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Protection of Workers' Claims (Employer's Insolvency) Convention, 1992 (No. 173) - Switzerland (RATIFICATION: 1995)

Other comments on C173

Direct Request

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Replies received to the issues raised in a direct request which do not give rise to further comments

2019

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Articles 7(2) and 13(2) of the Convention. Limits to wage claims protected by means of a privilege and by a guarantee institution. The Committee notes that, in its communication of 17 September 2010, the Swiss Federation of Trade Unions (USS) indicated that the federal chambers accepted the Zanetti parliamentary initiative, supported by the USS, aiming at limiting the privileged protection of the highest salaries in the event of bankruptcy so as to avoid the settlement of wage claims being restricted by some very large claims. It also notes that, following the acceptance of this initiative, section 219(4) of the Act on debt recovery and bankruptcy (LP) was amended by Federal Act of 18 June 2010 and, as a result, first-rank privilege is now granted to wage claims relating to a period of up to four months and an amount not exceeding the maximum annual income insured under the compulsory accident insurance.

With respect to wage claims protected by a guarantee institution, the Committee notes that, under section 52(1) of the Federal Act on compulsory unemployment insurance and compensation in the event of insolvency (LACI), read in conjunction with section 3(2) of the LACI, compensation in the event of insolvency covers wage claims relating to a period of the last four months, at the most, arising from the same employment relationship, and limited to a monthly amount not exceeding the maximum monthly income insured under the compulsory accident insurance.

Recalling that, pursuant to Articles 7(2) and 13(2) of the Convention, where the workers’ claims protected by means of a privilege and by a guarantee institution, respectively, are limited to a prescribed amount, this amount must be adjusted as necessary so as to maintain its value, the Committee requests the Government to provide information on the ceilings set under section 219(4) of the LP and section 52(1) of the LACI.

Article 12(a) and (b). Claims protected by a guarantee institution – Claims for wages and holiday pay. The Committee notes the judgment of the Federal Tribunal dated 25 February 2011, a copy of which was attached to the Government’s report, according to which the compensation in the event of insolvency does not cover claims for unused days of leave when workers have not received holiday pay throughout the duration of their employment contract’s duration, nor does it cover claims for overtime pay. It recalls that, according to Article 12(a) of the Convention, workers’ claims protected by a guarantee institution must include wage claims without any distinction being made between basic wages and overtime pay. In addition, under Article 12(b), protected claims must also include claims for holiday pay. The Committee requests the Government to indicate how the national legislation ensures compliance with these two requirements of the Convention in the light of the abovementioned case law of the Federal Tribunal.

Article 12(d). Claims protected by a guarantee institution – Severance pay. Further to its previous comment, the Committee notes that the Government refers to the case law of the Federal Tribunal according to which the compensation in the event of insolvency covers only wage claims for work actually performed and not claims arising from the unfair and immediate dismissal of a worker. It has not been made clear, however, whether severance pay (being separate from compensation for unfair dismissal) is actually among the wage claims covered by the insolvency protection regime, as required under Article 12(d) of the Convention. The Committee requests the Government to provide further clarification in this regard. In addition, it draws the Government’s attention to Paragraph 9 of the Protection of Workers’ Claims (Employer’s Insolvency) Recommendation, 1992 (No. 180), according to which protected claims should include payments due in lieu of notice of termination of employment (clause (e)), and severance pay, compensation for unfair dismissal and other payments due to workers upon termination of their employment (clause (f)).

Parts III and IV of the report form. Judicial decisions and application in practice. The Committee requests the Government to provide information on the practical application of the Convention, such as statistical data on the number of bankruptcies per year or the total amount of workers’ claims that have been settled through preferential treatment as prescribed by the Act on debt recovery and bankruptcy as well as the sums paid by the guarantee institution. The Government is also requested to continue to provide information on the case law of the Federal Tribunal which might have an impact on the implementation of the Convention.