Swiss companies may reduce employees’ hours to help compensate for the current exchange rate fluctuations, Economics Minister Johann Schneider-Ammann announced on Tuesday. Most business groups and unions are pleased.
The move comes in response to the extraordinary appreciation of the Swiss franc after the Swiss National Bank (SNB) decided to axe the CHF1.20 exchange rate cap against the euro on January 15. The Swiss franc is currently at parity with the euro.
By allowing short-time work – in which people work fewer hours while the state tops up their pay – Schneider-Ammann hopes to preserve jobs. Supporters of short-time working say it allows companies to retain workers they might find hard to re-recruit later.
Employees whose hours are reduced should be eligible for unemployment compensation.
Unemployment insurance law provides for workers to be covered when the short-time work is economy-related and likely to be only temporary. However, unemployment insurance does not cover short-time work caused by normal business risks.
Although exchange rate fluctuations could be considered a regular risk for a business, the economics ministry says that the problems encountered in the wake of the SNB’s abolition of the minimum exchange rate should be classified as extraordinary in terms of extent and scope.
Certainty and flexibility
“The decision gives firms certainty. It makes it clear that in this situation, exchange rate fluctuations are not considered operating risks,” Roland Müller, director of the Employers’ Association, told Swiss public radio, SRF.
Both Müller and the Swiss Business Federation (economiesuisse) said they did not believe that many companies would avail of short-time work just yet.
“In the long term, however, this depends on demand from the eurozone,” Cristina Gaggini of economiesuisse told the Swiss News Agency.
Hans-Ulrich Bigler, director of the Association of Small and Medium-Sized Enterprises, was quoted as saying that he was relieved because the measure would help give businesses more flexibility.
Travail Suisse, a national umbrella group of unions, welcomed Schneider-Ammann’s decision and called short-time work the right tool to support industries in crisis situations.
However, the main Trade Union Federation dismissed the decision as “plaster policy” – as in trying to heal a big wound with a little bandage. The federation called on the SNB to bring the franc-euro exchange rate back to a sensible level.
swissinfo.ch and agencies