AS TO THE ADMISSIBILITY OF
Application No. 23085/93
by Ilse BAUMGARTNER and Others
against Austria
The European Commission of Human Rights (First Chamber) sitting
in private on 16 January 1996, the following members being present:
Mr. C.L. ROZAKIS, President
Mrs. J. LIDDY
MM. E. BUSUTTIL
A.S. GÖZÜBÜYÜK
A. WEITZEL
M.P. PELLONPÄÄ
B. CONFORTI
N. BRATZA
I. BÉKÉS
E. KONSTANTINOV
G. RESS
A. PERENIC
C. BÎRSAN
K. HERNDL
Mrs. M.F. BUQUICCHIO, Secretary to the Chamber
Having regard to Article 25 of the Convention for the Protection
of Human Rights and Fundamental Freedoms;
Having regard to the application introduced on 16 August 1993 by
Ilse BAUMGARTNER and Others against Austria and registered on
14 December 1993 under file No. 23085/93;
Having regard to the reports provided for in Rule 47 of the Rules
of Procedure of the Commission;
Having regard to the observations submitted by the respondent
Government on 5 December 1994 and the observations in reply submitted
by the applicants on 10 February 1995;
Having deliberated;
Decides as follows:
THE FACTS
The facts of the case, as submitted by the parties, may be
summarised as follows.
A. Particular circumstances of the case
The applicants, whose names are annexed to this report, were at
the relevant time employees of a limited company with seat in Vienna.
In the proceedings before the Commission, the applicants are
represented by Mr. Georg Grießer, a lawyer practising in Vienna.
On 11 January 1993 composition with creditors proceedings
(Ausgleichsverfahren) were instituted with regard to the applicants'
employer company.
In the context of these proceedings the employer company
requested the Vienna Commercial Court (Handelsgericht) for permission
to terminate the contracts of employment of sixty-eight employees,
including the applicants, in accordance with SS. 20 b and c of the
Composition with Creditors Act (Ausgleichsordnung).
On 22 February 1993 the Vienna Commercial Court granted this
permission without hearing the applicants. The Court found that the
further employment of the applicants would endanger the composition
with the employer's creditors while the applicants would not suffer
disproportionate damage, as they were due to receive compensation under
the Insolvency (Continued Payments) Act (Insolvenz-Entgelt-
sicherungsgesetz). The applicants appealed against this decision. They
contested the court's assessment as regards the damage they would
suffer from the application of SS. 20 b and c of the Composition with
Creditors Act. In particular, they submitted that their claims
resulting from the premature termination of their employment would not
be fully covered by the Insolvency (Continued Payments) Act.
On 15 March 1993 the employer company, in pursuance of the
Court's permission and in accordance with the periods of notice
provided for by law, gave the applicants notice of the termination of
their contracts of employment which became effective on 26 April,
15 May, 15 June, 15 July or 15 August 1993 respectively. If S. 20 of
the Employees Act had been applicable, twenty of the applicants could
have only been dismissed 15 days later, eleven applicants only 45 days
later, three applicants 64 days and seven applicants only 75 days
later.
The applicants did not lodge any action against their dismissal
with the Labour Court, considering that their dismissal was justified
due to business requirements (S. 105 of the Industrial Relations Act)
in view of the composition with creditors proceedings and the
subsequent bankruptcy proceedings.
On 23 March 1993 the Vienna Commercial Court rejected the appeal
lodged by the applicants against its decision of 22 February 1993. It
noted that, according to S. 20 b para. 2 of the Composition with
Creditors Act, no remedy was available against the permission to
terminate contracts of employment.
On 24 March 1993 the Vienna Commercial Court opened subsequent
bankruptcy proceedings (Anschlußkonkursverfahren) concerning the
employer company.
B. Relevant domestic law and practice
1. Composition with Creditors Act (Ausgleichsordung)
SS. 20 b and c of this Act, in the version, which was in force
at the time of the relevant facts, provided as follows.
S. 20 b para. 2 stated that the debtor, provided permission is
given by the Court, may give notice of termination of contracts which
have not been entirely fulfilled at the time of the institution of the
composition proceedings. If appropriate, the Court has to hear the
other contracting party and the administrator in the composition
proceedings before taking a decision. Permission to give notice of
termination of a contract may only be given if its fulfilment would
endanger the composition with creditors or the further existence of the
enterprise, and if the other contracting party will not suffer
disproportionate damage. The decision of the Court has to be served
upon the debtor, the administrator in the composition with creditors
proceedings and the other contracting party. There is no appeal against
the Court's decision.
