Effects of COVID-19 on the recruitment and onboarding of new employees

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The current COVID-19 crisis has a dramatic impact on all aspects of the Swiss economy. Many fields of business have come to complete halt (e.g. restaurants, bars, cinemas etc.) or are facing a rapid decline in demand and/or revenues (e.g. fashion enterprises, hotels etc.). The crisis does not only affect the existing workforce of affected businesses but also their recruitment. Therefore, a selection of questions shall be discussed below regarding the following topics:

  • Impacts on recruitment processes
  • Short-time work allowance
  • Termination prior to start of employment and impacts on the probation period
  • Home office

A) Impacts of COVID-19 on recruitment processes

We are a company active in a sector with a national unemployment rate of at least 5%. Do we still need to fulfill the job registration requirement (Stellenmeldepflicht)?

No. Since 1 January 2020, employers have been legally required to register vacancies in occupations where the national unemployment rate is at least 5% with the regional employment centre (RAV). However, the job registration requirement was suspended by the Federal Council through the ‘COVID-19 Job Registration Requirement Ordinance’ with effect from 26 March 2020 for six months.

We employ foreign citizens and cross-border commuters. Furthermore, we are planning to hire foreign citizens domiciled abroad for positions in Switzerland. How are we affected by the current legislation?

In connection with the COVID-19 epidemic, the Federal Council has decided to impose far-reaching restrictions on immigration. In principle, foreigners (EU/EFTA citizens as well as third country nationals) who do not hold a valid residence or work permit will only be allowed to enter Switzerland in order to work if there is an overriding public interest in them doing so (e.g. workers active in the supply of essential goods, health care, agriculture, information technology and scientific research). These workers may be issued with a residence permit or provided with an assurance that a permit will be issued allowing them to enter Switzerland.

However, as the measures taken in connection with the COVID-19 pandemic are currently gradually eased by the Federal Council, the following exceptions from the abovementioned apply:

a) Applications for residence or cross-border commuter permits for workers from EU/EFTA states will be processed by the cantonal authorities even if there is no overriding public interest, if the application for a residence or cross-border commuter permit was filed before entry restrictions were introduced, i.e. before 25 March 2020, or contract of employment with an employer in Switzerland was concluded before 25 March 2020.

b) Third country nationals who already have a permit to work but who have not been issued with a visa because of the entry restrictions will now be allowed to enter Switzerland. They or their employer should contact the responsible cantonal migration authorities in order to update their authorisation to enter Switzerland. Furthermore, applications for authorisation to employ persons from third countries that were filed before the restrictions entered into force on 18 March 2020 will now be processed. They will be approved provided the requirements of the Foreign Nationals and Integration Act are met and the person concerned is actually able to begin the job. Other applications for work permits submitted after 18 March 2020 for third country nationals currently not residing in Switzerland will not be processed at the moment.

B) Short-time work allowance

Our company has applied for short-time work allowance with regard to our current workforce. However, before the crisis we hired new employees, starting soon. Are they entitled to short-time work allowance?

Employees are entitled to a short-time work allowance from the first day they take up an activity subject to Swiss unemployment insurance contributions, provided they meet the general conditions for said allowance (please refer to our article on short-time work regarding general conditions).

We hired a new employee with domicile abroad, holding a cross-border permit (G-Permit). The employee is intended to take up his job soon. Is the new employee entitled to a short-time work allowance despite being a cross-border commuter?

Foreign workers with a place of work in Switzerland are also entitled to the allowance regardless of their place of residence and residence status, as long as they are subject to the Swiss social security system. Cross-border workers, for example, are entitled to a short-time work allowance from the first day they take up an activity subject to Swiss unemployment insurance contributions, provided they meet the general conditions (please refer to our article on short-time work regarding general conditions).

Our company has applied for short-time work allowance with regard to our current workforce. We now received a very strong application from a candidate and would like to hire her/him. Is she/he entitled to short-time work allowance?

If new employees are newly hired in a period where is foreseeable that they cannot yet work due to the COVID-19 situation, such employees will generally not be entitled to short-time work allowances. In such a case, the primary cause for the reduced working hours of such employee is not COVID-19, but the voluntary hiring of new employees despite the current economic circumstances. Therefore, such new hires are at the employer’s risk.

