Exactly the same as International Jet Management (IJM) also in Vienna!
The insurance question is a very valid one and IJM even made it compulsary for pilots to buy their insurance either through IJM or elsewhere.
It is not legal, it is just a cheap way to employ you whilst at the same time making sure you have no employment rights whatsoever. Mind you, nothing much that IJM do is legal!
But as the ops inspector is a friend of felix feller nothing much will change!