New developments in short-time work compensation

Historic court ruling
At the beginning of the Covid 19 pandemic, the summary settlement procedure for reduced work allowance was introduced by emergency legislation in order to ensure the prompt payment of the required allowance and thus the liquidity of companies, reducing the administrative burden on companies and unemployment insurance funds.

The Lucerne Unemployment Insurance Fund has demanded the return of overpaid short-time work allowances from a restaurant manager, on the grounds that vacation or vacation pay should not have been paid to monthly-wage employees during the validity of the summary procedure. This is despite the fact that vacation and vacation compensation for monthly-wage employees is certainly taken into account in the normal procedure. In the subsequent appellate decision, the unemployment fund continued its approach. After the restaurateur's appeal to the Lucerne Cantonal Court was upheld, the decision was sent back to the unemployment office to correct the calculation method.

The unemployment insurance fund appealed to the Federal Supreme Court and asked that the decision be overturned. In its appeal, the unemployment fund argued that the cantonal court violated federal law by dismissing and recalculating the case. This was because it violated Covid Ordinance 19 on unemployment insurance. The Federal Court concluded that the Lucerne Cantonal Court, as a lower court, was right and that in the case of employees with monthly wages, the unemployment insurance fund also had to take into account vacation and rest day allowances when calculating short-time work allowance in the summary procedure. The decisive factor for this ruling was that there was insufficient regulation at the legislative or ordinance level for the deviation of the summary procedure from the normal procedure. The resulting unequal treatment was not intended by the legislature and cannot be inferred from the Covid 19 unemployment insurance ordinance.

Consequences for companies
Based on the November 17, 2021 ruling of the Federal Court (BGE 8C_272/2021), the Federal Council decided on March 11, 2022 that short unemployment benefits settled in summary proceedings in 2020 and 2021 must be reviewed by unemployment insurance funds upon request. Companies must submit an application with a detailed schedule for each pay period for the calculation of additional vacation and vacation pay for employees with monthly wages. SECO will provide a technical solution to support applicants and unemployment insurance funds in processing applications. This solution is currently under development and is expected to be available during summer 2022. Current information for companies is available on the websitehttps://www.arbeit.swiss/secoalv/de/home/menue/unternehmen/versicherungs....

Also of note
A large proportion of affected companies simultaneously claimed Covid credits or hardship offsets. Due to the subsequent payment of short-time work allowance, these claims may be reduced and consequently must be refunded. Companies should take this into account when deciding whether to apply for short-time allowance reconsideration.

In breve

1. In its ruling (BGE 8C_272/2021, Nov. 17, 2021), the Federal Supreme Court ruled that vacations and public holidays must also be taken into account when calculating compensation for short work in summary proceedings.
2. According to the Federal Court ruling, affected companies can have their short-time work compensation reviewed by unemployment insurance funds.
3. Before submitting an application, companies should check whether any Covid credits or hardship payments received can be reduced or claimed.

Source:EXPERTsuisse KMU Practical Information 02/2022