Austria

According to Labor Law, an employee is an individual who is personally obligated to and dependent on another individual to furnish him/her services based on a work agreement. As a rule, a valid work agreement, or a written work agreement, respectively, is usually not absolutely necessary. The personal dependency, however, is an essential characteristic of the employee.

2. When does an employment relationship exist?

An employment relationship exists when an individual obligates himself/herself to perform work for someone else for a certain period of time. The employee is obligated to perform certain tasks during a certain period of time; however, he/she is not obligated to achieve a certain success by the work performed.

The Work Agreement does not require a definite format. It can be arranged between the two contract partners (employer and employee) in a written, verbal or other conclusive manner.

3. and 4. What must a work agreement contain? Is there a legal regulation dictating the requirement of a written work agreement, and, if so, in what cases is this necessary?

The Work or Service Agreement results from any agreement of the parties to enter into a dependent service or employment relationship which is, for the most part, determined by someone else, and is entered into from a definite point in time and with certain duties or work obligations. The conditions of the employment, as to content, do not have to be discussed precisely in the employment agreement. If, for example, the remuneration is not discussed, the collectively-agreed minimum wage will apply in case of doubt. Stipulations under the Labor Law, including those of the collective agreement, are automatically in force.

According to Section 2, Paragraph 2 of the Labor Contract Adaptation Law (AVRAG) the Work Agreement must contain the following information:

Name and mailing address of Employer and Employee, and start of the employment relationship. In cases of an employment relationship for a definite period of time, it must contain the end of the employment relationship, the period of notice, contractual date for termination, usual work location or place of deployment, respectively, possible classification into a general scheme, anticipated utilization, starting wages (base salary or base wages, additional elements of remuneration), when remuneration is due and payable, annual vacation time, agreed daily or weekly normal working hours, determination of standards of collective legal remedy that might possibly have to be used (Collective Agreement, minimum wage tariff, company agreement) as well as name and mailing address of the Employee Pension Fund of the Employer.

Apprenticeship agreements may also be made on the basis of verbal agreements, but must be followed up by a written agreement within 3 weeks and must be registered with the Chamber of Commerce and Industry care of the Apprenticeship Division, unless the Apprenticeship Division was already involved in the preparation of the agreement.

If a written work agreement is not prepared, then the employer usually issues a short-form work/service note. The work/service note is a written compilation of verbal agreements that have been made between employer and employee. Therefore, if the work/service note contains provisions which were not agreed to in the verbal agreement, then those provisions are not in effect. A work/service note serves as evidentiary document to reiterate the content of the work agreement. On request, employees who have already started their employment, have to be provided with a work/service note within 2 months, if they have not already received a work/service note or a written work agreement with the required content (section 2, Paragraph 7 AVRAG and Sect. 6, Para. 3 of the Employee Law, AngG).

5. What is the definition of the termination of a work relationship for economic reasons? What is the function of the Company Council in connection with economic matters? When is there an obligation to maintain an early-warning system?

Economic or situations within a company which prevent continuation of employment of an employee are, for example:

1) Lack of orders or a decrease in sales

2) Necessity of streamlining measures

3) Low profit conditions, credit difficulties

4) Supply difficulties for raw and other materials

5) Breakdown of equipment, loss of gas or power for an extended period of time

Basically, a termination that is necessitated by conditions within a company is only justified, if it is absolutely necessary for the continuation of the operation. Hereby, however, the effectiveness and correctness of the operational streamlining measures are not to be examined, and the evaluation of their economic justification remains with the owner of the company. Within the so-called obligation to the society, the owner is, however, obligated to exhaust all possibilities – in spite of cutting back and in spite of streamlining his company - for continuing the employment of his current employees. The employer may not terminate employees without cause and replace them with new employees. Within the company streamlining and reorganization measures, etc. the employer must give his current employees reasonable chances for retraining and adjusting. The affected employee must, however, be willing to be moved to another work station within the company for the necessary training or retraining.

In case of a termination, further employment possibilities of the affected employee within the company as a whole must be considered. If the affected employee may be utilized in a different department, then the termination is not justified from the point of view of the company.