C) Termination prior to start of employment and impacts on the probation period

We hired a new employee, starting on 1 May 2020. However, our business had to close due to the current situation and we cannot occupy the employee anymore. Is it possible to terminate the employment contract prior to the start of employment?

In principle, a notice of termination is admissible even before the contractually agreed starting date, i.e., before the employee started to work. The prevailing opinion is that the applicable notice period during the probation time should apply. This is usually, unless the parties agreed otherwise, a period of seven days.

In our view, the notice period starts upon receipt of the notice of termination, i.e., already before the actual employment commences. Therefore, no salary will be due in case the notice period expires prior to the first day of work. Please note, however, that this view has not yet been confirmed by the Swiss Supreme Court. Parts of the legal doctrine argue that the notice period starts at the first day of work only, so that the employer owes the salary for the duration of the notice period (which, as mentioned, is shorter during the probation period).

If, exceptionally, the application of a notice period is explicitly excluded in an employment agreement, it is still possible to terminate the agreement already prior to the first day of work. In such case, however, the contractually agreed notice period or, in the absence thereof, the statutory notice period (one month in the first year of service) applies. Moreover, in the absence of a probation period, the proscribed periods set forth in art. 336c CO apply, meaning that no notice of termination is possible during an incapability to work due to sickness or accident, a pregnancy, a period of 16 weeks after giving birth or military and civil protection service.

We hired a new employee. A probation period of three months is foreseen in the employment contract. At the moment, our business is closed and we cannot assess the employee’s work and behaviour. Will the probation period be extended?

According to art. 335b para 3 CO, the period that would normally constitute the probation period will be extended if it is interrupted by illness, accident or performance of a non-voluntary legal obligation (e.g. military or civil service). The grounds listed in paragraph 3 are exhaustive. Therefore, the probation period will not be extended.

A probation period of three months is foreseen in the employment contract of a new employee. After two weeks the employee fell ill and was tested positive for COVID-19. The employee was on sick leave for two weeks. Will the probation time be extended?

Yes, see above. If the probation time is interrupted by illness, it will be extended accordingly, i.e. two weeks.

We hired a new employee that is supposed to take up his work in a week. Due to the crisis, we are not going to be able to provide the employee with work. Is it possible to change the starting date of her/his employment contract?

Unilateral changes to an employment contract are generally not admissible under Swiss law. However, both contractual parties are free to mutually change their contractual relationship any time. Therefore, the employer in this situation would need to reach out to the employee and negotiate a new starting date. However, postponing the start date would also postpone the employee’s possible entitlement to short-time work allowances.

D) Home office

Our field of business does not allow our employees to work from home. However, we comply with the federal recommendations on hygiene and social distancing at work. A new employee contacted us and told us that he/she suffers from an underlying medical condition. This condition would normally not affect his/her ability to work but makes him/her part of a high-risk group with regard to COVID-19. The employee therefore refuses take up his/her work. Can he/she be obliged to come to work?

In general, the COVID-19-Ordinance-2 stipulates the duty of employers to let persons at high risk work from home. If this is not possible because of the nature of the work or the absence of feasible measures employers are obliged to take appropriate organisational and technical measures to ensure compliance with the federal recommendations on hygiene and social distancing. If compliance with these recommendations is not possible, the employer has to grant the employee leave and continue to pay the salary.

Thus, the employee can be obliged to come to his/her customary place of work as long as the company complies with the federal rules on hygiene and social distancing. If he/she refuses to do so that could in theory allow the employer to terminate the employment contract with immediate effect. However, the specific circumstances would have to be analysed carefully in this regard. In most cases, a prior warning will be necessary.

We hired a new employee and contractually agreed on our office to be the customary place of work. Can we still order the employee to work from home? In particular, would that be possible from the very first day?

Yes, this is possible. Even though an employer cannot unilaterally change or adapt an employment contract, he is entitled to issue general directives and specific instructions regarding the performance of the work and the conduct of employees in his business. Furthermore, the employer is obliged to protect the employee’s personality rights. In particular, an employer must have due regard for the employee’s health. The recommendations of the Federal Office of Public Health FOPH are clear in this regard: whoever is able to work from home should do so during this pandemic.

In principle, tools and materials required to work from home must be made available by the employer (see also here).

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