S. 20 c para. 2 stated that S. 20 b is also applicable to
contracts of employment, where the debtor is the employer. In such
cases, the Court may allow the debtor to give notice of the termination
of contracts of employment. The debtor has to respect the period of
notice (Kündigungsfrist) provided for in the law or in a collective
agreement, but is not bound to respect a longer period of notice which
might have been agreed upon in a specific contract, or the duration of
employment agreed upon in a fixed term contract. Apart from that, the
employer has to respect restrictions on the termination of contracts
of employment provided for by law (gesetzliche Kündigungs-
beschränkungen).
According to Court practice, the employer, when dismissing
employees under SS. 20 b and c, is not bound by the date for
termination of contracts (Kündigungstermin) prescribed in S. 20 of the
Employees' Act (see below).
S. 20 d provides that if the debtor terminates a contract under
SS. 20 b or 20 c, the other contracting party may claim compensation
for damage suffered, and participates in the composition with creditors
proceedings.
S. 23 para. 1 (3) provides that claims of employees are
privileged in the composition with creditors proceedings, if the
employment has been taken up before the introduction of such
proceedings and has not been terminated by the debtor under
SS. 20 b and c.
2. Employees' Act (Angestelltengesetz)
S. 20 deals with the termination of contacts of employment which
have not been concluded for a fixed term. The employer may terminate
the contract at the end of each quarter of the year (Kündigungstermin)
after giving prior notice. The period for giving notice
(Kündigungsfrist) is six weeks, after two years of employment it is two
months, after five years of employment it is three months, after
fifteen years of employment it is four months and after 25 years of
employment it is five months (paragraph 2). The employee can terminate
the contract at the end of each month with one month's notice
(paragraph 4).
3. Industrial Relations Act (Arbeitsverfassungsgesetz)
S. 105 deals with the dismissal of employees.
Before dismissing an employee the employer shall notify the works
council, which may comment within five days (paragraph 1).
Provided the works council has not expressly authorised the
dismissal within this period, application may be made to the Court
inter alia if the dismissal is not justified from a social point of
view and the dismissed employee has already been in the employment of
the undertaking for six months. Dismissal is unjustified from a social
point of view, when it damages the employee's important interests,
unless the employer can prove that inter alia it is due to business
requirements which militate against continued employment (paragraph 3).
The employer is required to give the works council notice of the
dismissal. If it has expressly objected to the proposed dismissal, the
works council may, within one week of being notified, contest it before
the Court at the dismissed employee's request. If the works council
does not act on the employee's request, he may himself do so within one
week following he expiry of the time-limit laid down for the works
council (paragraph 4).
According to the Labour and Social Courts Act the Labour Courts
are competent to deal with these proceedings.
4. Insolvency (Continued Payments) Act (Insolvenz-Entgelt
Sicherungsgesetz)
S. 3 para. 3 provides that an employee, whose contract has been
terminated by the employer either before the opening of bankruptcy or
composition with creditors proceedings or after the opening of such
proceedings according to S. 25 of the Bankruptcy Act or according to
SS. 20 b and c of the Composition with Creditors Act, is entitled to
payment under this Act. The payment is due for claims under S. 1
para. 2 (i.e. claims for payment originating from the contract of
employment or its termination, claims for damages). Payment is due
until the end of employment. It may not be granted beyond the period
of notice (Kündigungsfrist), which is provided for by law or in
collective agreement and was applied respecting the date of termination
(Kündigungstermin) and any restrictions for the termination of
contracts provided for by law (gesetzliche Kündigungsbeschränkungen).
COMPLAINTS
1. The applicants complain under Article 6 para. 1 of the Convention
that they were not heard by the Vienna Commercial Court before it gave
their employer company permission to terminate their contracts of
employment under SS. 20 b and c of the Composition with Creditors Act.
They consider that this decision directly affected their civil rights
in that their claims relating to their employment were reduced. They
complain that their employer, based on the impugned decision, was
allowed to terminate their contracts without being bound by the date
for termination (Kündigungstermin) provided for in S. 20 of the
Employees' Act. They further allege that they were not fully
compensated under the Insolvency (Continued Payments) Act for the
damage suffered.
2. The applicants further complain under Article 4 of the Convention
that the termination of their contracts of employment under SS. 20 b
and c of the Composition with Creditors Act compelled them to work
without full pay, as they could not terminate their contracts
themselves without losing other claims, eg a lump sum payment which is
only due when the employer terminates the contract.
PROCEEDINGS BEFORE THE COMMISSION
The application was introduced on 16 August 1993 and registered
on 14 December 1993.
On 2 September 1994 the Commission decided to communicate the
application to the respondent Government, pursuant to Rule 48
para. 2 (b) of the Rules of Procedure.
