Austria’s highest civil court has drawn a bright line around non-compete agreements, ruling that clauses barring employees from poaching colleagues are legally identical to traditional competition bans. The decision, which rejected a claim for €35,000 in contractual penalties (case number 9 ObA6/26m), subjects such “employee-protection clauses” to the same strict validity criteria as any other restraint of trade.
Under Austrian law, for a non-compete clause to hold, the worker’s gross monthly salary must have been at least €4,620 at the time the contract was signed in 2026. The restriction can last no longer than one year and must explicitly reference the employer’s line of business. In the case before the court, the clause failed because the employee’s pay fell below that statutory threshold.
Across the border, Germany’s Federal Labor Court (BAG) has slammed the door on employers trying to fix procedural slip-ups in mass layoffs. Rulings in cases 6 AZR 157/22 and 6 AZR 152/22 make clear: if a company submits its required mass-dismissal notification to the Federal Employment Agency before completing the consultation process with the works council, the resulting terminations are permanently void. There is no way to cure the error retroactively.
The BAG also tightened rules around parental leave. Protection against dismissal applies separately to each individual leave period. Separately, the court clarified that dropping a termination letter into a mailbox via registered mail does not, by itself, prove the employee actually received it.
From Luxembourg, the European Court of Justice (ECJ) handed down two decisions with direct workplace impact. In case C-484/24, the ECJ ruled that evidence obtained through unlawfully collected employee data is not automatically inadmissible. National courts must weigh the interest in proving a case against the severity of the data breach, case by case.
A second ECJ judgment reclassifies employer-organized group travel from a central meeting point to the work site as full working time. For workers paid the minimum wage, unpaid commute time may push effective hourly earnings below €13.90 (the rate as of January 1, 2026). That could trigger back-pay claims within Germany’s three-year statute of limitations.
On the legislative front, Labor Minister Bas presented a draft reform of Germany’s Working Time Act in June 2026. The key shift: moving away from the rigid eight-hour day toward a weekly maximum, which could be customized through collective bargaining agreements. The proposal also mandates electronic time tracking on the same day work is performed.
Separately, a government-appointed pension commission has recommended overhauling the retirement system. Among its proposals: introducing a capital-funded pension by investing two percent of gross wages, raising the retirement age for long-term contributors to 64, and, starting in 2041, linking the retirement age to rising life expectancy.
