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)