The obligation of the company owner to society, however, does not reach as far as employing the current employee in a position requiring many fewer qualifications with the same remuneration. If, in such a situation, the employee refuses to accept a small decrease in salary, then the employer may not be held accountable. The termination may then be justified from the point of view of the company. In case of a necessary decrease in the number of work places, aliens are to be terminated first. (see Section 8, Paragraph 2 lit. a Alien Employment Law, AuslBG).

Reaching a Social Settlement:

In case of a termination because of company necessities which oppose continuation of the employment of an employee, and if the company council expressly rejects this measure, the terminated employee may file a claim for a social settlement.

This states that the termination of an employee is not socially justified if a settlement on the basis of social criteria results in a greater hardship for the terminated employee than for other employees of the same company and of the same type of employment whose type of work the respective terminated employee was willing and able to perform. In actuality this means that during a social settlement the employer must examine whether or not a different employee should be terminated. Hereby the social situations of the individuals in question are to be examined in all issues which are important in the decision-making.

No social settlement is to be carried out if the company council has not stated its position within a term of 5 days and the employee himself/herself is fighting the termination. By a successful contesting of the termination in the courts, the termination is rescinded as legally ineffective. All wages from the point in time of the termination until the resumption of work must be paid retroactively. If the termination is effective, then the terminated employee may claim remuneration due him until the end of his employment relationship, vacation time, severance pay and possibly special payments.

6. To which procedure must an Employer adhere if he terminates an Employer/Employee relationship for economic reasons?

If a dissolution of work relationships is planned which involves an obligation to register with the work market service, then the company owner must, in any case, inform the company council in writing regarding: a) the reasons for this measure, b) the number and the utilization of the intended employees in question, their qualifications and employment duration as well as the criteria for the selection of these employees, c) the number and utilization of the regular employees, d) the period of time in which the planned measures are to be carried out, e) possible alternative measures to be implemented to prevent disadvantageous consequences for the respective employees.

According to Section 111, Paragraph 1 of the Labor Constitutional Law (ArbVG), the Company Council may lodge an appeal with the owner of the company against the company changes or against other economic measures within 3 days after the same becomes known to it, if the changes constitute essential disadvantages for the employees.

A prerequisite, however, is, that it concerns a company with at least 200 permanent employees, or a company with more than 400 permanent employees, whereby more than 200 employees are affected by the economic measures. This appeal, however, has no immediate effect on the work relationships affected by this measure.

An appeal by the company council against the planned closing of a company, however, has a direct effect. That means that, if an appeal is filed against such a closing of a company, then, in accordance with Section 111, Paragraph 2 ArbVG, this appeal has a postponement effect of at most a period of 4 weeks starting from the day of notice by the company owner to the company council.

Early Warning System

The employer must send a written notification to the regional office of the labor market service responsible for the location of the business if he intends to terminate the work relationships within the following 30 days – this also includes part-time employees - as follows:

1) of 5 employees in businesses (as a rule) with more than 20 and less than 100

employees

2) of at least 5 % of employees in businesses with 100 – 600 employees or

3) of at least 30 employees in businesses (as a rule) with more than 600 employees, and

4) of at least 5 employees, who have completed their 50^th year of age.

The notice must be sent to the regional office of the labor market service at least 30 days prior to the first declaration of dissolution of a work relationship. This notification must include exact information regarding the grounds for the dissolution of the employment relationship as well as information regarding the individuals who are affected by it. At the same time it must also be proven that the company council had been consulted. If there is no company council, then a copy of the notification is to be sent promptly to the employees who are to be affected by the dissolution.

After the notification has taken place, the offices of the labor market administration must conduct all discussions that are necessary regarding the intended dissolution of the employment relationships. The employer, the company council and legal representatives of relevant interests and volunteer occupational associations of employers and employees must especially be invited to these meetings.

7. and 8. In Austria is there a law against discrimination? If so, which kinds of discriminations are involved and how are they defined from a legal point of view?

