OGH: Continuation of Pay after Termination

Sept 13, 2024 Benn-Ibler Rechtsanwälte

According to the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH), if an employee is ill when they leave the company, the employee retains their full entitlement to the unused portion of the continued salary paid in the current year.

In the case at hand, the plaintiff had been employed by the defendant until 28 February 2023. The termination of the employment contract was by mutual consent. However, it took place during the plaintiff’s sick leave, which lasted beyond the 28 February 2023 and until 14 May 2023. However, the defendant paid the plaintiff’s salary only until 5 March 2023. The plaintiff therefore sought continued payment of his salary beyond 5 March 2023 until the statutory maximum for the working year (that began for him on 6 March 2022) had been exhausted. This request was granted by the lower courts.

The OGH upheld these decisions:

The Austrian Continued Remuneration Act (Entgeltfortzahlungsgesetz) provides for a quota system for entitlement to continued remuneration. This means that the entitlement to continued remuneration is always based on one year of work.

However, this does not mean that the employee is entitled to continued remuneration only until a notional end (in this case the amicable termination of the employment relationship), of his last year of service.

Rather, the law ensures that the unused part of the entitlement to continued payment of wages for the current year of work is used even after the end of the employment relationship.

This means that an employee who is ill at the time of termination of the employment relationship retains their full right to use the unused quota of continued remuneration from the current year of employment.

OGH 9 ObA 54/24t (23 July 2024)