Arbeitszeitrecht: Ausnahmen für leitende Angestellte (working time exemptions for senior executives)
Senior executives in Austria are exempt from the Working Time Act – but on what conditions, and what does that mean for overtime? Engelbrecht, Vienna.
Definition
Senior executives and certain other employees with significant independent decision-making authority may be exempt from the scope of the AZG and ARG. The condition is that they have been given significant independent decision-making powers and that their working time, on account of the particular characteristics of their activity, is not measured or predetermined, or can be determined by themselves as to its timing and duration.
A management position, a job title or a mere agreement on trust-based working time is not sufficient. What is decisive is the activity actually carried out, the decision-making powers and genuine autonomy over working time. Where the requirements are met, the working time and rest provisions of the AZG and ARG generally do not apply. Contractual and collectively agreed provisions and general duties of care remain in place.
Scope of application
The AZG exemption is particularly relevant in the following situations:
- drafting employment contracts for executives with all-in agreements;
- assessing overtime claims where classification is doubtful;
- employment disputes about the legal classification of a management position;
- assessing the obligation to keep working time records;
- designing flexible working time models for executives.
Legal basis
The exemption for senior executives is based on the following legal sources:
- § 1 para 2 no 8 AZG;
- § 1 para 2 no 5 ARG;
- case law of the Supreme Court (OGH) on the delimitation of senior executives and the significance of the function actually performed;
- Art 17 para 1 of the Working Time Directive 2003/88/EC.
Deadlines
There is no particular application or declaration period for classification as a senior executive. The legal classification follows directly from the activity actually carried out.
Where classification is incorrect, the following time-related aspects are relevant in particular:
- pay claims are generally time-barred within three years of falling due;
- collectively agreed or contractual forfeiture periods may require assertion considerably earlier;
- in the case of incorrect classification, breaches of the AZG and ARG may also have administrative penalty consequences.
Rights and obligations
Rights:
Senior executives have the following rights:
- largely independent organisation of their working time, to the extent that this corresponds to their actual function and their contractual arrangements;
- entitlement to remuneration for additional work, to the extent that this is provided for in the employment contract or collective agreement and is not already validly covered by an all-in agreement;
- frequently higher remuneration to compensate for the particular demands on their time.
Obligations:
Senior executives carry the following particular obligations:
- performing the delegated management and decision-making tasks independently and diligently;
- observing the contractual duties of loyalty, confidentiality and care;
- complying with the obligations under the Employee Protection Act, in particular with operational safety instructions and briefings.
Common mistakes
The following mistakes occur frequently when classifying senior executives:
- classification based on job title rather than an assessment of the actual function;
- incorrect classification without genuine management responsibility – this can trigger retroactive overtime claims;
- base salary not shown separately in the contract, which may breach the transparency requirement under the AVRAG;
- the AZG exemption is applied to positions that have no genuine decision-making autonomy in personnel and commercial matters.
Recommended steps
The following measures help avoid liability risks in classification:
- establish and document the actual tasks and decision-making powers in concrete terms;
- set out decision-making authority in personnel and commercial matters in writing;
- show the base salary separately in the contract;
- obtain a legal review before concluding the contract where classification is uncertain.
Frequently asked questions
Who qualifies as a senior executive for the purposes of the AZG?
The provision covers senior executives and other employees who have been given significant independent decision-making powers and whose total working time, on account of the particular characteristics of their activity, is not measured or predetermined, or can be determined by themselves as to its timing and duration. What is decisive is the actual function, the concrete decision-making powers and genuine autonomy over working time.
Does the exemption apply automatically to all managers?
No. Titles such as “Manager”, “Senior Manager”, “Head of” or “Director” are not sufficient. The exemption applies only where both significant independent decision-making authority and the required comprehensive autonomy over working time genuinely exist.
Can senior executives claim overtime pay?
Where the exemption applies, there is no statutory entitlement to overtime pay under § 10 AZG. An entitlement may nevertheless arise from the employment contract or the applicable collective agreement. An all-in agreement does not automatically eliminate additional pay claims either. It covers additional work only within the scope validly agreed and arithmetically covered.
What happens if someone is incorrectly classified as a senior executive?
If the requirements for the exemption are not met, the AZG and ARG apply from the outset. Within the relevant limitation and forfeiture periods this can give rise in particular to retroactive pay and overtime claims. Administrative penalties may also follow for breaches of working time limits, rest periods, breaks or record-keeping duties. A mere breach of rest period rules does not, however, automatically create a separate monetary claim. Damages claims require actual loss to have occurred and the further statutory requirements to be met.
Do no occupational safety rules at all apply to senior executives?
No. Where the statutory exemption applies, only the relevant provisions of the AZG and ARG are disapplied. The employer's general duty of care, the Employee Protection Act and applicable collective and contractual protective provisions generally remain in place.
Any questions?
Unsure whether a manager is correctly classified as a senior executive? We review your contracts and help you avoid liability risks.
