There are no maximum working hours for senior executives and, with the exception of health protection, the Labour Act does not apply.
Legal Basis
If an employee is classified as a higher executive employee, it has consequences for the applicable regulations concerning their employment. The Labor Act – with the exception of health protection provisions – does not apply to higher executive employees (Art. 3 lit. d ArG).
Higher executive employees are individuals who, based on their position and responsibilities, as well as depending on the size of the company, possess extensive decision-making powers or significantly influence decisions of great importance, thereby exerting a lasting impact on the structure, business operations, and development of a company or division thereof (Art. 3 lit. d LA, Art. 9 ArGV 1).
Interpretation
The provision in Art. 9 ArGV 1 contains indefinite legal terms that need to be interpreted in practice and can give rise to difficult delineation questions. The classification as a higher executive employee is done cautiously.
Individual aspects that may indicate a managerial function, such as the authority to sign or give instructions, or the level of salary, are not decisive on their own. What matters is the overall picture of the actual tasks performed, considering the company’s structure, regardless of the job title or the individual’s education. The terms used by the parties in the contract, employment references, or personnel regulations are not decisive. The assessment depends on the specific circumstances of each case and the actual duties performed.
Criteria
In general, it is necessary for the employee to have extensive decision-making powers or the ability to significantly influence decisions of great importance, thereby exerting a lasting impact on significant aspects of the company.
Criteria for possible classification as a higher executive employee include:
- Special position of trust within the company
- Authority to sign
- Authority to decide on significant matters of the company or significantly influence such decisions
- Independent decision-making power (merely making proposals is not sufficient)
- Influence on the company’s structure (organization, etc.)
- Influence on business operations
- Influence on development (orientation, product development, etc.)
- Size of the company
- Hierarchical structure of the company
- Hierarchical position within the company
- Authority to give instructions within the company
- Number of subordinates
- Responsibility for decisions
- Level of salary and other remuneration
The above list is not exhaustive. Even if one or more criteria are met, it is possible that the employee does not hold a higher executive position.
Delineation from other managerial employees
Employers are sometimes tempted to consider employees as higher executive employees in order to avoid the application of regulations on maximum working hours and overtime. However, the designation in the employment contract is not decisive.
The delineation between higher executive employees and other managerial employees is difficult, as reflected in the case law on this matter. The circumstances of each individual case, using the aforementioned criteria, must be considered as a whole.
Working hours
The working hours of higher executive employees are determined by the agreement in the employment contract and the needs of the company.
The provisions regarding working hours and rest periods do not apply to higher executive employees. Accordingly, there are no weekly maximum working hours, prohibitions on night and Sunday work, or minimum rest periods. The provisions regarding overtime work are also not applicable; therefore, higher executive employees are not entitled to overtime pay or compensation through time off.
Further reading