In principle, an employer is not obligated to avoid preferential treatment of individuals belonging to a minority or to an entire group of employees. Likewise, some employees might be exempted for objective reasons, inasmuch as the justification for such treatment does not contradict the basic principles of our legal system. Recognized especially are temporal differentiations, i.e. from a definite date forward perquisites are not given to new employees or are made subject to having been employed with the company for a stipulated period of time or if the discriminatory treatment is the legal consequence of a company transfer to a successor; the same applies to a differentiation in the crediting of prior work periods.

Contrary to the above, the Antidiscrimination Law sees discrimination based on the sex of an individual as unacceptable. Accordingly, no one may be discriminated against with regard to remuneration, voluntary social security benefits, or company-sponsored training or further education. Discrimination, hereby, is considered to be any differentiated treatment to the disadvantage of an individual, conducted without objective justification. This includes sexual harassment.

Also the anti-discriminatory company statute provisions of Sections 37, Para. 1 and 115, Para. 3 ArbVG are for the purpose of equal treatment in cases of employment according to the provisions of the company statutes (calling of a company meeting, committee work, etc.); that is, neither an “ordinary” employee nor a company official may be treated to his disadvantage, especially regarding financial benefits also.

There is a special anti-discriminatory provision also for physically-challenged employees (Section 7 of Disabled Employment Law, BehEinstG). In many situations, the Law offers the employer special financial incentives for employing physically-challenged individuals.

Austrian Labor Law does not provide for special laws against discrimination on the basis of religion and/or race and/or ethnicity. However, similar benefits arise from the constitution (Freedom of religion and one’s conscience, Article 14, Para. 1, Constitutional Law, StGG, or Art. 9, Para. 1 of the Human Rights Convention, [MRK], respectively; and the Federal Constitution on the prohibition of racial discrimination).

Thus, discrimination is to be understood as any disadvantageous differentiation which is made without objective justification (Section 2, Para. 1 Non-Discrimination Law, and GBG). Indirect discrimination occurs if a regulation or measure is neutral as to sex, but its effects are more disadvantageous for individuals of one sex than for those of the opposite sex.

Sexual harassment is defined as behavior usually considered belonging into the sexual sphere, which affects the dignity of an individual, is not wanted by the affected individual, is improper or offensive and creates an intimidating, hostile or humiliating work atmosphere for the individual or if this behavior results in disadvantages to the affected person as to occupational training, the job itself, promotions or remuneration on the basis of the affected person accepting or tolerating such behavior (Section 2, Para. 1a and 1b GBG).

9. What legal remedy does the Employee have to fight discrimination?

If a violation of the Equal Treatment Provision of the Law occurs, then an employee has several options open to him/her for legal remedy:

a) Contacting the Equal Treatment Commission and then having a complaint files by an employee representative association which is mentioned in the Equal Treatment Law as one of the associations representing employee interests

b) Filing a Complaint with the attorney for equal treatment issues

c) Filing a direct claim against the employer and/or sexual harasser for a judgment of compensatory benefits

Independent of the legal consequences of the non-discrimination Law, there is the possibility that the employee will resign from the employment based on the discrimination; or there is the possibility of termination of a co-worker who initiated the discrimination. Basically, in case of a discrimination alleged by an employee or candidate for a position, a shift in the burden of proof is involved, inasmuch as the discriminated individual only needs to be convincing that a violation of the non-discrimination provision took place. The complaint can only be dismissed if, after all issues have been considered, the result is a higher probability that a different motive than the one substantiated by the employer was decisive in the different treatment, or being the opposite sex was the undisputable prerequisite for the work to be done (compare Section 2a, Para. 9 GBG). The shift of burden of proof, however, does not apply for cases involving sexual harassment!

If the employer has been unable to justify the violation of the non-discrimination provision, then the employer is liable towards the job candidate for compensation up to 2-month’s salary. (Sect. 2a, Para.. 1, GBG).

If the employee was not professionally promoted due to a violation of the non-discrimination provision by the employer, then the employer is liable towards the employee for damages. The claim for compensation is limited to the difference in remuneration which the employee has actually received for a period of 4 months as compared with the remuneration he/she should have received with the professional promotion (Sect. 2a, Para. 5 GBG).

