one, a chain of contracts may be treated as indefinite employment, bringing the usual notice rules into play. The same risk can arise if the employee simply continues working after the agreed end and no new fixed term is clearly established. Both the written terms and what happens after the expiry date matter.

Can employers enforce non-compete clauses in Austria?

Employers can enforce a post-employment non-compete only when it meets the legal limits and remains reasonable. After termination of employment in Austria, the restriction cannot unfairly prevent a former employee from working in their profession.

For current agreements, the employee must have been an adult when the clause was signed and, for employment ending in 2026, the remuneration due for the final month must exceed EUR 4,620 gross, excluding the proportionate number of special payments. Different thresholds apply to older agreements, and the earnings threshold is updated periodically.

The clause can cover only the employer’s business area, last no more than one year and go no further than needed to protect the business. The way employment ends also affects enforcement. An employer that gives ordinary notice generally cannot rely on the clause. It may still apply after employee resignation, mutual agreement or the expiry of a fixed term. A court can consider the duration, geographic area, business scope and impact on the employee. Wide wording alone does not make a clause enforceable.

What is the Kündigungstermin in Austria and how does it affect termination?

The Kündigungstermin (permitted termination date) is the date on which employment is allowed to end. It works alongside the notice period in Austria, which is the time between the employee receiving notice and the final day.

When an employer gives notice, the default end dates are the last days of calendar quarters. A contract can usually add the 15th or final day of a month. Employees generally end employment on the last day of a month. Some seasonal industries may follow different dates under a collective agreement.

Both the period and the end date must be correct. An employer might allow enough weeks or months but choose a date that the contract does not permit. Notice must arrive early enough to complete the required period before an allowed end date. If either rule is missed, employment usually ends on the stated date, but the employer may have to pay compensation.

Can an employee challenge a dismissal in Austria?

Yes, an employee may challenge a dismissal based on an unlawful motive, discrimination or social unfairness when the legal conditions are met. A challenge to termination of employment in Austria goes before the Labour and Social Court.

A social unfairness claim generally concerns an employee with at least six months’ service in a workplace with five or more employees. The dismissal must seriously affect the employee’s interests. The employer may defend it by showing a strong business reason or a reason connected with the employee. Other protections apply to discrimination, trade-union activity and the exercise of certain workplace rights.

Where a works council exists, the employer must inform it before giving notice. What the council says can affect who may challenge the dismissal and on what grounds. Deadlines are extremely short, usually two weeks and sometimes one week. That gives both the consultation step and the timing of any court claim real importance.

What happens if an employer gives insufficient notice in Austria?

Employment usually still ends on the stated date, but the employer may have to compensate the employee for the missing notice. If the correct notice period in Austria or allowed end date is missed, the payment should put the employee in the position they would have been in under proper notice.

Compensation normally covers the salary due up to the correct end date. It can also include a share of holiday and Christmas payments, other regular earnings and the annual leave that would have built up during that time.

For compensation covering the first three months after termination, the employee generally receives the amount without deductions for earnings elsewhere or expenses saved. For a compensation period extending beyond three months, amounts the employee earned, saved or deliberately failed to earn may generally be deducted from the later portion.

The usual outcome is compensation, not a later end date. An employee generally has six months from the end of employment to enforce a disputed statutory claim for notice compensation in court. A collective agreement or contract may set shorter deadlines for other claims. Employers need to check both the notice period and the permitted end date before issuing notice.

How can CXC simplify the end of employment management in Austria?

CXC helps companies manage employee exits in Austria by handling the local offboarding requirements, including notice periods, final payroll, severance contributions and employment documentation.

Through our Employer of Record service, we also account for the employee’s contract and applicable collective agreement when managing the end of employment. Where additional requirements apply, such as works council involvement or special dismissal protection, these can be identified as part of the offboarding process.

Your company continues to make the decision to end the employment relationship, while CXC manages the local employment administration and final payroll.

Speak to our team to learn more about managing employee offboarding in Austria with CXC.

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