Switzerland Update: Closed for the holidays

If an employer wants to close their business over Christmas/New Year (or between other holidays), this must be planned well in advance from an employment law perspective. The employer must order the vacations to be taken or, under certain circumstances, the overtime compensation in good time or agree with the employees on so-called pre-work or catch-up times. Otherwise, there is a risk that the employer will have to occupy the employees during the business vacation or ultimately – in the spirit of Christmas – gift them these days.

Holidays

Swiss Federal law only recognizes August 1 (Swiss National Day) as a legal holiday, treated as equivalent to a Sunday. In addition, the cantons may designate up to eight other public holidays per year as equivalent to Sundays, which all cantons have done for Christmas Day (25 December) and New Year’s Day (1 January). In most cantons, St. Stephen’s Day (26 December) and Berchtold’s Day (2 January) are also considered cantonal holidays.

For August 1, the legislature has established a wage payment obligation. For the other cantonal holidays, the monthly or weekly wage is usually not reduced and the holidays are therefore fully compensated. Employees on hourly wages, on the other hand, are only entitled to compensation for cantonal holidays if this is expressly provided for in their employment contract and/or a standard or collective employment contract. If this is the case, the public holidays (as opposed to vacation time) can be compensated with the hourly wage.

These holidays are therefore work-free and usually paid. From a legal point of view, however, they are not comparable to vacations. Thus, there is no entitlement to their being granted at a later date if they do not fall within the normal working hours (e.g. if they fall on a Sunday) or if employees cannot take them due to illness. However, public holidays that occur during vacation time do not count as vacation days.

Vacation or overtime arrangements

The employer may, in principle, unilaterally determine the vacation dates. In doing so, they must take into account the wishes of the employees to the extent that this is compatible with the interests of the business. The employer is therefore also free to arrange for at least a reasonable amount of vacation time to be taken over Christmas/New Year.

In principle, this decision must be announced about three months before the planned business vacation. If the employer fails to do so, the employees are entitled to refuse to use their vacation entitlement (so-called right of objection). If the employees do not exercise this right of objection immediately, however, it is assumed that they agree to the vacation arrangements. It should be noted that the exercise of the right of objection requires both a statement of reasons and the offer to work those days. Furthermore, the ordering of the vacation is no longer possible if the employees have already taken all their vacations for the corresponding year with the consent of the employer (the employer cannot order the employees to utilize the next year’s vacation allowance in advance). In this case, the employer must occupy the employees during the business vacation or ‘gift’ them the desired days off between Christmas and New Year’s Day (no wage deduction is permitted for these days).

The only exception is when, for example, an internal regulation makes it clear that the business vacation occurs at the same time every year. In this case, a new vacation arrangement is not required each year and employees are generally obliged to ensure that they still have a sufficient number of vacation days for the business vacation at the end of the year.

If the employer is unable or unwilling to order employees to utilize their vacation entitlement for a (one-off) business vacation, or if the employees no longer have enough vacation days for the business vacation, any overtime can also be offset during this time. Unless otherwise agreed in the contract, however, the offsetting of overtime always requires the consent of both the employer and the respective employee. If the employer is entitled to unilaterally order the offsetting of overtime on the basis of a contractual agreement, this decision can be made at relatively short notice – in contrast to a vacation decision.

In the event of illness or accident during the vacation or offset period, employees are entitled to make up for these vacation days or offset time, provided that the inability to work has demonstrably impaired the recreational value of the vacation. This is usually the case if the employee is bedridden or requires regular visits the doctor, but not if he or she has a simple cold.  

Pre-work or catch-up times

A distinction must be made between overtime and the so-called pre-work or catch-up working hours. Pre-work or catch-up working hours are an agreed change in working hours, e.g. by extending the daily or weekly working hours. Thus, the days off due to the temporary closure of the business can be compensated for without the need to take vacation time (or to offset overtime) during these days.  

The time worked in advance (pre-work) is not remunerated at the time it is performed, but on the pre-earned holiday. For that day, employees receive the usual wage. Employees who fall ill on days when they have to perform this work in advance must still be credited for this time. It is controversial whether employees are entitled to a wage if they fall ill on the days for which they have worked in advance (additional holidays/bridge days). If the employment relationship ends before the employees are able to take the days that have been worked for in advance, they are in any case entitled to payment for these days. Since the credit additional working hours are altered working hours – and not overtime – they are not entitled to an overtime bonus on this payment.

Summary for the employer

In any case, business vacations must be planned in good time or anchored in a set of regulations. If employers have not done so, the only option at this stage is to agree with employees on vacation or the setting off of overtime for the temporary closure of the business over Christmas and New Year or to unilaterally order and offsetting of overtime if this is provided for in the employments contracts.

If employees fall ill or have an accident during the business vacation, the question of whether or not to grant them additional days off is based on any lack of a recreational benefit on the one hand and the qualification of the sick days on the other. Only in the event of loss of recreational benefit of holidays or offset overtime (but not on cantonal holidays) due to the employees’ situation meaning they would have been unable to work are employees entitled to make up for these days.

By Marc Ph. Prinz & Jeannine Simone Dehmelt, Vischer, Switzerland, a Transatlantic Law International Affiliated Firm.

For further information or for any assistance please contact switzerland@transatlanticlaw.com

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