COVID-19 News

Per article 6 of the Labor Act, the employer is obligated to avoid any adverse health effects to his employees in the workplace. The employer must therefore take all protective measures that are reasonable within the context of the given business, i.e. that the business can sustain in the prevailing economic and technical environment. Due to the drastic impact of the COVID-19 pandemic, the employer is additionally obligated to ensure implementation of and adherence to Federal Council and Federal Office of Public Health (FOPH) ordinances in the workplace. This serves the protection of the employees’, as well as of other business stakeholders’ (e.g. clients’) health.

The FOPH and State Secretariat for Economic Affairs (SECO) have published a bulletin summarizing the guidelines regarding occupation safety and health obligations. The bulletin is available (at the time of writing in German, French and Italian only) through this link.

We recommend allowing employees to work from home whenever possible, and to reduce the number of employees physically present at the workplace such that adherence to federal hygiene and social distancing guidelines is possible. By allowing employees to forgo the use of public transportation, employers further fulfill their fiduciary duty.

Yes, the same provisions apply as with other illnesses. The employee’s inability to work must be attested to by a medical certificate and the employer is subject to the obligation of payment of wages in case of no-fault occupational disability.

It remains within the employer’s discretion to authorize for which dates vacation time may be used, whereby employee preferences are to be accommodated as much as business needs permit. In this extraordinary situation, the employer’s business needs take on increased priority. Thus, the employer can insist that already planned vacation time is taken as scheduled, even if this means that the employee cannot follow-through on previously made travel arrangements abroad. In order to mandate future vacation dates, the employer must provide the employee with at least 3 months’ advance notice.

The Federal Council issued a special temporary provision on March 16, 2020 regarding shareholder meetings. This temporary provision allows the determination to be made, without observance of an invitation period, that a shareholder meeting be conducted in writing, through electronic media or, respectively, through an independent proxy designated by the corporation. This option is noted under Art. 6a of the Federal Council’s COVID-19-Ordinance 2.

Important: When conducting a meeting in writing or through electronic media, shareholder rights (to participate, vote and to table of resolutions) must still be upheld. Votes by proxy must be recognized and quorums must be maintained. This is and remains as the board of directors’ responsibility.

If the 2020 shareholders meeting is to be conducted in writing or through electronic media, the board of directors can announce this by written or electronic communication and no later than 4 days before the event. The invitations to the meeting must be made in accordance with the timelines set out in the articles of association.

In response to COVID-19 pandemic’s drastic impacts on financial markets and the overall economy, the Swiss Financial Market Supervisory Authority (FINMA) outlined regulatory relief measures in FINMA Guidance 2/2020 of March 31, 2020 and FINMA Guidance 3/2020 of April 7, 2020.

FINMA provided the banks with clarifications for dealing with the COVID-19 credits with federal guarantees within the framework of the capital and liquidity requirements. Additional clarification was provided on temporary exemptions relating to the leverage ratio and on risk diversification. So, when calculating the leverage ratio in accordance with the Capital Adequacy Ordinance (CAO), deposits with central banks shall be excluded. This relaxation applies until July, 1 2020. Funds released due to this relaxed leverage ratio provision may not be distributed. Also the risk diversification provisions have been relaxed for banks in light of observed market turbulence-based increases of margin payments to counterparties. Such increase of margin payments can result in upper limits as set out in the CAO being exceeded in the context of the risk diversification requirements. To allow banks more time to manage such increased positions if needed, the usual upper limits may, until July 1, 2020, be temporarily exceeded up to the limits specified in FINMA Guidance 2/2020. This relaxation is valid for cases where the upper limit is exceeded before 1 July 2020.

Regulatory relief for insurance companies, groups and conglomerates (hereinafter insurance providers) includes among others an extension of the April 30 annual reporting deadline. FINMA reporting requirements prescribe annual filing of the annual report, the supervisory report for the previous fiscal year as well as the target capital and risk-bearing capital calculations (SST reporting) by April 30. Insurance providers must further post their report of financial condition on their websites no later than April 30. The deadline has been extended to May 31, 2020 for insurance providers unable to timely fulfill annual reporting requirements as a result of the COVID-19 pandemic, provided that they notify FINMA of this inability prior to April 30,2020. FINMA further will accept SST reports with reduced content this year.