An employee, against whom a sexual harassment took place may file a complaint against the individual causing the harassment, possibly also against the employer, for compensation of incurred damages. If the damages do not involve damages to or loss of property, Claimant is entitled to reasonable compensation based on the violation of his/her dignity in the amount of at least EUR 363.40 (Section 2a, Para. 7 GBG).

Compensatory claims of the described type must be filed in court within 6 months. If the employment relationship has been terminated because of the gender of the employee or because of apparently justified filing of claims (according to the Law, GBG) or has been terminated prior to the intended point in time, then the notice of termination or the termination itself may be fought in court within 14 days. It is the employee who is entitled to contest the matter and not the company council.

10. What is meant by a Termination that is not justified?

By “termination” is meant the immediate severance of an employee from the employment relationship by the employer for cause. If there are grounds for termination, the termination is justified. If there are no such grounds, the termination is not justified.

Basically, any termination – whether justified or not – ends the employment relationship on the same day on which it was announced to the employee either verbally or in writing. Exception: Individuals with special exemption from being terminated (pregnant employees, the Disabled, etc.) Section 27 AngG [Employees’ Act] recognizes the following grounds for termination:

1) Disloyalty and breach of confidentiality

2) Work disability

3) Infringement against a Non-Compete Clause

4) Unauthorized work neglect, continued refusal to work and inciting disobedient conduct

5) Inability to work because of imprisonment or detention awaiting trial

6) Battery, immorality and considerable acts of defamation

11. What remedies does an Employee have against unjustified termination?

If the employee is of the opinion that his termination was unjustified, he will have the following possibilities (Options):

a) Involving special protection from termination:

- Declaratory Action regarding the existence of the employment relationship

- Filing of a Compensatory Complaint with the Labor and Social Court (Complaint,

especially regarding settlement and claim for compensation for the termination)

b) Involving no special protection from termination:

- Contesting the termination according to Section 106 ArbVG

- Filing a Compensatory Claim with the Labor and Social Court.

In case of the compensatory claim it is to be presumed that the employment relationship ended because of the termination. An Option can only be asserted once. Hence, if a settlement was requested, later only a Compensatory Claim may be made, no filing to contest the termination,

If a declaratory action or an action contesting an issue is successful, then the employee must be paid retroactively for the time span commencing with the ineffective dissolution of his employment contract.

12. What consequences does a successful appeal of an unjustified termination have?

If the court decides in favor of the appeal, then the notice of termination or termination is ineffective. The employer must pay retroactively for the accumulative wages that have accrued in the meantime.

All wages must be paid to the employee retroactively from the date of termination until the orderly reemployment. The employee must return to his work or must be ready to return to work. However, he may also come to an agreement with the employer in the court proceedings regarding a certain date of termination.

13., 14. and 15. Are there any special legal provisions in Austria regarding collective agreements and labor unions? If so, which rights emanate from them for the employee? Which duties for the employer?

The Collective Agreement Law is regulated by the Constitutional Labor Law. Provisions of the collective agreement may be neither rescinded nor limited by company agreements nor by a work agreement. Special agreements are only valid – if not exempted by the collective agreement - if they are more favorable for the employee (Principle of favorableness) or concern matters which are not regulated by the collective agreement.

As the vocational association of employees, the Trade Union consists of dependent gainfully employed members (workers, salaried employees, governmental employees, etc.). The Trade Union represents their social, economic and cultural interests. At its head is the Austrian Federation of Trade Unions.

The Federation of Trade Unions is subdivided into 13 specialized unions, which do not have a legal personality of their own, but are to be seen as organs of the holding organization, and, therefore, execute especially the collective agreement facility on behalf of the Austrian Federation of Trade Unions.

There are separate collective agreements for workers and for salaried employees. Some collective agreements are valid in the entire area of the Federal territory; others are only valid in one or more Federal states.

According to Section 2, Para. 2 ArbVG, the following matters may have a regulating effect as part of a collective agreement:

A privity of contract among the parties of the collective agreement, reciprocal rights and obligations emanating from the work relationship between employer and employee, the modification of legal claims emanating from collective contractual rights of employees who have left the company, so-called social plans, work and extent of employees’ participation authority when carrying out company agreements regarding social plans and regarding humane working arrangements, common facilities of the collective contractual parties and, finally, matters which the law transfers to the collective agreement.

