LIECHTENSTEIN Law and Practice Contributed by: Hannes Arnold, Thomas Nigg, Christina Pointner, Sebastian Auer, Johannes Sander, René Saurer and Marta Baftiaj, Gasser Partner
4.5 Employee Representations An employee representation body is not mandatory in every undertaking, but employees have a statu - tory right to representation once certain thresholds are met. The workforce is entitled to a representative from among its members in undertakings (enterprises) with at least 50 employees and in establishments that are attributable to an enterprise and are at the same time independent tax subjects (parts of an enterprise) with at least 20 employees. The employee representative body serves primarily as an information and consultation body, rather than as a corporate management body. The labour law obli - gations to inform and consult employee representa - tives are particularly significant in cases of transfers of undertakings and collective redundancies. For employees in Liechtenstein, the wealth and income tax ( Vermögens - und Erwerbssteuer ) is of pri - mary relevance. Individuals are subject to income and wealth tax. Income tax is calculated based on taxable income. Wealth tax applies to all kinds of assets, including movable and immovable assets. Many proceeds are not subject to profit and income tax but are subject to wealth tax (no double taxation). Natural persons are subject to unlimited tax liability if they are resident or habitually present in Liechtenstein. Without a domicile or habitual residence, only limited tax liability arises in respect of domestic connecting factors. In practical terms, this means that employees with a Liechtenstein nexus are subject to tax either on their worldwide income by virtue of their domicile or on their Liechtenstein income by virtue of domestic employment. A withholding tax ( Quellensteuer ) is levied on employ - ment income, which is credited against the assess - 5. Tax Law 5.1 Taxes Applicable to Employees/ Employers
The terminating party must state the reasons for the termination in writing if the other party so demands. Statutory notice periods depend on the length of service. After expiry of the probationary period, the employment relationship may be terminated with one month’s notice in the first year of service, two months’ notice from the second to the ninth year of service, and three months’ notice thereafter, in each case effective at the end of a calendar month. Abusive terminations remain valid in principle but give rise to compensation claims. The ABGB considers as abusive, among others, terminations on grounds of personal characteristics, the exercise of constitutional rights, the frustration of claims, or because the other party asserts claims arising from the employment rela - tionship in good faith. Termination without notice is only permissible for cause ( wichtiger Grund ). A cause is deemed to exist in any circumstance in which the terminating party cannot, in good faith, reasonably be expected to con - tinue the employment relationship. Where an employ - ee is dismissed without notice and without cause, the employee is entitled to compensation for “what he or she would have earned had the employment relation - ship been terminated in compliance with the notice period or upon expiry of the agreed contract term”. Collective redundancies trigger special information, consultation and notification procedures. A collective redundancy is defined as planned dismissals that are unrelated to the person of the employees and that affect at least 20 employees within a period of 90 days, regardless of the size of the undertaking. The employer must inform and consult the employee rep - resentatives in good time so that they may put for - ward counter-proposals, in particular regarding “the possibility of avoiding or reducing planned collective redundancies” and mitigating their consequences, for example through “retraining”. In addition, notifica - tion must be filed with the Office of Economic Affairs ( Amt für Volkswirtschaft ); planned collective redun - dancies generally take effect no earlier than 30 days after receipt of the notification, although the Office may extend this period to “60 days” where there is a legitimate interest.
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