In Switzerland, when a company is facing a temporary economic crisis and needs to scale back its operations, it can apply to the canton for authorisation to implement what is known here as ‘réduction de l’horaire de travail’ (RHT), or ‘Kurzarbeit’ in German. The mechanism works as follows: the company reduces working hours by between 10 per cent and 85 per cent; the state compensates the employee for 80 per cent of the wages corresponding to the lost hours through unemployment insurance; and the employer continues to pay for the hours actually worked. The worker’s income is not reduced to zero. The company does not go bankrupt. And redundancies are avoided, at least for the duration of the crisis.
To make use of this scheme, the employer must apply for authorisation in advance from the cantonal employment service (the ORP in French-speaking Switzerland, the RAV in German-speaking Switzerland). The workers concerned do not need to take any additional steps: the company handles the process. To be eligible as an employee, you must have a permanent contract, have paid unemployment insurance contributions, and not be on a probationary period or on a fixed-term contract of less than twelve months. Short-term contracts and self-employed workers are generally excluded.
What many people only realise later is that, during the short-time working period, the company cannot dismiss employees in order to circumvent the system. And that social security contributions – AVS and LPP – continue to be calculated on the basis of the full salary, not the reduced one. It is a scheme that has existed in Switzerland for decades, but which COVID brought to the fore on a massive scale. If your employer talks about ‘temporarily reducing hours’ without ever mentioning short-time working (RHT), it’s worth asking the cantonal office or a trade union directly. Because sometimes the employer is perfectly aware that it exists and simply doesn’t tell you.