Short-time working compensation – claiming for paid leave and public holidays

Legal uncertainty and required action

We wish to inform you of a new development in connection with claiming short-time working compensation. Many Swiss companies are affected by the change. You may therefore need to take urgent action in this regard.

What has happened?

On 26 February 2021, the Cantonal Court of Lucerne ruled that the current regulations for short-time working compensation under the summary procedure violate the applicable law. In its ruling, the Lucerne Cantonal Court concluded that paid leave and public holidays are legally prescribed remuneration components, which means they cannot be ignored in the calculation of short-time working compensation. However, the judgment is not yet definitive. SECO (State Secretariat for Economic Affairs) has decided to refer the case to the Federal Supreme Court. A decision by the Federal Supreme Court is not expected before the end of this year.

What does this mean for you?

If your company has claimed short-time working compensation for employees who are paid a monthly salary, this court ruling may be very significant for you, as you may be entitled by law to additional compensation of up to 13.48% of the short-time working compensation.

Why might I be able to claim for additional short-time working compensation?

The legal regulations that previously applied (before the start of the coronavirus crisis) for short-time working (Art. 31 et seq. Unemployment Insurance Act, UIA) stipulated that the entitlement to paid leave and any contractually agreed regular allowances must also be taken into account (Art. 34 para. 2 UIA). However, as part of the summary procedure initiated last year, SECO stated that the hours for paid leave and public holidays of employees who are paid a monthly salary should not be considered in the calculation of short-time working compensation.

What now?

We must now wait to see how the Federal Supreme Court will rule or what solution the social partners will agree on. For legal reasons, we therefore recommend that you take certain preparatory measures right away. This will help to ensure that any legal entitlement to this additional short-time working compensation is not lost.

• Future claims: The unemployment insurance funds have been instructed to continue applying the existing rules, under which no additional compensation will be paid. This means that rulings must also be requested and appeals lodged every month for future claims. We recommend that you include a note of the corresponding entitlement with each claim. However, you are advised to not yet include paid leave and public holidays in the calculations for any claims that you submit, as these are not likely to be accepted. As soon as the claim has been received, an appealable ruling must be requested and an appeal lodged.
• Retroactive claims: The corresponding measures must be chosen depending on the specific circumstances (request to restore claim periods, retroactive claim for paid leave and public holidays, request for an appealable ruling or for reconsideration of an existing ruling). All measures must be combined with a suspension request until the Federal Supreme Court has ruled on the matter.

Important: If, contrary to expectations, the proceedings are not suspended by the unemployment insurance funds, it is essential that the ruling is appealed on time, so that it does not become legally binding.

Please do not hesitate to contact us directly if you have any questions. Our customer advisers will be pleased to assist you.