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Cost-of-Living Compensation Bonus in Personnel Leasing: First Court Decision on the Reference Wage System

  • Writer: Mario Schrank
    Mario Schrank
  • Aug 5
  • 3 min read

Must personnel leasing companies pay the collectively agreed cost-of-living compensation bonus in addition to the reference wage? This question has been the subject of ongoing debate among companies, payroll professionals and labour law experts in Austria. A recent decision by the Regional Court of Leoben provides the first judicial guidance on this issue.

Although the decision is not yet final, it offers valuable practical guidance for companies operating in the personnel leasing sector.


At a Glance

  • The Regional Court of Leoben ruled that leased employees are not entitled to an additional collectively agreed cost-of-living compensation bonus.

  • According to the court, the bonus is already reflected in the reference wage system provided for in the Collective Agreement for Personnel Leasing.

  • The decision is not yet legally binding, and a final ruling by the Austrian Supreme Court is still pending.

Background of the Case

A leased employee claimed that, in addition to his regular remuneration, he was entitled to receive the collectively agreed cost-of-living compensation bonus.

The personnel leasing company argued that this bonus had already been taken into account through the reference wage system established under the Austrian Collective Agreement for Personnel Leasing (Arbeitskräfteüberlassung).

In the specific case, the employee received a reference wage amounting to 116.5% of the collectively agreed minimum wage applicable under the collective agreement of the user undertaking.

The central legal question was therefore:

Must the cost-of-living compensation bonus be paid in addition to the reference wage, or is it already covered by the reference wage system?


Decision of the Regional Court of Leoben

The Regional Court of Leoben agreed with the personnel leasing company.

According to the court, the purpose of the reference wage system is to reflect the standard level of remuneration applicable within the user undertaking. Requiring an additional payment of the cost-of-living compensation bonus could therefore result in an unjustified financial advantage for leased employees compared with the permanent workforce of the user undertaking.


Difference from the Austrian Supreme Court's COVID Bonus Decision

The decision is particularly noteworthy because it distinguishes the present case from an earlier ruling of the Austrian Supreme Court concerning the collectively agreed COVID bonus.

While the Supreme Court recognised an additional entitlement in that case, the Regional Court of Leoben reached a different conclusion due to the specific characteristics of the reference wage system applicable to personnel leasing.


What Does This Mean for Personnel Leasing Companies?

Until a final decision is issued by the Austrian Supreme Court, personnel leasing companies should:

  • verify that the correct reference undertaking has been identified under the applicable collective agreement;

  • ensure that the reference wage has been calculated correctly;

  • maintain proper documentation of wage calculations and payments; and

  • closely monitor further developments in Austrian case law.

Even minor differences in collective agreement classifications can have significant financial implications.


Conclusion

The decision of the Regional Court of Leoben represents an important first point of reference for companies in the personnel leasing sector.

For the first time, a court has held that the collectively agreed cost-of-living compensation bonus does not have to be paid separately where the reference wage has been correctly determined. Whether this legal view will ultimately be confirmed by the higher courts remains to be seen.


Frequently Asked Questions

Is the decision already legally binding?

No. The judgment of the Regional Court of Leoben is not yet final and may still be reviewed by higher courts.

Are leased employees entitled to the cost-of-living compensation bonus?

According to the current judgment, generally not, provided that the reference wage has been correctly determined and paid in accordance with the applicable collective agreement. However, a final ruling by the Austrian Supreme Court is still pending.

What should personnel leasing companies do now?

Companies should review their reference wage calculations, verify the underlying reference undertaking and continue monitoring further developments in Austrian labour law.


Do you have questions about personnel leasing or payroll compliance in Austria?

We advise companies on Austrian payroll, personnel leasing, collective agreements and employment law. Our team is happy to assist you in assessing the impact of current court decisions on your business.


Legal Notice

This article is intended for general information purposes only and does not constitute legal advice. It reflects the current legal position at the time of publication. As the decision is not yet legally binding, each individual case should be assessed separately.



 
 
 

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