Mo. - Fr.: 08:00-12:00 & 13:30-17:00 Uhr
Mo. - Fr.: 08:00-12:00 & 13:30-17:00 Uhr
Prior to the COVID-19 pandemic, there was a rising trend among employees to plan for extended travel, sabbaticals, further education, studies abroad, and similar endeavors. Many employers recognize the value of such undertakings for their employees within their organizations, allowing for the realization of these plans without necessarily terminating the employment relationship. However, interruptions to work activities carry inherent risks.
Unpaid leave is typically agreed upon at the employee's request. The motivations for such leave are diverse, with the most common being extended travel, further education or studies abroad, and sabbaticals. If an employer wishes to suspend an employee's work obligations, this usually occurs through a leave of absence, while the obligation to pay wages continues, unless otherwise agreed. This arrangement corresponds to unpaid leave. The COVID-19 pandemic has significantly accelerated the digitization within many companies. With the ability to work externally, engage in video conferences, and so forth, unpaid leave may often be replaced by a reduction in workload, as employees can perform their duties from virtually any location around the globe.
There is no general statutory provision governing unpaid leave. However, specific provisions regarding certain types of unpaid leave can be derived from the law. According to Article 329, paragraph 3 of the Swiss Code of Obligations (OR), employees are entitled to customary free hours and days, as well as "the time necessary to seek another position after notice of termination has been given." Thus, only a limited number of free hours or days, which are considered customary, are permitted. In practice, this regulation is often applied to medical appointments, bereavements, residential moves, etc. It does not cover longer absences required for extended travel, further education, or studies. Article 329e OR regulates unpaid leave for extracurricular youth work, Article 329f OR in conjunction with Article 35a of the Labor Act (ArG) addresses maternity leave, and Article 329g OR governs paternity leave. Further details on these are provided below.
The law does not specify a particular regulation regarding the unpaid leave addressed here. However, it is conceivable that the terms of unpaid leave could be established within a collective labor agreement (GAV) or in the individual employment contract, as well as in related regulations. If no provisions are set forth in the applicable GAV or individual employment contract, a separate agreement on unpaid leave must be established between the employer and employee for each individual case. This can occur in writing, verbally, or implicitly. Employees are advised to insist on an explicit written agreement.
According to Article 329e OR, employees are entitled to unpaid leave for unpaid leadership, caregiving, or advisory roles in extracurricular youth work within a cultural or social organization, as well as for the necessary training and education. This entitlement is limited to one working week per service year. Therefore, extracurricular youth work only qualifies for unpaid leave if it is provided without compensation. Generally, there is no entitlement to wages during the leave unless otherwise agreed upon between the contracting parties, stipulated in a normal employment contract, or set forth in a GAV for the benefit of the employee.
Article 329f OR provides that female employees are entitled to a minimum of 14 weeks of maternity leave. Article 35a, paragraph 3 of the ArG stipulates that mothers cannot be employed during the first eight weeks post-delivery and can only be employed after that for up to 16 weeks with their consent. Thus, there is a work prohibition for the first eight weeks. During the subsequent eight weeks, the mother must consent to her employment. The ArG does not impose an obligation on employers to pay wages during maternity leave. However, a limited compensation entitlement is provided through the income compensation scheme. Consequently, mothers receive maternity compensation from the day of childbirth (potentially upon the mother's application in cases of prolonged hospitalization of the newborn, starting from when the child comes home) for 98 days at a rate of 80% of the average earned income (Articles 16b ff. EOG).
Paternity leave under Article 329g OR can be taken flexibly within six months after the child's birth. The entitlement to paternity compensation is regulated in the EOG and EOV.