Inasmuch as the goal of the regulation concerns the actual contractual rights and obligations of the employer and the employee, the collective agreement has a shaping effect on the work agreement and, at the same time, is decisive. As a rule, a unilaterally compelling effect exists, so that more favorable individual agreements and more favorable company agreements are admissible.

Inasmuch as the collective agreement only regulates the legal relationships between the contractual parties of the collective agreement, therefore, in this regard, the provisions only have an effect emanating from the agreement. They establish no direct rights and obligations for the subjects of the collective agreement. The law emanating from the agreement governs obligations and impact obligations on the employment relationship.

The individual judicial remedy for employees, by the way, is also warranted by the Chamber of Commerce and Industry (employees lobbying group) in their jurisdiction, which must offer consulting for employees regarding work and social-legal problems and possibly offer legal protection by representation in court.

16., 17. and 18. Under what kind of conditions may an Alien work in Austria? Do immigration checks exist and is a work permit required? Which prerequisites must be met in order to obtain a work permit?

The same legal provisions apply for nationals as well as for alien workers in Austria. The most important special regulations for aliens are contained in the Alien Employment Law [AuslBG].

An employer may employ an alien, if

the employment relationship is not subject to the AuslBG – or, if the AuslBG must be applied,

· a permit had been issued to the employer authorizing the employment, or a permit as key personnel or an authorization to transfer or an advertisement confirmation, or

· the employee obtained a work permit, a work release or residential permit.

Aliens who only have a 3-month tourist visa may not work in Austria.

The prerequisites for obtaining a work permit are listed in Section 4 of the AuslBG Especially, a residential permit is required and neither the employer nor the employee must have repeatedly violated the AuslBG. Additionally, the authorities must adhere to quotas and maximum numbers for the individual Federal States. Usually, a work permit is valid for 1 year. Once the permit is issued, the employee must start on the job within 6 weeks, otherwise the work permit will expire.

Aliens who have a residential permit may work in the entire Federal territory. The validity of the residential permit depends on passport regulations.

A residential permit is to be issued to an alien who has applied for it, if he/she

a) has either met the integration requirements or if there are no integration requirements to be met

b) has been a permanent resident in the Federal territory for 5 years and has a regular income from legal employment

c) is the spouse or minor child of a previously mentioned alien, lives with him/her in the same household and has been residing in the Federal territory for 5 years

d) has been living in Austria for the last 5 years and was obligated to attend school, or is

e) the spouse or child under 21 years of age (or older if he/she is a dependant) of an EEA-citizen [citizen of the European Economic Area] or of an Austrian and has had his/her main residence in Austria for the last 2 years.

As of 1/1/2003, there is a new permit procedure for new permits for key personnel.

An application for a work permit as key personnel must be prepared by the alien. But it is the employer who must file the application with the governor of the state in which the alien intends to reside. The application must contain a well-founded justification by the employer. In the application the employer must prove the presence of the necessary criteria for the existence of the prerequisites of key personnel.

Criteria for Key Personnel:

An alien is considered a key personnel, if he/she

· has a type of education/training which is especially desired on the domestic labor market, or

· has special knowledge and skills with corresponding professional experience, and

· receives a monthly gross remuneration of EUR 2,070.00 (computed for the year 2004, otherwise, 60% of the maximum premium basis according to the General Social Security Law, [ASVG], plus supplementary payments).

Additionally, at least one of the following prerequisites must exist:

1. Interests in the respective region, not limited to a particular enterprise, or

2. Establishment of new positions or securing existing positions, or

3. Effect on the current management of the enterprise, or

4. Transfer of investment capital to Austria (minimum of EURO 100,000.00), or

5. University or technical college education or other professional, well-recognized training.

19. What does an employer have to consider, if an alien applies for a job at his company?

He may only hire him if the alien has a relevant work permit; otherwise he violates the AuslBG and must count on a serious administrative fine. .

