The coronavirus (COVID-19) is currently causing concern and uncertainty and poses challenges to companies and individuals alike. A number of legal issues are also emerging. This article aims to highlight the most important points from a Swiss employment law perspective and to clarify legal issues in the elaboration of possible courses of action.
- Duty of care
Is there an obligation for employers to take measures in order to protect employees?
According to statutory law, the employer is obliged to protect the employees’ health and introduce the necessary and appropriate measures. In case of an outbreak of an epidemic or pandemic, there are increased duties of information, loyalty and care in order to maintain the business going (e.g. information about outbreaks of illness, absence from work).
In case of a pandemic, the employer must provide information on the recommended conduct, such as the rules of conduct and hygiene published by the Federal Office of Public Health (FOPH). There is no definition or regulation on what sufficient protective measures are, as they differ in each case (e.g. for office workers it might be sufficient to have individual office spaces, whereas for sales personnel with close contact to customers further protection must be provided). If one employee is infected with the coronavirus, the employer must make sure the virus does not spread in the office. The employee should be quarantined and not allowed to return to the workplace until the risk of contagion no longer exists.
Measures taken by the employer must be proportionate and protect the employees’ personality rights. For example, travel restrictions should not go further than necessary (e.g. no country limitations for personal holidays).
Are employers allowed to order mandatory temperature measuring and tracking in order to prevent infections?
As far as employers process personal data, it must be carried out in compliance with the Swiss Data Protection Act, even if such processing serves to protect individuals against the pandemic. In particular, health data (such as body temperature or data on flu symptoms) are particularly worthy of protection and may generally not be obtained against the will of data subjects (e.g. employees, customers or visitors). Furthermore, the processing must be necessary and suitable with a view to prevent further infections. It may not go beyond what is necessary to achieve this goal. Finally, employees, customers and visitors have to be sufficiently informed about the processing of their health data, in order for them to understand the purpose and scope of the processing, as well as its content and time frame.
Insofar as you intend to collect body temperature or data on flu symptoms of people entering buildings or workplaces, we recommend to do the following:
- When collecting these data, the self-determination of the persons concerned must be respected. If possible, the data on flu symptoms should be collected and passed on by the individuals themselves. Extensive questions about the state of health have to be avoided, especially when asked by non-medical staff.
- Limit the data processing to the minimum necessary to prevent further infections. If possible, erase the data immediately after collection. In case the data is still necessary in connection with operational and organizational measures, delete such data at the latest when the pandemic threat has ceased to exist.
- Make sure that you sufficiently inform the employees and visitors about the data processed and the purpose, scope and time frame of such processing.
Can employees be assigned with different work and/or different place of work due to the coronavirus?
In case an employee works in a special field or department (e.g. sales), the question could arise whether the employer can order the employee to work in another area (e.g. warehouse) due to the lack or increased need of workforce. The temporary assignment of different work should be permissible based on the employee’s duty of loyalty and the employers right to give instructions especially in extraordinary circumstances, such as the spread of the coronavirus. Unreasonable work, however, can be turned down. The same applies to the place of work, i.e. in the event of an urgent interest of the company, based on the employee’s duty of loyalty the employee can be assigned a different place of work within the bounds of reasonableness.
Can employees be ordered to work from home?
Employers have to protect the health of their employees. Therefore, the recommendations published by the Federal Office of Public Health should be followed. Special attention has to be paid to employees who are part of the risk group, i.e. people aged 65 years or older as well as people suffering from medical conditions, such as high blood pressure, diabetes, cardiovascular diseases, chronic respiratory diseases, illnesses and therapies that weaken the immune system or cancer. Employees must notify their employer of such medical conditions.
All employees – even those who do not belong to a risk group – should be ordered to work from home if possible. Such order is permitted by the employer’s right to issue instructions, especially if it is a temporary order due to the coronavirus pandemic. Should the work not permit (e.g. medical staff, sales personnel), employers have to make sure their employees do not have to travel by public transportation during rush hour on their way to the office.
According to the Ordinance introduced by the Federal Council (version of 21 March 2020), employees who belong to a risk group have the right to be working from home whenever possible. The employer takes the necessary measures to make home office work possible. Should home office work not be possible due to the nature of the work, the employer has to take the necessary measures so that the recommendations published by the Federal Office of Public Health can be followed. If the employer cannot guarantee these essential hygiene and distance requirements, the respective employees have to go on holiday with continued payment of salary.
