Coronavirus - Home Office and Compensation for Rental Costs
In a Swiss Federal Supreme Court decision already published in April 2019 (4A_533/2018) compensation for home office was discussed. In the media, this decision gained a lot of attention because employers recommended or ordered that their employees work from home.
The Swiss Federal Supreme Court clarified that rental costs must be partly covered by the employer in case an employee is forced to work from home. Such compensation is subject to the requirement that the employer does not provide the employees with a permanent suitable workplace, i.e. the employees must use their home office. On the other hand, employees whose employers provide a physical office but who work from home on a voluntary basis are not entitled to compensation.
B. was working for A. on a temporary basis as of October 2014 until April 2016. During the course of the employment relationship B. carried out his work from home. A. had not provided a permanent suitable workplace for B., therefore B. had to make use of one of the rooms in his private apartment as office and archive. Neither did the employment contract contain any provisions on compensation for rental costs in case of home office work nor has any verbal agreement been reached in this regard.
B. brought action against A. for payment of claims arising from the employment relationship for the period of 1 July 2015 until 13 April 2016. The labour court of first instance upheld B.’s lawsuit and, inter alia, awarded compensation for part of the rental costs in the amount of CHF 1,425 to B. (i.e. CHF 150/month for a period of 9.5 months). The cantonal court of second instance dismissed A.’s appeal.
The labour court of first instance assessed the claim for compensation based on art. 327 CO. Conversely, the cantonal court of second instance, as well as the Swiss Federal Supreme Court, examined the claim based on art. 327a CO. In both cases, the claim for compensation exists ex lege. Art. 327a CO can only be derogated from in favour of the employee. Agreements to the contrary are null and void. The employer must reimburse the employee for all expenses necessarily incurred in the performance of work.
B. had not argued that he had rented the room, which was used as office and archive, with regard to home office work. The doctrine states that if the employer does not offer the employee a suitable workplace, the work infrastructure at home is in any case deemed necessary for the work performance and is subject to compensation under art. 327a CO. Some of the doctrine takes, however, the view that no compensation is due if the expenses would have incurred anyway. The latter view is rejected by the Swiss Federal Supreme Court. Whether work expenses incurred directly or indirectly is not the decisive factor, but whether the expenses were ultimately in the employer’s interest.
A. brings forward, that the determination of the compensation in the amount of CHF 150 per month was arbitrary. It is evident, that no clear distinction between private use of a room on one hand and professional use on the other hand can be drawn. According to the Swiss Federal Supreme Court’s case law, an employee cannot be required to provide strict evidence with regard to the expenses incurred. If these cannot be proven in terms of exact figures, the judge must make an estimate as it was the case in the present decision. Due to the fact that A.’s arbitrary complaint was not substantiated enough, it was not admitted by the Swiss Federal Supreme Court.
The Swiss Federal Supreme Court dismissed A.’s appeal as far as it was admitted.
Coronavirus related home office
The decision was reached in April 2019 before the coronavirus outbreak. With the recent spread of the coronavirus, many employers ordered their employees to work from home. As employees had to work from home on an involuntary basis, the case is similar to the decision discussed above.
The main difference is that B. was not offered a suitable workplace permanently, whereas coronavirus related home office has only been ordered for a limited time period. Apart from the extraordinary situation due to the coronavirus pandemic, employees regularly have a fully equipped workplace available. Further, the employees were not ordered to work from home because it was in the employers’ interest, but because employers were following the authorities’ recommendations in order to protect employees’ health. Also, in some companies, employers only encouraged employees to work from home but there was no obligation to do so.
Even though the Swiss Federal Supreme Court’s decision of 23 April 2019 cannot be applied directly to the coronavirus related home office situation, this does not mean that there are no cases where compensation might be due by the employer. Courts will have to assess on a case by case basis whether a compensation for temporary home office is justified. This could be the case if the home office constitutes a severe restriction for the employee. As an example, an employee who is living in a small flat with other family members could be granted compensation even if he or she only worked from home for a shorter time period.
Marco ToniPartner Attorney at law
Marco Toni, attorney at law, is a partner in our Zurich office. He focuses on domestic and international M&A transactions, private equity, corporate governance and general corporate, stock exchange and capital markets laws.T: +41 43 434 67 15 M: +41 79 557 62 15 E: firstname.lastname@example.org