The Government's written observations were submitted on
5 December 1994. The applicants replied on 10 February 1995.
THE LAW
1. The applicants complain under Article 6 para. 1 (Art. 6-1) of the
Convention that they were not heard by the Vienna Commercial Court
before it gave their employer company permission to terminate their
contracts of employment under SS. 20 b and 20 c of the Composition with
Creditors Act.
Article 6 para. 1 (Art. 6-1), so far as relevant, reads as
follows:
"In the determination of his civil rights and obligations ...,
everyone is entitled to a fair ... hearing ... by an independent
and impartial tribunal ..."
a. The Government submit that the applicants failed to exhaust
domestic remedies as required by Article 26 (Art. 26) of the
Convention. Firstly, they submit that the applicants did not appeal to
the Vienna Court of Appeal against the decision of 23 March 1993
rejecting their appeal, although this is possible in accordance with
the provisions of the Code of Civil Procedure (Zivilprozeßordnung).
Thereby, they also prevented the Vienna Court of Appeal from requesting
the Constitutional Court to review the constitutionality of the
contested provisions of the Composition with Creditors Act. Secondly,
the Government submit that the applicants failed to challenge the
notice of termination of their employment under S. 105 of the
Industrial Relations Act. They argue that under this provision the
labour courts can declare the termination of employment invalid if the
interests of the employee prevail over those of the employer.
The applicants contest the Government's view. They submit that
S. 20 b of the Composition with Creditors Act is perfectly clear in
that it states that there is no appeal against a decision taken under
this provision. Thus, they would not even have been obliged to lodge
the appeal, which was rejected by the Commercial Court on 23 March
1993. Any further appeal to the Vienna Court of Appeal would have been
to no avail. It is true that this Court has a right to challenge a law
before the Constitutional Court, but the party concerned is not
entitled to have such proceedings instituted. As regards possible
proceedings under S. 105 of the Industrial Relations Act, the
applicants submit that they would not offer any prospects of success.
They argue that other courts would be bound by the decision of the
Vienna Commercial Court. Thus, they would not be able to come to a
different assessment when examining whether the interests of the
applicants prevailed over the employer's interest in terminating their
contracts under S. 20 b of the Composition with Creditors Act.
Moreover, the applicants point out that the proceedings under S. 105
of the Industrial Relations Act are aimed at restoring the employment,
whereas they wished to complain about the effects of the termination
of their contracts of employment under S. 20 b of the Composition with
Creditors Act, as compared to termination in accordance with the
general provisions of labour law.
The Commission recalls that Article 26 (Art. 26) of the
Convention only requires the exhaustion of such remedies which relate
to the breaches of the Convention alleged and at the same time can
provide effective and sufficient redress. An applicant does not need
to exercise remedies which, although theoretically of a nature to
constitute remedies, do not offer any chance of redressing the alleged
breach (cf. No. 20357/92, Dec. 7.3.1994, D.R. 76-A p. 87).
In the present case, the Commercial Court, on 22 February 1993,
gave the applicants' employer permission to terminate their contracts
of employment under SS. 20 b and c of the Composition with Creditors
Act. On 23 March 1993 it rejected the applicants' appeal on the ground
that, according to S. 20 b of the said Act, no remedy was available
against its decision. There is no indication that a further appeal to
the Vienna Court of Appeal would have had any prospect of success. In
particular, the applicants could only have suggested to this Court to
challenge the contested provisions before the Constitutional Court,
without the Court being obliged to do so.
As regards the possibility to challenge the termination of their
employment, the Commission finds that the proceedings under S. 105 of
the Industrial Relations Act are aimed at the continuation of
employment. They do not, however, offer the applicants a possibility
to claim that the general rules of labour law, instead of SS. 20 b
and c of the Composition with Creditors Act, should be applied to the
termination of their contracts of employment.
In conclusion, the Commission finds that the applicants have
exhausted domestic remedies as required by Article 26 (Art. 26) of the
Convention.
b. As regards the merits of the complaint, the Government submit
that the Commercial Court's decision of 22 February 1993, did not
determine the applicants' civil rights and obligations within the
meaning of Article 6 (Art. 6) of the Convention. They submit in
particular that this decision only gave the applicants' employer
permission to terminate their contracts of employment prematurely in
accordance with SS. 20 b and c of the Composition with Creditors Act.
Further, the Government argue that the Commercial Court's
refraining from hearing the applicants was justified. They refer to
S. 20 b of the Composition with Creditors Act which, in the version
applicable at the relevant time, stated that the competent court has
to hear the employees concerned, if appropriate. They point out that
in the composition with creditors proceedings close deadlines have to
be observed. Given that sixty-eight employees were concerned by the
employer's request, hearing all of them would have caused considerable
delay and would have jeopardized the composition with creditors.
