The Supreme Court (OGH) recently clarified in a decision that the new regulation of Section 1159 ABGB on notice periods and dates introduced on 1 October 2021 does not apply to freelance employment relationships. This means that a legal issue that has been controversial for years has been decided by the highest court.
Initial situation: cancellation in the event of insolvency
In the case in question, a freelance employee had terminated the freelance employment relationship in the course of the client's insolvency and subsequently claimed insolvency remuneration on the basis of the new labour law termination regulation. This regulation provides for a notice period of between six weeks and five months for employees, depending on the length of service, and the end of the quarter as the termination date.
However, the Supreme Court clearly rejected the application of these provisions to freelance employment relationships and justified this as follows:
- Purpose of the law: The amendment, which came into force in 2021, was aimed solely at harmonising the termination regulations for blue-collar and white-collar employees. An extension to freelance employment relationships was not intended.
- No analogous application: Labour law protection provisions are only applicable to freelance employment relationships if they serve the purpose of social security and are not based on personal dependency. As the content of the new regulation is based on Section 20 AngG - which is also not applicable to freelance employment relationships - an analogous application is also out of the question according to the Supreme Court.
- Contractual notice period permissible: In the specific case, a notice period of four weeks was agreed in the freelance employment contract. The Supreme Court considered this period to be reasonable and not surprisingly short. It was thus confirmed that freelance employment relationships can still be terminated subject to a reasonable notice period in the absence of a special provision.
Recommendations for action in practice
This results in a clear recommendation for entrepreneurs: Freelance service contracts should always include an explicit provision on the notice period. This ensures legal certainty and minimises the potential for disputes - especially in the event of contract termination.
If no specific notice period has been agreed, a “reasonable notice period” applies. For example, a notice period of one month to the end of the month can be used as a practical guideline.
Created: 06.05.2025
Source: Kraft & Kronberger specialised publications
Photo: Pexels/Olly