During unpaid leave, the employment relationship remains in effect. Taking unpaid leave results in the suspension of the main obligations of the employment relationship, namely the employee’s obligation to work and the employer’s obligation to pay wages. Certain ancillary obligations from the employment relationship (e.g., the employer's right to issue instructions and the duty of care, as well as the employee's duty of loyalty) continue to exist, albeit in a limited form. Unpaid leave is factored into claims where the duration of the employment relationship is relevant (e.g., notice periods, wage continuation during incapacity to work). There are particular considerations regarding social insurance, which will be elaborated upon below.
In general, the right to terminate employment is not restricted by unpaid leave, just as it is not restricted by vacation. However, it is conceivable that through unpaid leave, an (implicit or tacit) agreement has been reached indicating a suspension of notice periods. This means that, in such cases, the notice period begins only after the unpaid leave concludes. To avoid potential uncertainties, a clear regulation is advisable. Furthermore, an employer's ability to terminate employment due to the employee's lack of availability may be limited. Since a termination only takes effect upon receipt by the addressee, it must be actually deliverable. Regarding delivery during vacation, the Federal Court and prevailing legal doctrine maintain that a termination is considered delivered only when it can be reasonably expected that the recipient will acknowledge it upon their return. Conversely, if the employee has remained at home and arranged for mail forwarding, or if they have traveled without the employer's knowledge, a different standard may apply. This reasoning is, in my opinion, analogous to a trip taken during unpaid leave. It should be noted that termination via email, SMS, other messaging services, or similar is also permissible, provided that no written form is stipulated.
Employees are entitled to a minimum of four weeks of vacation per service year, with corresponding adjustments for incomplete service years based on the duration of the employment relationship in the relevant year (see Article 329a OR). This entitlement increases with the duration of the service year. The prevailing legal opinion holds that during unpaid leave, the principle "no work, no vacation" applies, meaning that vacation entitlement does not accrue during unpaid leave.
Whether unpaid leave should be mentioned in employment references is assessed according to standard principles. It is understood that extended absences that are significant relative to the overall duration of the contract should be documented. An absence due to unpaid leave may only be mentioned against the employee's will if failing to do so would present a misleading picture, for example, by leading to incorrect conclusions regarding the acquired work experience. Thus, this is contingent upon the employee’s consent, the duration of the unpaid leave, and the length of the employment relationship.
Due to the absence of a wage claim, the entitlement to wage continuation according to Article 324a is suspended during unpaid leave. Should incapacity for work persist beyond the agreed duration of unpaid leave, the entitlement to wage continuation revives.
Coverage under mandatory occupational accident insurance ceases 31 days after the day on which entitlement to at least half of the wage ceases (see Article 3, paragraph 2 of the Accident Insurance Act - UVG). However, there is an option to enter into a supplementary insurance agreement with the employer's accident insurer, which can extend coverage for up to six months (see Article 3, paragraph 3 UVG). For coverage beyond this period, the employee may take out a voluntary individual accident insurance policy. Certain insurers (particularly SUVA) are accommodating and will pay daily benefits during unpaid leave if the accident disrupts the purpose of the leave. The daily benefit is based on the last wage received prior to the accident (see Article 22, paragraph 3 of the UVV). For irregular employment, a reasonable average wage is considered (see Article 23, paragraph 3 of the UVV). For necessary medical treatment abroad, the insured is reimbursed up to a maximum of double the costs that would have been incurred for treatment in Switzerland (Article 17 UVV).
As previously noted, the entitlement to wage continuation is suspended during unpaid leave. This also applies to any potential daily sickness allowance. It may therefore be advisable to take out individual sickness allowance insurance for the duration of unpaid leave.
Depending on the duration of unpaid leave, there may be a gap in contributions unless the spouse has made contributions of at least double the minimum contribution (Article 3, paragraph 3 of the AHVG). A contribution gap can also be avoided by paying the minimum contribution for non-working individuals (CHF 413.00/year, as of 2021) (Article 10, paragraph 1 of the AHVG), which is highly recommended.
Unemployment Insurance (ALV)
If unpaid leave lasts longer than 12 months, the contribution period is no longer preserved within the two-year reference period