20. Which consequences does employment abroad have for the domestic citizen as far as taxes are concerned?

The usual residence of a person is a location where the individual generally stays and which leads one to believe that the individual does not just stay there temporarily. If the actual stay is longer than 5 months, then, in any case, an unlimited obligation to pay taxes arises. Therefore, a possible limited obligation to pay taxes may only arise if someone has neither a domestic residence nor usually stays there. Under certain circumstances, though, even in Austria, the obligation to pay taxes may arise.

If a person only has limited tax obligations in Austria, then Austria only demands income tax or corporate taxes for certain kinds of income. The taxation takes place because there is an apparent certain proximity relationship or a certain link of the income in Austria. Likewise, a limited tax liability may arise for an Austrian working abroad, if, according to the prevailing intra-state provisions, he is not incurring an unlimited tax liability, but achieves income which is in connection with the particular country. To prevent a situation in which an individual would incur tax liabilities in two countries, there are numerous double taxation treaties.

Often the double taxation treaties provide that the exemption occurs with a so-called “progression”. This means that the particular country which exempts certain circumstances of a case (and, therefore, may also not levy taxes on these issues) [closing parenthesis apparently misplaced] and levies, therefore, a certain tax rate for the assessment of the taxes on the non-exempt income, as part of the total income.

Alien employees, if they have worked in Austria for more than 6 months and have a regular residence here, are, therefore, subject to the wage and income tax structure under Austrian Law. An exception is made if the certain situation is covered by an existing double taxation treaty.

21., 22. and 23. Are employees protected in case of a transition of ownership of a company? What rights arise from the situation for the employee? Which obligations arise at the time of the sale of the company, or in case of a transition to a successor, respectively?

By the Employment Contract Law–Adaptation Act (AVRAG), it is basically legally secured that, in case of a transition of ownership of a company, the working conditions are transferred over to the new owner of the company with all rights and obligations. This also includes training relationships and working relationships of managing employees. It takes effect based on the law and is not subject to the former owner having stopped his activities or not.

The transition of ownership of a company takes place based on the following criteria:

· The structure being transferred must constitute an economic unit which must be preserved during the change of ownership

· In its premises the former business activities or similar activities must actually continue or must be taken up again

· The possible takeover of the essential part of the personnel, according to number and

expert knowledge by the new owner, including a possible transfer of clientele.

The new company owner enters into the existing work agreements. The prior work periods of the respective employees are, therefore, to be fully credited for all benefits. If the new owner is subject to a different collective agreement, and if the company in transition is incorporated into the company of the buyer, then the collective agreement of the buyer applies.

According to European Union guidelines, a Buyer as well as a Seller is prohibited from simply terminating employees because of the transition. Terminations for economic, technical or organizational reasons, which cause modifications in the area of employment, are, however, permitted. If the termination of an employee would still have taken place if one ignores the transition, then it is, in any case, legally effective. Whether or not such a legally effective termination is contrary to social convention, however, must be examined separately by way of a judicial appeal of the termination. If the employee is of the opinion, however, that the termination is ineffective because of the transition of ownership, then he may file a declaratory action with the Labor and Social Court.

On principle, though, it is permissible that the former business owner and an employee reach an agreement that the employment relationship shall not continue with the new ownership; it is up to the employee to waive the protection for being terminated prior to the end of the employment relationship and therefore, come to an agreement with the Seller of the business that the employment relationship shall not continue with the Buyer.

AVRAG provides an employee with the rights to appeal against the entry of a new contractual partner in the employment agreement. An employee may, however, only make use of the right to appeal given certain prerequisites. This is the case in the event that the new owner of the company does not adopt the contractual status quo under the collective agreement or the pension agreement in force.

If an employer without a business location in Austria who is not a member of a corporate enterprise under a collective agreement in Austria employs an employee with usual work location in Austria, then this employer must pay the employee at least such remuneration as covered by law or by a collective agreement and as would be payable to a similar employee by a similar employer at that business location.

24. Which provisions are in force in Austria for sales representatives and under which legal prerequisites can this occupation be practiced in Austria?

The occupation of an independent sales representative may be practiced subject to a valid occupational license. Since the Trade Order Reform of 2002 [providing easier access to several professions] the sales representative trade has become an independent trade.

