COVID-19 and Employment contracts

Human resources in times of crisis

In many countries, labour laws usually protect employees. In this period of crisis, different kinds of problems arise: some companies face an obligation to stop or reduce their activity, while others need to carry on (or even produce more) in a complex sanitary framework.

How should an employer react when employees cannot go to the office (for sanitary or childcare reason)? Can an employer stop paying an employee if there is a diminution of work? Are there restrictions to redundancy plans during the crisis ?

Our experts give an overview of the financial support measures provided by the governments during the pandemic and of those restricting the possibility to terminate employment contracts.

They also present the leverages offered to employers to adapt working conditions during the emergency period.

Check out the FAQs of the country of your interest and get in touch with our experts for more information.

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Switzerland

I run a business and (a) had to shut it down or (b) have a significant reduction of business due to COVID-19. Is there an alternative to terminating the contracts with the employees?

Yes.

The employer can apply for short-time work for all employees (including cross-border commuters and for himself as self-employed independently of whether its company is organized as a corporation or not) at the Public Employment Agency. However, for persons in an employer-like position, assisting spouses or registered partners and apprentices, the extraordinary entitlement to short-time work ceases at the end of May 2020.

Conditions:

  • The employee has not already reached the retirement age
  • The employment contract has not already been terminated before COVID-19
  • The employee agrees to short-time work
  • The loss of working hours is identifiable
  • The working time is measurable
  • The working time is recorded
  • The loss of working hours is temporary
  • The loss of working hours accounts for at least 10% of the total hours normally worked by the employee
  • The economically induced loss of working hours is due to COVID-19

The short-work system works as follows:

  • The employer applies for short-work at the competent authority
  • The employer must claim for the compensation within 3 months following the end of the month for which its application has been approved
  • The maximum period to be granted short-work for is 12 months within a period of 2 years
  • The compensation is given even if the shortfall of work is > 85% during > 4 months
  • The employer pays the employee 80% of its shortfall of work (with a CAP of CHF 12’350/month) whereby the employer may deduct a 100% of the employee’s social security deductions
  • The employer receives the corresponding compensation from the Public Unemployment Insurance (i.e. 80% of the employee’s salary for the shortfall of work + 100% of the employer’s part of the social securities)
  • The employer may ask for the advance payment of the compensation in order to be able to pay the salary of the employee in time
  • The employer receives the compensation as of day 1 of the month the short-work has been applied for
  • The application is valid for a period of 6 months, ending 31 August 2020
  • The employer has to keep all relevant documentation during a period of 5 years
  • For new applications (i.e. for companies which have not yet applied for short-work during COVID-19) the ordinary pre-registration period of 10 days will apply again 

The forms for the registration of short-time work can be found at:

https://www.arbeit.swiss/secoalv/de/home/menue/unternehmen/versicherungsleistungen/kurzarbeit.html/#-335073858

I hired someone right before COVID-19 broke out, and the person has not yet started to work. Can I take my employment offer back?

Yes.

Swiss law knows the principle of freedom to dismiss. The principle applies anytime, i.e. also before the employee actually starts to work. Namely for economic reasons, the employer is, as a general rule, free to dismiss any employer without consequences. Special attention is to be given to the applicable termination period.

Can I impose my employees to take their remaining days of paid leave?

Yes.

Normally, the employee has to agree to such compensation.

However, based on the employee’s general duty of loyalty, she/he has to agree to compensation when employer’s preponderant interests so require (i.e. for urgent operational needs which were not foreseeable) and no major interests of the employee speak against it.

The employer must not force the employee to take compulsory holidays in excess of her/his holiday entitlement.

How to deal with employees that cannot go to work/provide work from home, because they have to take care of their children?

Are they allowed to stay at home?

The answer depends on the work to be provided by the employee.

The Government has obliged the Cantons to guarantee for the necessary infrastructure for those children < 12 years who cannot be taken care of on a private level. As a consequence, undergraduate schools have remained open and have provided a special care program for those children whose parents have to go to work (e.g. nurses, logisticians, workers in food shops).

Further and for the same reason, the Government has forbidden day-cares to close. Finally, the Government has forbidden that children be taken care of by persons at high risk (namely grand-parents).

Consequently, all those parents who can work from home, are allowed to stay at home, although the Government has only mandatorily imposed home-office for employees belonging to the category of persons at high risk.

Is the employer obliged to continued payment?

Yes.

In order to relieve the employer from the financial losses due to the reduced work capacity, the employer is allowed to apply short-work for the parent-employee.

Subsidiarily, the parent-employee qualifies for a COVID-19 daily allowance as of the forth day off work due to having to take care of her/his children < 12 years.

The employer has to come up for the first three days off work which corresponds to the ordinary period for which the employer is obliged to continued payment in case a parent-employee stays home to care for sick children.

What should I do if there is still some business to do?

Although the Government has been recommending home-office for all employees to the extent possible, home-office has not been mandatory

Consequently, as long as the employer ensures for the official protective measures with regard to hygiene and social distancing at the workplace (see sector-specific COVID-19 hygiene and social distancing concepts elaborated by the corresponding associations), employees have the duty to go to work. The employer shall, however, make the working hours of employees using public transportation as flexible as possible in order to avoid rush hours in public transport.

Do I have the right to terminate employment contracts during the state of emergency?

Yes.

However, special attention is to be given to employees belonging to the category of persons at high risk where neither work at the workplace nor from home is feasible. The court might (a) apply the protective blocking period (30 days in the first year of service, 60 days in the second until the fifth year and 180 days from thereon) applicable in case of illness and consider the termination expressed within this period to be void, or (b) consider the termination expressed after expiration of such period to be abusive (unlawful termination based on personal characteristic “age” and/or “disease”) with a compensation of up to 6 months salary. The abusiveness would probably be denied in case termination was unavoidable for economic reasons. An alternative could be to apply for short-time work.