The virus 2019-nCoV (coronavirus) has a massive impact on everyday life in society and on our economic life. The Swiss government decided on further measures on Friday 13 March and it is possible that more will follow. Below is an overview of what is important for entrepreneurs:

• Labour law issues
• Short-time working compensation
• Insurance and the coronavirus
• Holding general meetings

Labour law issues

Compensation for overtime or holiday entitlement
Due to a lack of orders and consequent overcapacity as a result of the measures taken to contain the virus, it may be attractive for the employer to order the taking of holidays or compensation for overtime.
The employer may determine the timing of the taking of holidays, but must take into account the wishes of the employee. If the employer determines the time of the holiday, a notice period of three months applies. Whether an urgent, economic emergency justifies compulsory holidays at short notice is legally unclear.
Compensation for overtime may not be ordered unilaterally and requires the consent of the employee (Art. 321c para. 2 CO).
Since the legal issue in this exceptional situation is not clear in all respects, it is advisable to make individual agreements with each of the employees.

Remote working
Employees are not allowed to stay away from the workplace due to mere fear of infection. For its part, the employer is obliged to take the necessary measures to protect the health of its employees. Exempt from this are persons with an increased risk (age, previous illness), who have a right to remote working.
Conversely, the employer may order remote working (CO 321d), but must provide the employee with the necessary work tools.

Continued payment of wages
The employer’s obligation to continue to pay wages is regulated in Art. 324a CO and states that there is an obligation to continue to pay wages if the employee is prevented from working through no fault of his or her own and due to the personal circumstances of the employee. The classic cases are accident and illness. In this respect, an employee who is ill with the coronavirus is generally entitled to continued payment of wages.

However, the initial situation changes if the employee negligently contracts the coronavirus, for example by deliberately travelling to a restricted area. In this case, the illness is no longer without fault and the obligation to continue to pay wages is questionable.

The situation also changes in the case of an officially ordered quarantine (cruise ship, restricted area). In this case, the prevention of work is no longer the fault of the employee and the obligation to continue to pay wages no longer applies. If, on the other hand, a quarantine is only ordered for the individual employee, the obligation to continue to pay wages remains.

The situation is more complex for employees who have children. For example, the Cantonal Court of Zurich ruled that there was no obligation to continue to pay wages when a day-care centre had to close due to swine flu. In principle, however, employees are allowed to be absent from work for a maximum of three days to care for their sick child. During these three days, a solution or alternative care must be organised.

Short-time working compensation (KAE)

What is short-time working?
Short-time working means a temporary reduction in contractual working hours, whereby employees receive 80% of the lost wages for the loss of work. Employees, employers and the unemployment insurance fund must share the costs of the loss of work. The employer must pay for two waiting days of lost work per accounting period. After that, the unemployment insurance fund pays 80% of the loss of work and the employees bear the 20% loss of wages.
Employees must agree to the KAE. If an employee refuses, however, he or she is obliged to perform the full amount of work.
The KAE must be notified in advance to the cantonal office in the canton where the employee is based no later than ten days before the start date (in exceptional cases three days in the event of sudden, unforeseeable circumstances – which is the case here with the Federal Council’s decision of 28 February 2020); the office either grants authorisation for short-time working within ten days or rejects the application.

Are all employees entitled to short-time working compensation?
Only wages up to CHF 148,200 are insured. The employer must pay the remaining amount. Persons who have given or received notice of termination or who are already receiving a daily allowance are excluded from the KAE. Owners of legal entities, their partners and all persons who have a significant influence on the company are excluded from the KAE.

The coronavirus and KAE
SECO does not consider the coronavirus to be a normal business risk. Therefore, companies that have work stoppages due to official measures or can demonstrate economic reasons can apply for the KAE. The following situations are conceivable:

• Production slump because components from regions affected by the coronavirus, such as China, or affected companies are no longer available (import);
• Production collapse because products can no longer be delivered to regions affected by the coronavirus, such as China (export);
• Transport of goods collapses;
• Customers stay away for fear of contagion (mainly affects restaurants, leisure and entertainment facilities, travel agencies, passenger transport companies, etc.).

An extraordinary drop in turnover or a decline in orders must already be proven with the pre-registration.

Insurance and the coronavirus
Property insurance does not cover a possible business interruption due to the coronavirus. As a supplement to property insurance, there is epidemic insurance that covers damage due to measures taken by the Swiss authorities:

• Closure or quarantine of establishments or parts of establishments
• Disinfection or destruction of contaminated or suspected contaminated goods
• Individual prohibition of activities for persons working in the establishment
• Closure of supplying or accepting third-party establishments (retroactive damage).

However, there is an exclusion of cover for damage caused by pathogens for which certain pandemic criteria according to the WHO are fulfilled. Likewise, the conclusion of epidemic insurance is currently not possible.

Holding general meetings
The Federal Council and individual cantons have issued guidelines for general meetings. This also affects general assemblies. The form in which general meetings are held in compliance with the official framework conditions is the responsibility of the highest management bodies of the companies.
In the case of cooperatives or GmbH companies, votes may be cast in writing. However, in the case of public limited companies, the physical presence of the shareholder (or their representatives) is required for all resolutions. An electronic general meeting or circular resolution is not permitted according to current doctrine.
According to the Code of Obligations, an ordinary general meeting must be convened within six months of the balance sheet date. However, this is only a regulatory requirement and the current situation justifies a postponement.

If you have any questions or need assistance with any of the individual points, please do not hesitate to contact us.

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