Employees, in principle, cannot introduce home office work without the employer's consent. As an exception, if the employer disregards the most elementary health precautions, the employee could refuse to come to work and still be entitled to salary.
Who has to bear the costs of home office work?
Generally, the employer provides the employees with the necessary equipment. Only where otherwise agreed in the employment contract, the employees have to bear these costs.
If home office is introduced, the necessary expenses (e.g. additional telephone costs) must always be reimbursed. These cannot be passed on to the employee. However, this only applies to necessary expenses incurred. Expenses are, for example, not considered necessary if the employee decides for him- or herself to work from home but would have a workplace available where these costs would be covered by the employer.
To what extent may employers monitor employees who work from home?
Generally, the employee’s personality rights have to be respected and all measures taken by the employer have to comply with the relevant data protection provisions. In any case, systematic monitoring by the employer is not allowed.
The employee is also obliged to record the working time in the home office. Since direct control in the home office by the employer is difficult or even impossible, the employee must be informed about the mandatory regulations (prohibition of night work and Sunday work) and be contractually obliged to comply with them. For this purpose, it is recommended to summarize the necessary regulations in a set of rules.
What happens if employees fail to comply with introduced measures?
Provided that the employers’ instructions are necessary and appropriate, an employee’s failure to comply with the instructions can lead to disciplinary measures or in serious cases to the termination of the employment relationship.
- Termination of employment
Can employment contracts be terminated for economic reasons?
In general, the principle of freedom of dismissal applies. Consequently, regular terminations of employment contracts do not require specific reasons and can be based on economic grounds. The termination cannot be given, however, during a blocking period (e.g. if the employee is sick, pregnant, has had an accident or must carry out military service) or in case of fixed-term employment contracts. A termination must not be qualified as abusive. This has to be checked on a case-by-case basis, but could, for example, be the case should the employer attempt to enforce unfair salaries or working conditions by giving a termination with an option of altered conditions of employment (Änderungskündigung).
Could the termination of an employment agreement by the employer due to the fact that an employee wants to work from home as a precautionary measure be qualified as an abusive termination?
If an employee who is able to fulfil his work obligations from home decides to start with home office because of the coronavirus pandemic and lack of protective measures taken by the employer, the employer’s termination of the employment relationship would likely qualify as an abusive termination, which would give rise to compensation claims.
- Continued obligation to pay salary
Does the employer have to pay salaries if an employee is sick with the coronavirus?
According to a general principle of Swiss labour law, there is “no salary without work”. However, if an employee is unable to work due to an infection with the coronavirus, he or she is usually still entitled to continued payment of salary.
As an exception, it could be argued that no salary is owed if the employee has become infected with the coronavirus through his or her own fault by travelling to an affected area despite contrary instructions by the competent government authority or his/her employer. However, in the meantime the coronavirus spread almost all over the world, therefore it is unlikely that the employee is assumed to be at fault.
The employee cannot come to work because daycare centers or schools are closed and he or she has to take care of his or her children.
a) Is the employee entitled to a salary if the children are suffering from coronavirus?
According to Art. 36 para 3 of the Labour Act, the employer is obliged to give the employee the necessary time off to take care of a sick child. This also applies in the case of a coronavirus infected child. However, the above-mentioned statute only requires the employer to give his or her employee three days off in cases where a child is sick. The purpose of that time period is for the employee to find an alternative, e.g. a relative that could take care of the sick child. During that time the employer has to pay the employee his or her full salary. If the employee has already benefitted from the full period of time he or she was entitled to continued salary payments (see below), no salary is owed.
However, regarding the current coronavirus pandemic, it is highly likely that courts would find the above-mentioned statutory time off to be too short. In cases where a sick child needs care, more often than not it is the child’s grandparents who look after it. But as these are currently targeted the most by the coronavirus, they cannot be relied upon to take over the task. Employers should therefore consider giving an employee a longer period of time off to arrange for his or her child’s care.
b) Is the employee entitled to a salary if the children are not suffering from coronavirus?
During the swine flu epidemic in 2009, the Zurich Labour Court ruled that employees are not entitled to continued payment of wages, if they have to take care of a healthy child because of a closed daycare center. The reason for that was – according to the court’s opinion – that it was not the employee’s personal circumstances that prevented her from work, but an epidemic-like situation which was out of the employee’s control.
