On 13 March 2020, the Swiss Federal Council decided to take further measures to contain the spread of the coronavirus in Switzerland, in protection of the population and the health system. It stated that it was aware of the significant economic impact of the prescribed measures. A support package of CHF 10 billion was announced, primarily to maintain salary payments.

Definition

A reduction in working hours (RWH) is the temporary reduction of contractual working hours ordered by the employer in agreement with the employees concerned, with the contractual relationship subject to labour law being maintained.

Conditions 

According to the State Secretariat for Economic Affairs SECO, the question of compensation for loss of work in connection with the coronavirus requires a distinction to be made between whether a loss of work is attributable to the inaccessibility of cities (measure of the authorities) or to the decline in demand due to fears of contamination (economic reasons):

• The RWH compensates for loss of work due to government measures (e.g. blocking access to cities) or other circumstances beyond the employer’s control;
• RWH compensates for unavoidable work losses due to economic reasons.

In addition, the following conditions must be fulfilled:

• The employment relationship must not have been terminated;
• The loss of work is likely to be temporary, and the reduction in working hours is expected to maintain jobs;
• The work schedule is controllable;
• The loss of work constitutes at least 10% of the total hours normally worked by the workers during the period for which the schedule is established;
• The loss of work is not attributable to circumstances that fall within the normal operating risk. According to SECO, the unexpected appearance of a new type of coronavirus and its consequences are not part of the normal operating risk;
• The worker must not have refused the allowance in case of reduced working hours.

However, the following persons are not entitled to compensation:

• Persons, and their spouse or registered partner, who determine or can significantly influence decisions made by the employer;
• Workers on fixed-term contracts;
• Apprentices;
• Workers on assignment on behalf of a temporary employment agency.

Employer’s obligations

 Employers have an obligation to:

• Pay, on the regular payday, 80% of the loss of earnings to the workers concerned;
• Pay them compensation during the waiting period. The waiting period has been reduced to one day, from 13 March 2020 to 30 September 2020;
• Continue to pay fully the social insurance contributions provided for by the legal and contractual provisions;
• Provide the unemployment fund with all the information required to calculate the compensation.

Steps

The employer must submit the notice of reduced working hours to the competent cantonal authority. The authority competent to deal with the notice is that of the canton in which the company or part of the company concerned is located.

Please do not hesitate to contact us in case you have any questions or need assistance with the above.

David Kohler, Partner
Fabien Gillioz, Partner
Gabriel Raggenbass, Partner
Camille Lopreno, Partner