TOIL Agreements: Austrian OGH Limits Employees Rights to Withdraw

Jun 6, 2025 NK

A works council brought an action against a hospital with the aim of establishing that employees may withdraw from the time-off-in-lieu (TOIL) agreement in the event of illness. The employer argued that time off in lieu merely represents a redistribution of working hours and does not have the additional character of free time such as recuperation. The Austrian Supreme Court had to clarify whether illness justifies a right to withdraw from the time compensation agreement.

Works council sues for employees' right to Withdraw in the event of illness during TOIL agreement

In the case at hand, a works council representative had sued her employer, a hospital, for confirmation of her right to withdraw from the time-off-in-lieu (TOIL) agreement due to illness.

Employees receive time-off-in lieu for overtime worked, which they can subsequently use as they see fit. In the case at hand, the works’ council representatives sought a declaration that employees are entitled to withdraw from a TOIL agreement concluded with the respondent in the event of illness. This should particularly apply in cases where employees have a special workload which then requires more rest and recuperation.

The defendant took the view that TOIL agreements ultimately only lead to a different distribution of working time. The time off in lieu does not constitute additional remuneration when credited against normal working time.

OGH: TOIL primarily serves to distribute working hours, not for recuperation

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) is of the legal opinion that an employee cannot withdraw from a TOIL agreement concluded between the parties to the employment contract due to illness, if the TOIL also serves to compensate for a heavy workload. However, the opposing legal opinion in pertinent legal literature essentially argues that the purpose of a TOIL agreement is to allow employees to rest. However, the OGH has previously ruled that rest is less important in the case of TOIL than in the case of holiday. The primary purpose of TOIL is not to allow employees to rest, but to ensure that the average working time is as close as possible to normal working time. It would also be contradictory to deny an interruption from TOIL that has already been arranged, due to illness, yet allow the employee to withdraw from a TOIL agreement for specifically that reason.

OGH 9 ObA 17/25b (29.04.2025)