Austrian firms, lawyers complain to EU about ‘wage dumping’ law

VIENNA: An Austrian law to deter companies from contracting out work to lower-cost eastern European firms breaches EU regulations, an industry body has argued in a filing to the European Commission, which has supported this view in a related court case.

Au s t ’ s Association of Me t a l t e c h n o l o g y Industries said late on Tuesday it had filed the complaint over the law against companies that use cut-price labour, saying it makes it hard for Austrian groups to work with foreign contractors.

The association listed as a recent example Austrian engineering group Andritz being fined around 22 million euros ($25.8 million) for using a Croatia-based contractor for a 7 million euro project in Austria.

Andritz has appealed against the fine. Wages in Austria are typically higher than in its eastern neighbours, many of which are EU members. The government in Vienna is pushing for ever-tougher laws to discourage Austrian r i a companies from hiring foreigners, a contentious goal given that within the EU the flow of services and workers should be free.

“The Association of Metaltechnology Industries has already filed a complaint in March ... with the EU Commission against the aspects of the (wage and social dumping law) that are contrary to (European) Union law,” the association said.

“The Andritz case shows ... that the assignment of (jobs to) external service providers is being rendered practically impossible,” it added.

Association chief Christian Knill said the way Austrian authorities interpret the law is a “permanent threat” to companies and he expected companies to exit the Austrian market gradually should such practices continue.

In a related case brought on behalf of Slovenian contractors, law firm Grilc Vouk Skof said it had asked the Commission for an opinion on Austria’s law.