The Supreme Court recently dealt with the question of whether the restriction on dismissal that accompanies short-time work merely obliges employers to maintain the level of em-ployment or whether there is individual protection against dismissal for employees.

There is consensus in the literature that the retention obligation associated with short-time work is fundamentally intended to maintain employment levels and avoid unemployment. Whether individual protection against dismissal can be derived from the social partner agreement was disputed in the literature until recently. The fact that no individual protection against dismissal can be derived from the social partner agreement is primarily justi-fied by the fact that subsidy-supported short-time work pursues labor market policy objec-tives - namely maintaining the level of employment and avoiding unemployment - and not the protection of the individual employee. The general protection against dismissal accord-ing to Section 105 Labor Constitution Act (ArbVG) exists in parallel. Counter-opinions argue that the social partner agreement also protects employees in addition to the labor market policy objectives. This is clear from the specific wording and the purpose of the prohibition of dismissal. Accordingly, a termination that violates the social partner agreement is legally invalid.

In its decision on GZ 8 ObA 48/21y, the Supreme Court has now clarified the situation: the interpretation of the social partner agreement is to be interpreted according to its purpose. The essential purpose of the social partner agreement is to create the prerequisite for obtaining short-time work subsidies pursuant to Section 37b (2) Labor Market Service Act (AMSG). In this context, the law explicitly focuses on the objective of maintaining the total number of employees in the company during short-time work and in any additional period agreed upon, without establishing additional individual protection against dismissal.

According to the Supreme Court, a notice of termination issued in contravention of Section 37a Labor Market Service Act (AMSG) in connection with the provisions of Item IV Section 2 lit a to c of the model social partner agreement during short-time work or the retention period is therefore not legally invalid. Nor do notice periods and/or termination dates change as a result of the retention obligation. However, the short-time work allowance must be taken into account in the context of a termination challenge pursuant to Section 105 Labor Constitution Act (ArbVG) when assessing whether a termination is operationally necessary.