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Strong franc Sharp rise in Swiss firms using shorter work hours

Almost 600 firms resorted to short-time work in February 2015 to compensate for the current exchange rate fluctuations

(Keystone)

The number of Swiss firms reducing employees’ hours to compensate for the current exchange rate fluctuations has risen sharply since January, the government has confirmed. Cantons Zurich and Bern are the most affected.

In December 2014, 215 firms resorted to short-time work – in which people work fewer hours while the state tops up their pay. In January 2015 this figure rose to 365 and then 568 in February. 

The government has supported short-time work 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 CHF1.07 with the euro. The government believes short-time work will help preserve jobs in Switzerland.

The number of employees forced to reduce their hours has gone from 2,200 in December 2014 to 9,100 in February, the economics ministry confirmed.

The most-affected cantons are Zurich and Bern, followed by Jura, St Gallen and Ticino. The cost of state compensation is not known. 

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.

Most business groups and unions are pleased with this initiative. However, the main Trade Union Federation has 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.

Meanwhile, the official unemployment rate remained unchanged at 3.5% in February, compared to the previous month. The State Secretariat for Economic Affairs (Seco) said on Tuesday that the number of people registered at regional job offices fell by 1,025 to 149,921 last month from January.

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