Sheet metal workers in Austria are taking legal action against a new law that requires them to pay into a fund for holiday and severance entitlements.

The law, part of the Construction Workers’ Holiday and Severance Act (BUAG), has led to retroactive bills amounting to €22.4 million across the sector.

The Sheet Metal Workers’ Interest Group (IG Spengler) plans to take the issue to Austria’s Constitutional Court, calling the additional costs “ruinous.”

The law, introduced in August this year, mandates that sheet metal workers contribute to a fund already used by other construction-related sectors. Despite negotiations reducing the original €45 million bill by half, the group argues that the payments place an unfair financial strain on businesses, with no clear benefit to employees.

Alois Perwein, the group’s founder and spokesperson, has said his own company now faces an annual bill of over €125,000, even after adjustments.

The new amendments, which followed a 2023 court ruling, allow for instalment payments and lower percentages for contributions like retirement and a sixth week of holiday. However, many businesses remain dissatisfied, with IG Spengler accusing the Chamber of Commerce of “half-hearted backroom negotiations.”

The group is now pushing for changes to the law, particularly to its retroactive implementation, which it argues is unconstitutional. Legal experts have also raised concerns about the blanket inclusion of sheet metal workers under BUAG.

The row comes at a time when employment in construction-related industries has fallen from nearly 150,000 in 2022 to 135,912 in 2024, reflecting a downturn in the sector.

As IG Spengler prepares for its constitutional challenge, the case highlights rising tensions between the construction sector and policymakers, with businesses warning that without reform, the law could undermine their financial stability.