Moreover, the Commercial Court found that the applicants would not
suffer disproportionate damage from the termination of their contracts
of employment. Further, the Government again refer to S. 105 of the
Industrial Relations Act and argue that the applicants had the
possibility to challenge the termination of their employment as being
unjustified from a social point of view before the labour court and to
be heard in these proceedings.
Finally, the Government, referring to S. 3 para. 3 of the
Insolvency (Continued Payments) Act, submit that the applicants were
entitled to full compensation. They argue that this provision inter
alia applies to compensation claims under S. 20 d of the Composition
with Creditors Act, which are designed to cover any losses suffered as
a result of the premature termination of employment as compared to a
regular notice given by the employer.
The applicants submit that the Commercial Court's decision
directly affected their civil rights within the meaning of Article 6
(Art. 6). They submit in particular that it allowed their employer to
terminate their contracts without being bound by the date for
termination provided for in S. 20 of the Employees' Act, and thus to
terminate them within a shorter period. Moreover, all their claims were
reduced to the quota in the composition with creditors proceedings and
the subsequent bankruptcy proceedings.
Further, the applicants submit that the need to carry out the
composition with creditors proceedings speedily cannot justify the fact
that they were not heard at all. As regards the possibility to
challenge the termination of their employment under S. 105 of the
Industrial Relations Act the applicants refer to their above
submissions, namely that the labour courts could not come to a
different assessment of the interests involved; and that the
proceedings were not suited to assert their claim that they suffered
damages from the termination of their employment under SS. 20 b and c
of the Composition with Creditors Act.
Finally, the applicants argue that they are not entitled to full
compensation under the Insolvency (Continued Payments) Act. In
particular they submit that, according to the Supreme Court's case-law
at the relevant time, claims under S. 20 d of the Composition with
Creditors Act, resulting from the premature termination of employment,
were not covered by S. 3 para. 3 of the Insolvency (Continued Payments)
Act. Moreover, if subsequent bankruptcy proceedings were opened, like
in the present case, no such compensation claim exists.
The issues to be decided are whether, in regard to the Vienna
Commercial Court's decision to permit the applicants' employer to
terminate their contracts of employment under SS. 20 b and c of the
Composition with Creditors Act, the applicants were entitled to a
procedure in accordance with Article 6 para. 1 (Art. 6-1) of the
Convention and, if so, whether such a procedure was available to them.
After an examination of these issues in the light of the parties'
submissions, the Commission considers that they raise questions of fact
and law which can only be determined by an examination of the merits.
It follows that this complaint cannot, therefore, be declared
inadmissible as being manifestly ill-founded within the meaning of
Article 27 para. 2 (Art. 27-2) of the Convention. No other grounds for
inadmissibility have been established.
2. The applicants further complain under Article 4 (Art. 4) of the
Convention that the termination of their contracts of employment under
SS. 20 b and c of the Composition with Creditors Act compelled them to
work without full pay, as they could not terminate their contracts
themselves without losing other claims, eg a lump sum payment which is
only due when the employer terminates the contract.
Article 4 para. 2 (Art. 4-2) reads as follows:
"No one shall be required to perform forced or compulsory
labour."
The Commission recalls that the concept of forced or compulsory
labour within the meaning of Article 4 para. 2 (Art. 4-2) comprises two
elements. These elements are first that the labour or service must be
performed by the person concerned against his will and secondly that
the obligation to perform this labour or service must be either unjust
or oppressive, or must itself constitute an avoidable hardship
(No. 9322/81, Dec. 3.5.83, D.R. 32 p. 182).
The Commission finds that the applicants entered freely into
their contracts of employment. Moreover it appears that, according to
S. 20 para. 4 of the Employees' Act, they were free to terminate them
with one month's notice. Moreover, the applicants failed to show that
the financial losses they would suffer from terminating their contracts
of employment, would be such as to amount to a restriction of their
contractual freedom. Therefore, it cannot be said that they had to
perform their work against their will. In any event, there is no
indication that the performance of their work can be considered as
unjust or oppressive or as constituting avoidable hardship.
It follows that this part of the application is manifestly ill-
founded within the meaning of Article 27 para. 2 (Art. 27-2) of the
Convention.
For these reasons, the Commission, unanimously,
DECLARES ADMISSIBLE, without prejudging the merits, the
applicants' complaint that they were not heard as regards the
permission to terminate their contracts of employment under
SS. 20 b and c of the Composition with Creditors Act;
DECLARES INADMISSIBLE the remainder of the application.
Secretary to the First Chamber President of the First Chamber
(M.F. BUQUICCHIO) (C.L. ROZAKIS)
Full & Egal Universal Law Academy