Recovery and Claw-Back

Austria

1. Can an employer recover monies from an employee's salary in the following situations:

• It has erroneously overpaid salary or bonus to an employee

Yes. Erroneous overpayments can only be recovered to the extent that the employee has not used them up in good faith.

• The employee has caused damage to company property

Yes. Depending on the employee's level of culpability, damages may be recoverable only in part (or, in cases of slightest culpability, not at all).

• The employee has used a corporate credit card (e.g. AMEX etc.) for private expenditure

Yes.

• The employee has been paid an educational or sign on bonus

Yes. Expenses incurred for educational purposes can be recovered, if the training was suitable to further the employee's prospects (rather than to train the employee specifically for his job position with the employer) and the employee terminated the employment relationship without cause or was terminated on solid grounds. Furthermore, educational expenses are only recoverable on the basis of a written agreement between the employer and employee, whereby the recoverability of educational expenses shall decrease on a pro rata basis over a period (generally) up to four years.

The full recoverability of sign-on bonuses is controversial under Austrian law. Pursuant to statutory law, if the employment is terminated prior to the employee's remuneration or parts thereof becoming payable, the employee is entitled to prorated payment of such remuneration. The Austrian Supreme Court has yet to rule on whether this principle equally applies to sign-on bonuses may only be recoverable in part, if the employment relationship is terminated prematurely.

• The employee has received a severance package and then is subsequently rehired

Yes. Provided that this has been agreed upon between the parties. Such an agreement is hightly uncommon in the Austrian employment practice.

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