OGH: ‘All-in’ Contracts and Part-Time Parental Leave

Nov 11, 2022 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, OGH) has clarified how to deal with ‘all-in’¹ contracts during parental part-time work.

In the original case, the plaintiff had been employed by the defendant as a ‘senior director’ according to the collective agreement for salaried retail employees. The contract provided for a fixed annual salary of EUR 200,000 before taxes on the basis of 38.5 hours of work per week. The annex to the employment contract stated that 25 hours of overtime per month were included in this amount. After his first parental leave, the plaintiff was transferred to a poorer position. The new position included 15 hours of overtime per month included in the fixed annual salary. This agreement was based on the mutual assumption of the contracting parties that the plaintiff would actually (be allowed to) work these extra or overtime hours.

During his second parental part-time leave, the plaintiff decreased his working hours to 30 hours per week, whereby his fixed annual salary was reduced to approximately EUR 144,000 before taxes. During this part-time parental leave, the plaintiff was exempted from the obligation to work overtime and extra hours under Section 19d (8) of the Working Hours Act (Arbeitszeitgesetz, AZG). The employer also did not demand any overtime or extra hours during this period.

The plaintiff claimed the difference in remuneration resulting from a reduction of the lump sum for overtime and extra hours. A reduction of this lump sum was inadmissible because he was drawing an all-in salary.

The Austrian Supreme Court issued the following ruling on this matter:

During parental part-time work, only that part of the salary which is paid in addition to the basic salary for the performance of overtime and extra hours is suspended. Since the contract states the number of hours to which the overtime allowance refers, a reduction by this amount is permissible. If overtime or extra hours are actually worked during parental part-time leave, a corresponding compensation is due by way of individual settlement. The employer's inability to unilaterally terminate the overtime allowance does not change this fact.

OGH 9 ObA 83/22d (28 September 2022)

¹ In Austria, under so-called ‘all-in’ employment contracts, the agreed salary is intended to cover employees for any overtime worked, with the all-in clause stating a total payment (in excess of the collective bargaining agreement).