Landmark Court Decisions in Employment Law

In the sixth episode of our podcast, Ralf Peschek and Anna Schwamberger give an overview of landmark Supreme Court cases of the last 18 months. They have selected 14 precedent-setting decisions by the Austrian Supreme Court, the Higher Regional Court of Vienna and the ECJ that consider unusual circumstances and will be relevant for employers’ practice.

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• Determining a bonus amount in the absence of a target agreement (OLG Wien 9 Ra 61/21p). The court ruled that a supplementary interpretation needs to be made with a fair and honest assessment by both parties of what would have been concluded. Different factors shall be considered for the interpretation, such as target agreements of previous years or an average of past years.

• The extent to which an employer can prohibit the display of religious symbols at the workplace (ECJ C-804/18). The case considered an employer, a childcare organisation, who prohibited employees to wear a headscarf and a religious cross. The decision said that this does not necessarily constitute a direct discrimination, in particular, if an employer can prove their operational necessity and if the employer is consistent in imposing this requirement by applying it to all employees and all religious symbols of all sizes.

• Employment termination following request for a remedy against sexual harassment by a third party (OGH 9 ObA 110/21y). The plaintiff challenged the termination on the basis of the Equal Treatment Act, claiming that the termination was a result of the assertion of justified claims. The plaintiff previously turned to the employer and requested remedy against sexual harassment. The court ruled that the lightened burden of proof applies both to direct and indirect discrimination based on sex. As such, the court saw the termination of employment as discriminatory, as the initial claim of the plaintiff fell under the scope of the Equal Treatment Act.

• Employment termination on the grounds of refusal to wear a mask – no discrimination because of worldview (OGH 9 ObA 130/21i). A plaintiff claimed that the termination of her employment was a discrimination related to plaintiff’s worldview that COVID-virus was nothing more than a type of flu and her refusal to wear a protective mask. The decision confirmed her opinion does not constitute a worldview that is protected under the law. The termination thus was not discriminatory.

• Dismissal after a warning for not wearing protective mask at work (OLG 8 Ra 49/21s). The court ruled that the reasons for the dismissal did not constitute a bad motive and that health protection of employees, customers and business partners was legitimately regulated. It is worth noting that the Covid Protection Ordinance was applicable at the time of termination and there was a respective works council agreement in place.

• Dismissal of a supervisor on the grounds of sexual harassment of an employee (OGH 9 Ra 91/21z). The court dismissed the supervisor’s dismissal appeal, after the supervisor sexually harassed a female employee. Given the fact that the supervisor’s behaviour violated the employee’s sexual sphere and that he did not refrain from his behaviour even after being asked to stop, the court confirmed the dismissal as ultima ratio. The court did not see the need to consider other possible remedies, such as a transfer or a spatial separation. This case shows that courts are increasingly taking the protection of victims of sexual harassment more seriously.

• Forfeiture of surcharges to overtime pay in the event of an invalid flexitime agreement (OGH 8 ObS 9/20m). The Austria Supreme Court ruled that a flexitime agreement is only effective, if it contains all necessary details and is done in writing. In this case, the works agreement was described as legally ineffective which would have resulted in a claim for outstanding surcharges for overtime work. The court ruled that the claim for the surcharges are subject to the forfeiture provisions of the collective bargaining agreement, which in this case lead to the claims being forfeited.

• No continued payment of remuneration after a negligent bicycle accident (OGH 8 ObA 49/21w). The employee put his jacket on the bicycle handlebars while riding. His jacket slipped into his front wheel, blocking it and causing an accident. The employer denied continued payment of remuneration, as apparently the same behaviour by the employee already almost caused an accident earlier on that same day. The court decided that the employee must have been able to assess the consequences of his behaviour and that the decision to do this again therefore constituted gross negligence. This case provokes a question whether practicing inherently dangerous sports could be interpreted as a gross negligence in case of an accident.

• Request for training cost reimbursement post factum (OGH 9 ObA 85/21x). The court’s decision emphasised the need for transparency by an employer when making a decision regarding financial commitments related to the reimbursement of training costs. The court clearly states that a reimbursement agreement for training costs with the employer must be agreed upon before a training takes place.

• Accident insurance in a motorbike accident when working from home (OGH 10 ObS 183/21s). Although the accident happened during a lunch break on the working day, the Austria Supreme Court ruled the accident insurance coverage did not apply for two reasons. Firstly, the employee chose a supermarket to drive to, instead of taking a short walk to the nearest one. Secondly, by choosing a longer route the employee automatically exposed himself to unnecessary danger. Although accident protection is widely discussed especially in connection with working from home, this does not make the employer directly financially liable, as the costs are covered by an insurance company.

• Termination in a small cross-border business (OLG Wien 10 Ra 39/21k). An employee who had worked for a small Austrian distribution network challenged his termination on the grounds that the Austrian company he was employed by was a part of a large company based in Hungary, and thus was of sufficient size to qualify for the protection against dismissal requirement. According to the decision of the Higher Regional Court of Vienna, the small Austrian company constituted an independent business with its own distribution network, and thus – in the absence of a business subject to works council representation due to its size – termination protection does not apply.

• Job opportunities assessment for an employee working mainly abroad in the context of a challenge of his termination (OLG Wien 9 Ra 23/21z). The employee was as a Sales Director and travelled approximately 20 out of 30 days a month. In the context of his termination appeal, the court decided that in this case, the job search should be extended to the international job market because of his previous mobility. As a result, the court decision was in favour of the employer, because no significant deterioration could be detected considering the job opportunities on the international market. This case brings about the question of what percentage of time performing work abroad would be accepted as predominant work from abroad. Although the court decision did not provide an answer, from a logical perspective a few days a month would be insufficient.

• Dismissal in case of a protracted illness (OGH 9 ObA 117/21b). The Austrian Supreme Court reinforces (?) the employer’s duty to make a prognosis regarding the duration of an employee’s sick leave (with this decision). The court clarifies that not only can past sick leave durations lead to the expectation of the employer, that in the future longer sick leaves might occur, but rather that the employer must consider the type of illness and its causes when making an assessment. It is not clear how employers can comply with this decision. An employer is provided only with very limited information about an employee’s illness during the employee’s sick leave. The details about sickness come to light in a course of a lawsuit, if one is filed.

• Termination during recovery from a surgery (OGH 9 ObA 45/21i). The plaintiff requested for the termination to be declared invalid as she argued that it was a discrimination on the grounds of disability. The question before the court was whether the illness in fact constituted a disability. The Austrian Supreme Court restored the initial court ruling declaring the dismissal legally valid. The reasoning for the final ruling was that the illness was not considered a disability, as none of the employee’s sick leaves have lasted for 6 months or longer and thus cannot be considered as “not temporary”. Thus, the termination did not constitute wrongful termination by discrimination. The takeaway from this case is that one must differentiate between illness and disease in connection with a possible disability. The court has at least determined a certain reference value of six months for similar future cases.