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#TodayInDispute

#TodayInDispute provides you with the latest updates in the field of dispute resolution and can also be received via LinkedIn and Twitter.

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04.12.2019 #TodayInDispute: As of 1 January 2020, Austrian employees, employed in businesses with more than five employees, are entitled to nursing leave or nursing part-time of up to two weeks, in case the general requirements for such a leave or part-time are fulfilled (e.g. service period of at least three months, close relative to be taken care, minimum care level 3 (care level 1 with regard to minors or relatives with dementia), etc). Such a leave or part-time can be taken unilaterally by the employee without the consent of the employer. Moreover, the nursing leave or nursing part-time can be extended for another two weeks period, if the employer and the employee do not agree on a further nursing leave or nursing part-time. Employees, who want to make use of this entitlement have to notify the employer about the intended commencement date as soon as they know it. The employee has to prove the need for care and has to substantiate the status as close relative of the person in need within one week upon the employer’s request. The new law can be found here (in German).

29.11.2019 #TodayInDispute: The ECJ recently declared (our respective #TodayInDispute can be found here: https://lnkd.in/eZ-AAtZ) that the sanctions provided by the Austrian Anti Wage and Social Dumping Act (Lohn- und Sozialdumping-Bekämpfungsgesetz // LSD-BG) for not obtaining administrative approvals and not keeping wage documents available in Austria, infringe the EU freedom of services. In reaction to this ECJ judgment, the Austrian Supreme Administrative Court now ruled that for such infringements only one administrative fine up to the maximum amount provided by law can be imposed without taking into account any minimum amount. This also applies if several employees are involved. Therefrom results that administrative fines must not be imposed cumulatively for each employee anymore in these cases. Furthermore, the imposition of a compensatory imprisonment is also not permitted anymore in case of such infringements. However, the Supreme Administrative Court stated that imposing a procedural contribution of additional 20% of the fine does not violate European Union law and is therefore still permissible. The ruling can be found here (in German).

14.10.2019 #TodayInDispute: In a recent Austrian Supreme Court case, the claimant had concluded an accident insurance policy with the respondent. The insurance contract included an " Immediate Accident Benefit - Clause" which stated that after an accident-related hospital stay of at least 5 days, 3% of the insured amount will be paid as an advance on any disability benefits. If no permanent disability results from the accident, the amount does not have to be repaid. The Claimant had an accident with a string trimmer, suffered from a consequential sepsis and spent 5 days in the hospital. Irrespective of the accident, the claimant also suffered from diabetes, which had a deteriorating effect on the sepsis. Based on the insurance contract, the claimant requested payment of 3% of the insured amount, to which the respondent objected. The Supreme Court held that based on the wording and purpose of the contract, entitlement to benefits only required a hospital stay of at least five days. The policyholder is also entitled to the benefit if he does not suffer permanent invalidity resulting from the accident. Further, the payable amount is not reduced if the treated disease is partly a result of a pre-existing ailment. Read the decision here.

20.09.2019 #TodayInDispute: ECJ declares certain provisions of LSD-BG unlawful. The sanctions provided by Austrian anti wage and social dumping law (Lohn- und Sozialdumping-Bekämpfungsgesetz // LSD-BG) for not obtaining administrative approvals and keeping wage documents available in Austria infringe the EU freedom of services according to a recent ECJ judgement. In the case on hand the fines imposed on the managing directors of the Croatian and Austrian companies involved amounted to several million Euros or compensatory imprisonments of several years. The ECJ stated that administrative fines, which (1) provide for a minimum amount, (2) could be imposed cumulatively for each posted or hired out worker, (3) provide for a compensatory imprisonment and (4) provide for a cost risk in case of an appeal of additional 20% of the fine, violate European Union law. The judgment (in German) can be found here.

16.09.2019 #TodayInDispute: Pursuant to Art 5(5) of the Lugano Convention, a person domiciled in a Convention State may (inter alia) be sued in another Convention State if a dispute arises out of the operations of a branch of a company, in the courts for the place in which the branch is situated. The decisive factor differentiating a branch from an independent subsidiary is that a branch is under the direct control of its parent company, whereas a subsidiary acts independently from parent company’s directives. In a case recently decided by the Austrian Supreme Court, a company incorporated in Switzerland which had a subsidiary in Austria, was sued before an Austrian court. The Supreme Court held that while the Respondent’s Austrian subsidiary was – formally – indeed not a branch but a subsidiary, it still did not act for itself, but mainly for the parent company and was supervised and managed by the parent company. In its business relations with the Claimant, the Respondent had presented itself in a way that its subsidiary was under its full control (underlined by the Respondent’s GTCs). The Court therefore held that there were sufficient connecting factors to conduct the proceedings against the Swiss Respondent before the Austrian Court competent for the subsidiary. More (in German) here.

02.09.2019 #TodayInDispute: A termination of the employment for cause has to be issued without any delay as soon as the facts have been sufficiently clarified by the employer. This also applies in case the employee was put on garden leave. Thus, a termination of an employment for cause is null and void if facts are clarified three months after the employee was put on garden leave and the employment is only terminated nine months later. Even in such a situation the employer is obliged to terminate the employment immediately. Due to a belated termination the employee may not only be entitled to a compensation payment but also challenge the termination for example for being socially unfair. In the latter case, the misbehavior of the employee may not be taken into account by a court if the termination was not issued immediately. Thus, a belated termination may even lead to a reinstatement of the employee. The ruling (in German) can be found here.

07.08.2019 #TodayInDispute: “Unfair Competition: Summer Edition” The Austrian Supreme Court recently was confronted with an “ice-cream case”: The claimant sells and advertises a well-known oval ice-cream bar coated with two layers of chocolate and fillings in different flavors (“Magnum Double”). The (first) Respondent sells and markets ice-cream under the name “Gelatelli Double” which matches the Claimant’s product in structure and in offered flavors. The Claimant inter alia filed a cease-and-desist claim arguing that Respondent’s product is an Imitation and violates Austrian competition law due to deception of origin and by freeriding on Magnum’s popularity. However, the Supreme Court sided with the Respondent. It noted that in order to promote free competition, market participants are free to offer imitating products. Offering an imitation may, however, be unfair if the competitor fulfills certain additional criteria amounting to unfair conduct. This was not the case here: Magnum’s oval shape and multi-layered structure was not a characteristic feature that serves as an indication of the product’s origin to a specific company. The same applies to the term “Double”, which merely describes the structure of the ice-cream and is only secondary to the brand “Magnum”. Read more (in German) here.

30.07.2019 #TodayInDispute: Will there be a change in the ECJ case law on transfers of undertakings? The ECJ has currently to decide whether the transfer of a public bus service qualifies as transfer of undertaking and thus, triggers the TUPE provisions, if there is no significant transfer of tangible assets like buses but the majority of the personnel employed by the former operator were engaged by the new operator. In its previous case law, the ECJ ruled that bus transport is an asset-intensive business. Accordingly, the transfer of tangibles was considered to be decisive for the qualification of a transfer of undertaking. However, this case law could now be softened. According to the Advocate General, the question whether there is a transfer of undertaking or not – even in cases of asset-intensive businesses – cannot be reduced to determining whether the tangible assets are transferred from the old to the new operator but rather all facts and circumstances relating to the transaction have to be assessed. If the ECJ follows the Advocate General, this may have an impact on the future assessment of whether or not a transfer of undertaking is given. The Opinion of the Advocate General (in German) can be found here.

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