Conversion of an all‑in salary upon a change from full‑time employment to parental part‑time employment

While earlier decisions concerned exclusively so‑called “non‑genuine all‑in agreements” – i.e. agreements with a defined number of included additional or overtime hours – a recent case for the first time dealt with a “genuine all‑in agreement” (with no specific number of included additional or overtime hours).

Facts of the case

In 2011, an employment contract drafted by the employer was concluded, providing for an all‑in salary. Both contracting parties assumed that additional and overtime hours would accrue; however, the contract neither specified a basic salary nor determined the proportion of additional and overtime hours included in the total remuneration. Nor were there any other indications that a specific (even approximate or average) number of additional or overtime hours had been taken into account or “priced in” when determining the all‑in salary.

Following the birth of her daughter and subsequent parental leave, the employee switched to parental part‑time employment. The employer calculated the new part‑time salary by deducting a monetary portion attributable to additional and overtime hours from the all‑in salary, basing this deduction on the average number of additional and overtime hours actually worked during the last two years prior to parental leave. The remaining salary was then prorated to the agreed part‑time working hours.

The employee took the view that she was entitled to a part‑time salary calculated on a pro rata basis using the full all‑in remuneration and brought an action to recover the resulting difference.

Decision of the Supreme Court (OGH)

While the court of first instance dismissed the claim (in part), the employee ultimately prevailed before the appellate court and, finally, before the Austrian Supreme Court (Oberster Gerichtshof – OGH) (OGH 19 February 2026, 9 ObA 62/25w).

In its reasoning, the Supreme Court stated inter alia:

“Having regard to the – decisive – point in time of the conclusion of the contract, no differentiation can be made between a basic salary and the portion of remuneration attributable to additional and overtime work. Pursuant to the rule of interpretation set out in Section 915 second sentence of the Austrian Civil Code (ABGB), ambiguous declarations are to be interpreted to the detriment of the party who used them. If, therefore, the interpretation of an all‑in agreement does not allow for the determination of a remuneration component attributable to the performance of additional and overtime work, the prorated remuneration during parental part‑time employment must be calculated on the basis of the entire all‑in salary.”

Note

The case decided by the OGH concerned an all‑in agreement concluded prior to 1 January 2016, i.e. before the entry into force of the amended version of Section 2(2)(9) AVRAG and Section 2g AVRAG. However, difficulties in delineation may also arise in the case of more recent agreements.

Although, since 2016, the employment contract or written statement of employment terms is required to expressly state a basic salary or basic wage, the allocation may still prove problematic where an all‑in salary includes, in addition to the basic salary or basic wage and remuneration for additional/overtime hours, other remuneration components relating to normal working hours, such as function‑related allowances or various supplements (e.g. for night work, Sundays/public holidays or hazardous working conditions – SFN or SEG allowances). In such cases, the basic salary or basic wage does not constitute a reliable basis for distinguishing between remuneration for normal working hours and remuneration for additional or overtime work.

Overall assessment based on Supreme Court case law

Taking all Supreme Court decisions together, the issue can be summarised as follows:

• “Non‑genuine all‑in”:
  If the portion of the all‑in salary attributable to additional and overtime hours can be identified in monetary terms (e.g. because the number of additional or overtime hours included in the all‑in remuneration was expressly or implicitly agreed), this portion is suspended upon the transition to parental part‑time employment. In other words, the portion attributable to additional and overtime hours may be deducted from the all‑in salary prior to prorating it to part‑time hours (see, for example, OGH 28 September 2022, 9 ObA 83/22d, and OGH 24 October 2022, 8 ObA 22/22a).
• “Genuine all‑in”:
  If, by contrast, it is not possible to determine which portion of the all‑in salary relates to additional and overtime hours, the part‑time salary upon transition to parental part‑time employment must be calculated on the basis of the entire all‑in remuneration (OGH 19 February 2026, 9 ObA 62/25w).

Practical remark

In principle, the parties may, in individual cases, agree on different calculation methods (provided that no mandatory statutory or collective bargaining provisions are violated). In practice, however, it is apparent that disputes frequently arise precisely where there is no mutual agreement on the calculation method, making legal clarification necessary.