There are, however, other opinions. Parents have a legal obligation to look after their children if school or daycare is cancelled. This, in turn, would result in a claim to continued payment of wages for a limited period of time as far as the employee has not already benefitted from the full period of time he or she was entitled to continued salary payments (see below).
Therefore, it cannot be completely ruled out that a court would find that the employer is obliged to continue to pay wages due to the coronavirus situation. There is in any case a time limit on the obligation to continue to pay wages (see below) and only for as long as the inability to work is justified.
Also, if the employee actually works at home (home office) salaries are owed to the full extent, even if the performance of the employees is somewhat limited due to the presence of his or her children.
c) Are there any measures taken by the Federal Council with regard to employees who have to reduce their working hours in order to take care of their children?
Yes, on 20 March 2020, the Federal Council introduced a measure that provides for an entitlement to compensation of parents who have to look after their children because school is closed. They are also entitled to compensations in the event of a quarantine ordered by a doctor (see also below). The compensation is paid as daily allowance in the amount of 80% of the employee’s salary up to a maximum of CHF 196 per day. At this point, the detailed modalities of the compensation are still unclear.
The employee is subject to a quarantine ordered by the authorities and therefore cannot appear for work. Is the salary owed?
The employer’s obligation to pay salary depends on whether the employee’s inability to work is caused by the employee or not. In case an employee is placed in quarantine by Swiss or foreign authorities and cannot work remotely, the employer’s obligation to pay the salary continues.
However, if an employee has travelled to an affected area – against the FDA’s recommendations and on a voluntary basis – the situation might be different. Then the employee could be held responsible for his or her placement in the quarantine and the employer might refuse to pay the salary for the time spent in quarantine.
The employee cannot return from vacation due to official measures (such as the closing of borders or of the airport). Is the salary owed?
The same applies as for quarantines ordered by authorities (see above). The employer generally has to pay salary, unless the employee has travelled to an affected area against clear recommendations.
The employee is afraid of contagion and therefore does not come to work. Is the salary owed?
As long as there is no official order from the authorities, the employee’s refusal to go to work is qualified as unfounded and therefore no salary is owed. If the refusal continues, the employer may terminate the employment contract without notice.
The case is different for employees belonging to a risk group: Since the introduction of the updated Ordinance of the Federal Council on 16 March 2020, these employees must have the right to work from home and may refuse to come to work. If home office is not possible for the work in question and the employee consequently goes on paid leave, the salary is owed.
Public transportation is restricted as an official measure. The employee can therefore no longer appear at work. Is the salary owed?
If an employee cannot appear at work on time or not at all due to restrictions of public transportation, he or she is excused. In this case, however, the employer is not obliged to continue to pay salaries. If the work can be carried out by the employee from home, he or she may work from home. In such case, the salary entitlement remains intact.
The employee may also have to take an earlier bus or train, if possible, to get to work on time. The restrictions on public transport do not excuse the employee from working less than the contractual working hours. The principle that commuting to work does not count as working time still applies.
How long does the salary payment obligation continue?
In general, employers have a sickness insurance in place and the duration of the payments under the sickness insurance are governed by the insurance contract. If there is no daily allowance insurance, the duration of the continued payment of salaries is based on statutory law and the scales applied by the courts (Bernese, Basel, Zurich scale). These define the duration of the continued payment of salaries based on the number of years the employee has worked for the employer and usually range from three weeks (in the first year of service) to up to 31 weeks (if the employee has 25 or more years of service).
- Lack of work
Can employers force employees to go on holiday due to the coronavirus?
In principle, the employer determines the time of the holiday, although he has to take the employees' wishes into account, provided that these are compatible with the company's interests. If the employer determines the time of the holiday, he must give advance notice to the employees within a reasonable time frame, which is around three months. However, if the existence of the business is endangered, the employer’s interests may prevail. Then, employees might be forced to take holiday without respecting the period of approximately three months. In any case, forcing an employee to go into a negative vacation entitlement is not permissible.
A company reduces employees’ working hours or closes down completely. Is the salary owed?
If the reasons for reduced working hours or a business shutdown falls within the risk sphere of the employer, the full salary has to be paid (see art 324 CO). The business risk includes, in principle, economical and technical risks as well as governmental measures. With regard to the coronavirus outbreak, the Swiss State Secretariat for Economic Affairs (SECO) considers that employees are, in principle, entitled to continued payment of their salary since it is the employer that bears the commercial and operational risk. Based on the employees’ duty of loyalty the employees may be required to, at least to a certain extent, make up for the “missed” hours without additional remuneration. Furthermore, in order to mitigate the economic consequences, the company may consider applying for short-time work (see below).
