1E9Ct5D

ivLegal Consequences for Employer and Employee on TerminationaRights of Employee on Termination by EmployerTermination on NoticeWhen the employee’s contract has been terminated by the employer, he or she hascertain minimum entitlements:(i)(ii)(iii)(iv)(v)A certain amount of free time each week to seek new employment. This time isoften fixed by collective agreements and in any event the Salaried Employees Actstates that an employee is allowed at least eight hours per week to seek newemployment, unless the employee is the party who terminated the contract.Wages to the end of the applicable notice period. If the employer does notcomply with the notice period, the employee is in any event entitled to thosewages.Pro-rata vacation leave not yet taken. This is calculated on the basis of thevacation allowance for a year which has not been used and the point in timeduring that year at which employment ends. Proportional share of the Christmasremuneration holiday payment and other remunerations due under Austrian law,including any variable compensation.Severance payment scheme. In general, severance payments have beenabolished for all employees who commenced their current employment on or after1 January 2003.Employees who began work before that date and whose employment contract isterminated either by the employer giving notice, by mutual agreement betweenthe parties or by the employee for a valid reason and who have worked with thesame employer for at least three years are still entitled to a statutory severancepayment (‘Abfertigung’). The amount will depend on the period the employee hasworked and is calculated as follows:Employment Severance payafter 3 years 2 monthly remuneration paymentsafter 5 years 3 monthly remuneration paymentsafter 10 years 4 monthly remuneration paymentsafter 15 years 6 monthly remuneration paymentsafter 20 years 9 monthly remuneration paymentsafter more than 25 years 12 monthly remuneration paymentsThe ‘monthly remuneration payment’ is the average amount an employeereceived per month, including pro-rata 13th and 14th salaries, bonus payments,payments for regular overtime, commissions etc.In case of dismissal by the employer for a valid reason or in case of ordinarytermination by the employee no severance payment is due.An employee is also entitled to severance payment if the employment isterminated by his retirement. The family of a deceased employee is entitled tohalf of the severance pay the employee would have been entitled to at the time ofhis death if the employment had been terminated. Similarly, pregnant women areentitled to terminate their employment and nonetheless receive half of theirseverance pay.Employee Benefit Funds. In order to promote the mobility of employees and toallocate available human resources more efficiently, the system of severancepayments has been abolished for all employees who started work on or after 1January 2003 and has been replaced by a different system set out in theEmployee Benefit Act (“Mitarbeitervorsorgegesetz”) as follows:- 54 -