In recent years, an increase in the number of One-Person Businesses (OPB) has been recorded in Austria according to some sources. For example, the so-called WKO OPB Fact Sheets for 2007 show an OPB membership of 183,297 entrepreneurs, whereas the figure for 2013 is 251,176.
The employment of staff on the basis of independent (self) employment was regarded as the practice of circumventing the employment permit required for dependent employment with regard to the transitional provisions for the EU-8 countries. There was an assumption that, in the course of liberalisation on 01 May 2011, it would lead to a reduction in fictitious self-employment if the affected citizens could register as dependent employees without a permit. In fact, at the overall employment level, there was a reduction in the independent (self) employment of EU-8 citizens in favour of dependent employment in the first months after the labour market liberalisation.
At the same time, research carried out in 2011 and 2012, and expert interviews commissioned by the Vienna Chamber of Labour and the BMASK, showed that many of the experts assumed that the employment of ‘self-employed persons’ to circumvent provisions laid down by law or by collective agreements, especially in the construction sector, would still remain an attractive alternative.
These construction activities are often simple activities, which would actually need to be fulfilled in the context of real service contracts, but which have been frequently outsourced to individual entrepreneurs in the context of work contracts in recent years.
In its decisions, the Austrian Higher Administrative Court repeatedly held that such simple manual activities do not normally constitute independent work. The holding of such trade licences such as "the filling of pre-installed gypsum plasterboards with the exclusion of any activity reserved for a regulated profession" forms part of a widespread exploitation of the Industrial Code to conceal dependent employment (see www.vwgh.gv.at, e.g. press release 2012 - no. 2010/08/0129-6). In general, the specific and precise overall picture of the activity is used for the assessment of (in)dependent employment, i.e. true economic content is crucial. The following features are typical features of economic dependence according to the Higher Administrative Court (cf. Higher Administrative Court (VwGH), decision of 22 February 2006, no. 2005/09/0012):
The issue of quasi-subordinate employment or fictitious self-employment in the construction industry is regularly covered by the Construction Workers' Annual Leave and Severance Pay Fund (BUAK) in the context of their construction site inspections. The inspection bodies of the Construction Workers' Annual Leave and Severance Pay Fund (BUAK) have relatively comprehensive entry, information and inspection rights as well as the right to establish the identity of the employees on the basis of the Construction Workers' Holiday and Severance Pay Act (BUAG). Employers are obliged to provide the necessary information to the employees of the Construction Workers' Annual Leave and Severance Pay Fund (BUAK) and to allow the inspection of necessary documents, which refer to employment contracts, the nature of the employment and wage records.
In the context of this project, the Construction Workers' Annual Leave and Severance Pay Fund (BUAK) gave the project team a sample of the data entry forms “concerning the work contract – quasi-subordinate employment distinction” used during construction site inspections, for the first systematic evaluation. These data entry forms represent templates for the juridical processing of cases of the Construction Workers' Annual Leave and Severance Pay Fund (BUAK), thus the income in respect of content has not been systematically recorded or evaluated in any way by the Construction Workers' Annual Leave and Severance Pay Fund (BUAK).
Reliable data on employment careers of self-employed persons, who are active in the construction sector, is rare. Not least for this reason, the closer investigation of the often reported dynamic increase in the formation of OPBs in the construction industry, or the processes of wage dumping with regard to self-employed persons in this economic sector, by analysing administrative data is almost impossible.
In the context of a second priority issue, a specific and pointed approach to the aforementioned problem was attempted, despite these restrictions, using the raw data from the Main Association of Austrian Social Security Institutions. In this respect, the approach was not easy, as economic activity for self-employed persons is not recorded by the Main Association. This practice is in stark contrast to the treatment of employer companies: If a company employs staff, they are given an employer account listing and they are subsequently allocated to an economic sector by an ÖNACE - business listing.
Team: Andreas Riesenfelder, Petra Wetzel
Client: Chamber of Labour Vienna