- Short-time work
What role do short-time work and short-time work compensation play in the coronavirus pandemic?
By introducing short-time work, the normal working hours are temporarily reduced due to economic difficulties or operational disruptions. The employment contracts remain in force even if the work is discontinued. The aim is to secure the existence of the company and to preserve jobs. Salaries are reduced in proportion to the working hours. To protect the employee, unemployment insurances can cover a percentage of the loss of wages (see below). Since wage reductions are a deviation from the employment contract, the employee can refuse the contract change and demand full pay of salary instead.
The affected companies can apply for short-time work with the cantonal employment office. If the requirements are met, an application for compensation for short-time work can be submitted to the unemployment insurance fund once the cantonal employment office has given its approval. On 20 March 2020, the Federal Council promised CHF 42 billion for short-time work compensation and other emergency economic aid.
The Federal Council further expanded and simplified the application of short-time work. Namely, also temporary employees and apprentices can benefit from short-time work compensation. Also, employers who are similar to employees shall be included, such as quotaholders of a limited liability company who work as employees for the company against payment. Further, employees no longer have to reduce their overtime before they can benefit from short-time work compensation.
What are the requirements for the approval of short-time work compensation?
If an employer intends to claim compensation for short-time work on behalf of his employees, he must notify the cantonal employment office in writing at least ten (or as an exception three) days before the start of short-time work. Thus, short-time work normally comes into effect ten (or exceptionally three) days after notification. This deadline for advance notification has been cancelled by the Federal Council. In addition, employers must usually pay two waiting days during the first six payroll periods (a payroll period is usually one month) and three waiting days from the seventh payroll period. This waiting period has been abolished too.
The approval of short-time work compensation is valid for six months (the statutory duration of three months has been extended by the Federal Council) and granted if the loss of working hours is either (i) due to unavoidable economic reasons or (ii) due to official measures that the employer cannot avoid and for whose damage he cannot hold a third party (in particular insurance companies) liable. According to SECO, the coronavirus and its effects are not an ordinary business risk. It is to be assumed that absences from work caused by official measures (such as the Federal Council's ban on gatherings) give rise to a claim to compensation for short-time work. Furthermore, economic reasons that lead to loss of working hours (e.g. decrease in demand or production/sales decline due to delivery difficulties) may justify short-time work compensation.
Difficulties are posed by the distinction between work absences, which are part of the employer's ordinary business risk and must be borne by the employer, and the unavoidable economic reasons that justify short-time work compensation. If a company is closed down because the employer can no longer guarantee safety or proper production in the company, there is likely to be an entitlement to compensation for short-time work. However, if a business is closed for precautionary reasons only, the employer might be in default (see above).
What amount of the salary is covered by the short-time work compensation and how long will the compensation be paid?
If the short-time work compensation is granted, the employee receives 80% of the insured salary from the unemployment insurance fund. The insured salary corresponds to the latest received salary before the short-time work (maximum CHF 12,350/month or CHF 148,200/year). There is no grace period, during which the employer would have to pay the costs of the short-time work compensation, as the Federal Council introduced on 20 March 2020.
Short-time work compensation will be paid for a maximum of 12 accounting periods (of usually 1 month) within 2 years aligned. The Federal Council can prolong the maximum period up to 18 months in case of continuing unemployment. A monthly work loss of more than 85% can only be credited during a maximum of 4 accounting periods.
What other support measures were introduced by the Federal Council?
On 20 March 2020, the Federal Council ordered additional measures to mitigate the consequences of the coronavirus pandemic.
Liquidity support will be offered by providing SMEs affected by the financial consequences of the coronavirus with the possibility to obtain bridging loans quickly and easily. Bridging loans are possible in the amount of up to 10% of the company’s turnover or a maximum of CHF 20 million. Amounts of up to 0.5 million can be paid out immediately by the banks and benefit from a 100% guarantee by the Confederation.
Further, affected companies can be granted a temporary, interest-free deferral of social security contribution payments.
As for tax payments, the payment period can also be extended. The interest rate for value-added tax, customs duties, special excise taxes and incentive taxes will be lowered to 0.0% for the period from 21 March to 31 December 2020. The same applies to direct federal taxes.
Additionally, debt collection and insolvency proceedings will be suspended from 19 March up to and including 4 April 2020.