26 May 2020

Compensation for home office costs: No reason to panic

Over the weekend, the media extensively covered the Federal Supreme Court's decision BGer 4A_533/2018 of 23 April 2019, according to which employees who work home-based ("home office") are entitled to (proportional) compensation for rental expenses. This decision is already more than one year old and cannot simply be applied to the current situation (COVID-19), in which many employers exceptionally and temporarily have their employees work from home:

Legal background

If an employee (partly) works from home, the employer must provide him/her with the necessary work equipment and materials, such as a computer (including screen and mouse etc.), a telephone and office equipment etc. (or compensate him/her adequately for such equipment/material; Art. 327 of the Swiss Code of Obligations ["CO"]). However, the parties to the employment contract are free to enter into a different agreement regarding the supply and reimbursement of costs, respectively, for the working equipment and materials. In practice, there are sometimes contractual provisions according to which the employee must use his private work equipment and materials without any compensation.

In addition, the employer must, in principle, reimburse the employee for the necessary expenses incurred by him/her as a result of the home-based work (Art. 327a CO). These expenses include, among other things, costs for communication, internet, electricity, heating and - in accordance with the aforementioned decision - also (part of) the rental costs. This provision is generally not subject to the disposition of the parties. If the home office work is carried out in the interest of the employer, he/she must (mandatorily) reimburse the employee for the corresponding necessary costs. The agreement of a lump-sum compensation is permissible, provided that it covers all necessary expenses incurred.

Home office is in the employer's interest if the employer does not provide the employee with a suitable workplace or no workplace at all. The now controversially discussed Federal Supreme Court decision BGer 4A_533/2018 must be seen in light of this. The court only approved the claimed compensation for the (proportionate) rental costs for the home office because the employer had not provided the employee with a workplace.

Home office due to COVID-19

In recent months, many employers have encouraged or ordered their employees to work temporarily home-based. However, this home office work is not due to the failure of the employer to provide the employee with a (suitable) workplace, but primarily serves to protect the health of the employees and to implement the recommendations issued by the Swiss Federal Council in this context. Home office work is therefore not (only) in the employer's interest. Rather, we are currently in an exceptional situation in which both an increased duty of care of employers and an increased duty of loyalty of employees apply.

Against this background, we are of the view that a differentiated application of the aforementioned legal provisions is currently justified: Insofar as an employee disposes of suitable working materials and equipment for home office work, he/she shall – based on his/her duty of loyalty – make these available or use them without compensation. Likewise, he/she must bear the necessary expenses (e.g. for rent, electricity or internet) insofar as these are incurred (to the same or similar extent) even without the home-based work. Only if the employee lacks a suitable infrastructure (including office space, internet access etc.), the employer must provide him/her with the appropriate equipment, technical means or space respectively bear the corresponding costs.

However, due to the mandatory nature of the provision concerning compensation for necessary expenses in particular, it is at this stage not possible to assess conclusively how the courts will decide on the obligation to bear costs (of the employer) in connection with the home office ordered due to COVID-19.

If employers wish to retain the now often well-established home office in the long term, the above-mentioned provisions must be observed and appropriate agreements must be made regarding the compensation of working materials/equipment and costs.

If you have any questions on this topic, our employment law team will be happy to assist you at any time.

Categories: Employment Law

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