Dismissal rules in Austria: notice, protection and severance in 2026

Austrian law gives an employer two ways to end an open-ended contract. The usual one is termination with notice (Kündigung): the employment carries on, fully paid, until the notice period has run. The other is summary dismissal (Entlassung), which ends the relationship at once and is kept for serious misconduct. Summary dismissal is the route most likely to end up in front of a labour court, so it should never be used without Austrian legal advice on the specific facts.

Most of the protection in the Austrian system sits around the act of giving notice rather than in a long list of preconditions. Where a works council exists it has to be told in advance, and once notice is given the employee has a short window to challenge it in court on defined grounds. Long-serving staff get longer notice, and certain groups cannot be dismissed at all without a court’s consent.

Resignation is simpler. Unless the contract says otherwise, an employee leaves with one month’s notice, ending on the last day of a calendar month. The parties can agree a longer period, up to six months, but only if the employer’s own notice is at least as long. Resigning also matters for severance, which is covered further down: it does not unlock a cash payout from the severance fund.

Employer notice is laid down in § 20 of the white-collar employees act (Angestelltengesetz, AngG), and since 1 October 2021 the same scale has applied to blue-collar workers. The length depends on completed years of service.

The scale starts at six weeks for anyone with up to two years behind them. It steps up to two months once year three begins, to three months at the start of year six, to four at year sixteen and to five at year twenty-six. After that it stays at five months, however long the employee has been with you.

These periods are floors. An employment contract or the applicable collective agreement may grant the employee more, and nothing can agree them downwards. The employment, and the salary, continue in full until the period ends.

Service is counted from the original start date, which is easy to misjudge. Someone who joined in spring 2024 and receives notice in autumn 2026 is already in their third year of service and is owed two months, not six weeks. Take the date from the payroll record, not from memory or an organisation chart.

The ÖGK publishes the scale on its employer pages, and the federal legal information system (RIS) holds the consolidated text of the acts if you need to check a provision yourself.

Notice in Austria must expire on a permitted date, and the default is the last day of a calendar quarter: the closing day of March, June, September or December. The contract may instead let notice end mid-month on the 15th or at any month-end, and most Austrian employment contracts include that clause because the default can stretch a short notice period considerably.

Here is the effect in numbers. An employee with eighteen months’ service is given six weeks’ notice on 1 October. Six weeks reaches mid-November. If the contract allows only quarter-end dates, the employment still runs to 31 December, two and a half months after notice was given. If the contract allows the 15th and month-end, the same notice can end on 15 November.

Because the end date drives final pay, special-payment shares, leave balances and the de-registration through ELDA, it should be worked out and written down before notice is handed over, and delivery should be provable, for example handed over in person against a signature.

When we prepare Austrian contracts, the 15th and month-end clause is among the first terms we look for. The other clauses that shape an exit are covered in our article on the employment contract in Austria.

Two kinds of contract sit outside the notice scale. During probation (Probezeit), which in Austria lasts one month at most, either side may end the employment at any moment, without notice and without giving a reason. A collective agreement may shorten that month but cannot extend it, so a three- or six-month probation clause imported from another country will not work for a standard hire.

Fixed-term employment simply stops when the agreed term runs out. The first fixed term needs no justification, but repeated renewals, known as chain contracts (Kettendienstverträge), must be justified objectively, for instance by the need to cover a colleague who is on parental leave. The Supreme Court has held that uncertain business volume is not enough. A chain without a valid reason is treated as one open-ended contract, which brings the full notice scale and dismissal protection with it.

For planning purposes, treat the end of the first month as a hard line. A decision taken on day 25 can end the employment that week. The same decision taken on day 35 brings in at least six weeks’ notice and, without a 15th or month-end clause, a quarter-end date on top. Managers abroad should know when probation ends for each new hire and review the fit before it does.

If the business has a works council (Betriebsrat), § 105 of the Labour Constitution Act (ArbVG) requires the employer to inform it before every dismissal. The council then has one week to respond. A dismissal given before that week has passed is void, so the order of steps has to be kept even when the outcome is not in doubt.

Once notice has been received, the employee has two weeks (14 days) to challenge it in the labour court. Two grounds are available:

• a forbidden motive, where the dismissal was given for a reason the law does not allow an employer to act on;
• social unfairness (Sozialwidrigkeit), available after six months’ service, where the dismissal significantly harms the employee’s interests and the employer cannot justify it by reasons relating to the person or to the needs of the business.

Notice in Austria does not have to state a reason. Even so, an employer who may later need to justify a dismissal on personal or business grounds is in a far stronger position with a written record made at the time. Keep notes of performance discussions, restructuring decisions and the alternatives considered.

Some employees enjoy special protection, and for them a dismissal needs prior court consent or is barred during a protected period. They include pregnant employees, parents on parental leave (Karenz) or taking the Papamonat (fathers’ month), protected until four weeks after the leave ends, people sitting on the works council, and employees whose disability gives them formally protected status. If a reorganisation touches any of them, build the timetable around their protection.

Contracts starting from 1 January 2003 onwards carry no lump-sum severance obligation for the employer on dismissal. The system known as Abfertigung neu funds severance in advance instead. From the second month of employment, the employer pays 1.53% of everything paid, the two special payments included and with no ceiling, into a severance fund (Betriebliche Vorsorgekasse) chosen by the employer. ÖGK collects the contribution with social insurance and passes it on.

When the employer ends the contract and the employee has at least three contribution years, the employee can take the balance as a cash payment. After a resignation, or with fewer than three years, the money stays invested at the fund. In both cases the employer’s cost has already been met month by month, so the dismissal itself creates no new severance liability. Our article on social insurance in Austria explains the fund in more detail.

For scale: on a €60,000 Vienna salary, 1.53% is €918 a year. Over three years that makes €2,754 paid in, plus whatever the fund earns on it. If you end the contract once three contribution years are complete, the employee may take that pot as cash, and every euro of it came from contributions you have already made.

Two related points come up at the exit. A non-compete clause falls away when the dismissal comes from the employer, except where the employee’s own serious misconduct prompted it. And absences during the notice period follow the usual rules; sick pay in Austria sets out what the employer continues to pay when an employee falls ill.

Larger reductions trigger the early-warning system (Frühwarnsystem) under § 45a of the labour market promotion act (AMFG). The employer has to notify the public employment service, AMS, a minimum of 30 days ahead of any notice if it plans, within any 30-day period, to dismiss more people than the threshold for its size.

The thresholds scale with headcount. A business employing 21 to 99 people reaches it at five dismissals. Between 100 and 600 people, it is five per cent of the workforce. Above 600, it is thirty. Independently of size, letting five or more people aged 50-plus go in the same window also triggers the duty.

Notices given before the AMS has been told, or during the 30 days that follow, are void. A company with two or three people in Austria will rarely reach these numbers, but the rule matters for any regional restructuring that includes an Austrian team.

Where your Austrian staff are employed through Employer of Record Austria, deciding to end the employment remains your business call, and we handle the Austrian steps: checking the service date and the earliest permitted end date, serving notice properly, running the final payroll and filing the de-registration. The EOR’s role in Austria is described from hire to exit in a separate article. Tell us as early as possible when you are considering a dismissal, share the reasons and any notes you hold, and we will set out the dates, the cost of the notice period and any protection that applies before anything is handed to the employee. Our guide to the EOR onboarding steps in Austria covers the start of the relationship.