Austria: Summer in Sight: A practical guide to vacation leave under Austrian employment law (Part I)

1    Vacation requires an agreement

Under the Austrian Vacation Act (Urlaubsgesetz, UrlG), the duration and timing of an employee's vacation must be agreed upon between the employer and the employee, taking into account both the needs of the business and the employee's opportunity to rest and recuperate. In practice, this means that both sides need to agree on when the vacation starts and how long it lasts. The employer cannot simply instruct an employee to take time off, and – with very few exceptions – the employee cannot decide on their own when to go on vacation. In other words, a vacation request from the employee still needs the employer's approval. That said, no specific form is required for this agreement – it may be concluded verbally or may arise implicitly from the parties' conduct.

2    Vacation and sick leave – reporting obligations and interruption of vacation

If an illness was already known before a vacation agreement was finalised, the employee must not begin their vacation for the duration of that illness (Section 4(2) UrlG). If vacation is nevertheless agreed for that period, the days spent unable to work will not count as vacation days. If the employee was not yet aware of the illness at the time of the agreement, or if the illness only arises after the vacation agreement has been concluded, the employee has the right to withdraw from the vacation arrangement (9 ObA 2082/96h).

If an employee falls ill during their vacation – without having caused the illness intentionally or through serious negligence – the vacation is interrupted, provided the illness lasted longer than three calendar days (Section 5(1) UrlG). The interruption only covers the actual days of illness; after that, the vacation continues as originally planned. The vacation is not automatically extended because of the interruption, though the employer and employee can agree to extend it.

For this rule to apply, the employee must follow certain steps. If the illness lasts more than three days, the employee must notify the employer without delay. Upon returning to work, the employee must promptly provide a medical certificate or confirmation from the health insurance provider stating the start, duration and cause of the illness. If the employee fails to meet these obligations, the vacation remains unaffected, meaning that the sick days will simply count as vacation days.

3    Compensatory time off and sick leave – an important distinction

The vacation interruption rule described above does not apply when an employee is taking compensatory time off (i.e. time off in lieu of overtime), even if the time off is used for vacation purposes. If an employee falls ill during compensatory time off, they have no right to withdraw from the arrangement and will not get those days back (9 ObA 17/25b). The Supreme Court held that the main purpose of compensatory time off is not rest and recuperation, but merely a different distribution of working hours. For this reason, applying the vacation interruption rules by analogy is not an option.

4    Takeaways

The vacation season brings a range of employment law topics that can be handled smoothly with a bit of advance planning. Whether it concerns getting the vacation agreement right or understanding what happens when an employee falls ill during time off, a proactive approach and clear communication up front help ensure transparency and prevent disputes down the line. Questions around work-from-anywhere ("workation") arrangements and the extent to which employees can be reached during vacation also arise regularly in practice. These topics will be covered in our next article. Stay tuned!