28 October 2020

Paternity Leave

UPDATE:

The recently adopted paternity leave will enter into force on 1 January 2021. The Federal Council has adopted the corresponding implementing provisions. However, unlike the introduction of maternity pay in 2005, no transitional provisions are provided for the introduction of paternity leave.

The question arises as to whether, under certain circumstances, a birth before the entry into force of the new provisions may also give rise to an entitlement to paternity leave with corresponding compensation: It would be possible, for example, that although the child was born in 2020, the six-month reference period (see below) has not yet expired when the new provisions come into force on 1 January 2021.

Our position is the following: Only births occurring after the entry into force of the new rules entitles to a right to paternity leave and compensation. The relevant legal bases do not provide for any prior effect. This view is also in line with the explanations provided by the Federal Social Insurance Office (FSIO) in its FAQ on paternity leave. The initiators of paternity leave also share this view.

However, the voluntary granting of paternity leave for births within a certain period of time before paternity leave takes effect could be a smart HR strategy for employers.

In future, fathers will have a statutory right to two weeks' paid paternity leave. The Swiss voters accepted the corresponding bill in the vote on 27 September 2020.

Starting point: Call for more modern parental leave models

In the context of equality, calls for more generous parental leave models have been growing louder for some time. Paternity or parental leave has already been the subject of various parliamentary debates and initiatives in recent years, with the aim of also granting fathers the right to paid leave after the birth or adoption of a child.

While working mothers are legally entitled to a minimum of 14 weeks' paid maternity leave after the birth of their child under the Swiss Code of Obligations and Federal Act on Compensation for Loss of Earnings (article 329d of the Swiss Code of Obligations [CO]; article 16b of Federal Act on Compensation for Loss of Earnings [EOG]), fathers were previously not legally entitled to paid paternity leave. According to the current legal situation, a father can claim one or two days of paid paternity leave after the birth of his child pursuant to article 329 para. 3 OR within the framework of the "usual hours and days off". However, many employers in both the private and public sectors already voluntarily grant young fathers more than the statutory minimum.

New: Two weeks paternity leave

Now it has worked out: With the initiative "For a reasonable paternity leave – for the benefit of the whole family" of 4 July 2017, the initiators demanded the introduction of a minimum of four weeks' statutory paternity leave, which is compensated via the compensation scheme for loss of earnings. However, the parliament considered the initiative unacceptable due to the high additional charges and the major organisational challenges for companies. As a result, the parliament opposed the paternity leave initiative with an indirect counter-draft for a bill, which, as a compromise, provides for a two-week paternity leave with compensation from compensation scheme for loss of earnings.

The bill drafted for this purpose was adopted by parliament on 27 September 2019. Subsequently, the initiative submitted was withdrawn by the initiative committee. The referendum raised against it was rejected by the Swiss voters in the vote of 27 September 2020, thus approving the bill on two-weeks' paternity leave. The amendment is expected to come into force at the beginning of 2021.

Who is entitled to paid paternity leave?

Paternity leave is granted to men who are the legal father of the child at the time of birth (establishment of the child's relationship by marriage to the mother or by recognition) or who become legal fathers during the first six months thereafter (establishment of the child's relationship by recognition or by a court decision, retroactively to the time of birth).

The entitlement to compensation for loss of earnings during paternity leave also requires, like maternity allowance, that the father (i) was compulsorily insured within the meaning of the Federal Act on Old Age and Survivors' Insurance (AHVG) for nine months immediately prior to the birth of the child, (ii) was engaged in gainful employment for at least five months during this period and (iii) was an employee or self-employed person at the time of the birth of the child.

How much is the financial compensation?

The two-week leave corresponds to 10 working days. Accordingly, fathers are entitled to daily allowances from the compensation scheme for loss of earnings for 14 calendar days. As with maternity allowance, the daily allowance amounts to 80% of the father's average earned income before the birth of the child and is limited to CHF 196 per day.

When can paternity leave be taken?

Paternity leave must be taken in the first six months after the birth of the child. In contrast to maternity leave, the two-week leave can be taken in one go or on a weekly or daily basis.

Analogous to maternity leave, article 329 para. 3 CO provides that the father's entitlement to annual leave may not be reduced due to the paternity leave taken.

Does paternity leave have to be taken?

The right to paternity leave is a right and not a duty of the employee. Accordingly, unlike maternity leave, the employee is not obliged to take paternity leave.

However, an employee cannot waive the exercise of this right, for example by making a contractual commitment not to take paternity leave. As this is a so-called partially compulsory right, the statutory provision can only be contractually amended in favour of the employee.

It should also be pointed out that paternity leave must be taken effectively, otherwise it lapses. Consequently, financial compensation in lieu is not permitted.

Extension of the period of notice

If an employer terminates an employee who is entitled to paternity leave in accordance with article 329g CO before the end of the employment relationship, the notice period is extended by the days of leave not yet taken.

Funding

As with maternity allowance, paternity leave is financed on a parity basis by means of wage contributions under the existing compensation scheme for loss of earnings. The contribution rate for employees and the employer will be increased from currently 0.45% to 0.50%.

Outlook

The final word on maternity, paternity and parental leave has not yet been spoken. Many consider the legal introduction of two-week paternity leave to be a step in the right direction in terms of equality and work-life balance. There is, however, a growing trend towards extending birth-related leave. Currently, the demands for paid parental leave are becoming louder and louder.

Authors:

Categories: Employment Law

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