A sales representative is an individual who is charged by companies which he represents to constantly place or conduct sales orders of goods in their names and to their accounts and who carries out this trade independently and as a profession.

The sales representative is entitled to a commission for all business which arose from his business activities. A prerequisite for this entitlement is that the sales agent made efforts for the closing of this business. If there is any doubt, a commission is also due for business executed without the direct collaboration of the sales representative during the duration of his contract or for business from clientele introduced to and executed by the enterprise.

If the sales representative is expressly responsible for a certain region or is a sole representative for a certain clientele, then, if in doubt, commission is due him for such business which has been executed by the entrepreneur or for the latter with the clientele belonging to the area of the sales representative, even if such business was executed without his collaboration during the duration of his employment relationship.

Commission is due for transactions which are not finalized until after the expiry of the sales representative agreement, if the business transaction is primarily attributed to the endeavors of the sales representative and was executed in reasonable proximity to the expiry of the agreement, or, if the business transaction is due to a binding declaration by a third party that he/she wishes to execute the business transaction and the business order was received by the sales representative or by the entrepreneur prior to the expiry of the employment agreement.

The entitlement to commission starts with the legal effectiveness of the negotiated business transaction, if and insofar as the entrepreneur and a third party have executed the business transaction or if, based on the agreement, the entrepreneur should have executed the business transaction. The entitlement for full commission starts with payment of the entire amount due. If payment by the third party is delayed, the entrepreneur must undertake all reasonable steps to get the third party to make the payment. Unless otherwise agreed on, the decisive rates for the amount of his commission are such as are customarily paid for this type of trade at the location of the sales representative. Discounts which have been allowed by the entrepreneur to a third party must not be considered, unless at the closing of the business transaction a different agreement was made, or conventionally, there is a different commercial practice in this particular trade. Commission claims are to be settled at the latest on the last day of the month following the Quarter in which the commission entitlement arose.

Following expiry of the agreement, the sales representative is entitled to a reasonable settlement, if he has attained new clients for the company or has essentially expanded the existing business relationships, and considerable advantages are still to be expected from it, or is entitled to a fair settlement payment under consideration of all circumstances, especially of incoming commissions. The claim for a commission settlement is understood as a compensation for the loss of future commissions. In case of doubt, the commission is limited to a maximum of an annual commission amount, which is computed from the average of commissions earned in 5 years, or in the lesser duration of the contractual relationship.

The claim expires if the sales representative does not inform the entrepreneur within one year of termination of the contract that he is enforcing the claim. Additionally, the settlement claim is null and void if the entrepreneur suffers damages because of the sales representative at a later date.

In each Federal State, there is a specialized division within the responsible Chamber of Commerce and Industry which is organized according to branches of industrial. Independent trades may be registered with the trade authorities without proof of special training.

The general prerequisites of an independent trade must, however, be met. They are:

1. Being of age, i.e. having completed the 18^th year of age.

2. Austrian citizen or citizen of the European Economic Area/European Union [EEA/EU]

3. Lack of grounds for personal exclusion (for example, conviction because of financial crimes, sentencing, rejection of a commercial failure because of lack of assets)

4. suitable business location

With corporations the lack of grounds for personal exclusion also applies to those individuals who have a decisive influence on the business management (for example business manager under commercial law or majority shareholder).

Aliens may work in a trade like nationals do if this is determined in treaties or if the alien has a residence permit which authorizes the individual to be gainfully employed. EEA/EU-citizens have equal status with Austrian citizens.

Citizens of countries with which no such treaty was executed, individuals who have been granted asylum, or stateless individuals may work in a trade like nationals do, if they already have been issued permits for staying in Austria for working in a gainful employment.

For third country citizens who are not legal resident aliens yet (First-time applicants) who want to be gainfully employed in a trade in Austria, a residential permit which allows being independently gainfully employed is necessary in order to be legally working in a trade.

The trade license necessary for working in the trade is issued - on the basis of an application - by the trade authorities responsible for the (future) location of the trade business. After each issuance of a trade license, the trade authorities automatically inform the responsible tax authorities as well as the social security office of the trade and the Chamber of Commerce – Economics Division.