Regulatory relief concerning anti-money laundering provisions for the onboarding of new clients by financial intermediaries will also be provided until July 1, 2020. In principle, any new client’s identity must be verified through a government-issued identification document with a photo (hereinafter government ID). All documents necessary for the identification of the client and of all persons involved in the related business transactions must be presented in the correct and complete format before an account may be opened or any activity as the new client’s financial intermediary may be undertaken. When onboarding of a new client occurs by written or online correspondence rather than in person, the financial intermediary must request an authenticated copy of the client’s government ID. The authentication can, for example, be made by a notary public or a licensed Swiss attorney. Relief measures provide that a new client may be onboarded with simple (i.e. not authenticated) copy of the client’s government ID. The authentication must then be completed within 90 days. Self-regulatory organizations may grant analogously facilitated onboarding to their associated financial intermediaries.

The board of director’s obligations remain unchanged per Article 725 Par. 1 and 2 Code of Obligations.

If over-indebtedness was ascertained after December 31, 2019, the requirement to notify the applicable court is waived under the following conditions:

1. The corporation was not over-indebted as of December 31, 2019. A corporation is considered as over-indebted as of December 31, 2019, if it was not obligated to notify the applicable court based only on the subordination of a sufficient number of creditor claims. The reason for this being that the subordination of creditor claims does not involve restructuring measures.
2. There is a realistic prospect that over-indebtedness can be remedied by December 31, 2020. The board of directors must, using the most comprehensive data available, assess the corporations economic and financial positions and, based on this assessment, be able to develop a positive prognosis.

It is important that the board of directors documents and justifies its decision in writing. This is usually done in the form of detailed minutes of the board of directors meeting. The documentation based on which the board of directors reached its decision is to be included with the meeting minutes. Evidence that the corporation was not over-indebted as of December 31, 2019 may be provided in the form of the annual financial statements for the fiscal year ending December 31, 2019. If December 31, 2019 was not the end date of the corporation’s last fiscal year, the preparation of interim financial statements for the date of December 31, 2019 is recommended. Supporting the prognosis on remedying over-indebtedness by December 31, 2020 relies heavily on financial planning documents (e.g. liquidity plans, interim going concern and liquidation value statements, etc.) and can be supplemented with other suitable documentation. Interim financial statements as listed here do not need to be audited.

Failure by the board of directors to meet these documentation obligations would constitute negligence and board members could be held personally liable for any resulting damages.

As an alternative option, the board of directors can apply to the responsible probate court for a COVID-19 Deferment of up to 3 months. This application fulfills the board of directors’ legal obligation to report over-indebtedness. Applications must credibly represent and, to the highest degree possible, show proof of the respective company’s current finances and assets. The prerequisite that the corporation was not over-indebted as of December 31, 2019 applies here as well. For purpose of COVID-19 Deferment applications, corporations are not considered to be over-indebted if subordination of creditor claims to the full extent of over-indebtedness can be shown.

By way of a patient decree, a person can establish advance directives regarding the use of medical treatments in a situation where the person is no longer capable of judgement. The patient decree may also designate a health-care proxy who is authorized to make decisions on the person’s behalf in such a situation. Unmarried persons with a life partner can additionally provide authorization for the attending doctors and caregivers to disclose information subject to doctor-patient confidentiality and on the patient’s condition to the life partner.

The Swiss Intensive Care Medicine Society points out the current importance of a patient decree for persons with increased health risks. This is to help ensure that intensive care units do not provide life-sustaining treatments to patients who may not wish to receive them. Therefore, persons with increased health risks are advised to specify whether life-sustaining treatments, such as use of a ventilator, should be administered in case of serious illness.

Given the current situation, the advice to consider the questions surrounding serious illness and the preparation of advance medical directives through a patient decree applies beyond persons with increased health risks. Persons who already have a patient decree in place should carefully review and determine if any amendments are necessary, as their intended directives may, with regards to a serious infectious disease such as COVID-19, deviate from existing directives concerning the treatment of other diseases or not be sufficiently covered in the current decree. Should the existing directives concerning other types of illnesses not fully align with the patient’s wishes regarding infectious disease treatments, an additional provision may be added to the patient decree, e.g. declining the use of a ventilator in case of infection by the COVID-19 virus.

The patient decree must be completed in writing (it does not have to be hand-written), dated and signed. When preparing a patient decree, consulting with the primary care physician on specific medical questions may prove helpful. The original patient decree should be safely kept at home and copies provided to immediate family members. The existence of a patient decree, and its place of storage can be inscribed on the person’s health insurance card.