Your employment contract governs remuneration, working hours, any fixed term, termination with notice and more. The clauses that need the most care are the non-compete clause, the contractual penalty, the all-in agreement, fixed terms and successive fixed-term contracts, and transfer clauses. In practice, many such clauses are wholly or partly invalid. Under the favourability principle, clauses that fall below the mandatory minimum standards of the law or the collective agreement generally have no effect. Ideally, have your contract reviewed before you sign.
Why have your employment contract reviewed?
Your employment contract – in legal terms the contract of service – sets out the terms on which you work: remuneration, working hours, duties, any fixed term, termination and much more. Much of it sounds harmless when you read it, but only matters when you leave the job or a dispute arises. If you only look closely at what you signed at that stage, you are often in a weak position.
A lawyer’s review before you sign gives you clarity. Which clauses actually bind you, which go too far, and which may be invalid? We review employment contracts for employees and for employers who want contracts that are legally sound – objectively, clearly and with an eye on what counts if it comes to a dispute.
Typical problem clauses in employment contracts
These are the points we come across most often in practice. They are not automatically unlawful – but they deserve a close look.
Fixed terms & successive contracts
A fixed-term employment relationship ends automatically on the agreed date. A single, objectively justified fixed term is generally permitted. If, however, several fixed-term contracts are strung together without an objective reason – known as successive fixed-term contracts – this may be unlawful. The result is that the employment is treated as permanent (the number of contracts and the requirements must be checked in each individual case).
Probationary period
During a one-month probationary period, either side can end the employment relationship at any time, without notice and without giving a reason. What matters is the length. If the agreed probationary period is too long, it is often valid only within the limits allowed by law or the collective agreement (the exact length must be checked in each individual case).
Non-compete clause
A non-compete clause prohibits you from working for a competitor for a certain period after your employment ends. The law – the Salaried Employees Act (AngG) – makes its validity subject to several conditions. These include a pay threshold, a maximum duration and limits on the activities and area it covers. Many clauses are wholly or partly invalid in the form agreed (the specific limits and the duration must be checked in each individual case).
Contractual penalty
A non-compete clause or a premature resignation is often backed up by a flat-rate penalty. The court has the power to reduce such contractual penalties: it can lower a penalty that is excessive. Whether a penalty is payable at all, and how much, depends closely on the facts of each case.
All-in agreement
An all-in agreement is meant to make your salary cover all additional hours and overtime at a flat rate. That is permitted – but not without limits. The pay you actually receive must always be at least your minimum entitlement under the collective agreement and the law. Checking this is known as the minimum-pay comparison. If you work more than the flat rate covers, back pay may be due.
Transfer & revocation clauses
Transfer and revocation clauses are common. They allow the employer to change your place of work or your duties unilaterally, or to change or withdraw voluntary allowances. However, they are not valid without limits – especially if they affect essential terms of the contract or put you at an unreasonable disadvantage.
How your contract relates to the collective agreement & the law
An employment contract does not stand on its own. Above it are the law and – in most sectors – a collective agreement. The favourability principle applies: a term that is more favourable to the employee than the law or the collective agreement takes precedence. Conversely, clauses that fall below mandatory minimum standards are generally invalid – even if they have been signed.
In practice, this is the most important point of any review: not everything in the contract actually applies. A disadvantageous clause does not make the contract worthless – often the rule in the law or the collective agreement simply takes its place (how far this goes must be checked in each individual case).
Your right to a written statement of terms
Even without a detailed written contract, employees are generally entitled to a written statement of terms and conditions. This is a written record of the main rights and obligations arising from the employment relationship (such as the start date, remuneration, working hours, duties and the applicable collective agreement). The written statement does not create any rights of its own, but it records what was agreed and makes it easier to prove. The law sets out what it must contain and by when you must receive it (the details must be checked in each individual case).
Check before you sign
The best time for a review is before you sign. After that, what was agreed generally applies – and it can be corrected later only to a limited extent. Points you can already check yourself:
- Do your pay, your grading and your working hours match the collective agreement?
- Is there a fixed term or a probationary period – and how long is it?
- Does the contract contain a non-compete clause, a contractual penalty or an all-in agreement?
- Does the employer reserve the right to transfer you or to withdraw allowances?
- Is it clear how, and with what notice period, the contract can be terminated?
If any of this leaves you unsure, a short expert assessment before you sign is worthwhile.
How we help
We review your employment contract clearly and to the point. We highlight problem clauses, assess how they relate to the collective agreement and the law, and tell you openly where there is room for negotiation. We do this for employees and for employers who want contracts that are legally sound – without false promises.
Contact: Teamanwälte, Mag. Johannes Bügler · Baumgartenstraße 82, 1140 Vienna · Phone +43 1 419 13 18 · office@teamanwaelte.at. Make an appointment – ideally before you sign.
For an overview of the whole area, see our page on Employment & social security law. Related topics: Challenging a termination and Summary dismissal.
Note: This page provides general information and is no substitute for legal advice on your individual case. The rules described on fixed terms, non-compete clauses, contractual penalties, all-in agreements and written statements of terms are a general guide. How they apply depends on the individual case, the applicable collective agreement and the current law. We cannot guarantee any particular outcome.