Holiday entitlement for hourly wage earners

Previously, hourly employees received holiday compensation per hour to account for the prescribed vacation days. Due to a ruling by the Federal Court on January 30, 2023, there will likely be changes in the handling of holiday compensation for hourly employees in the future.

An employee, working full-time with a weekly working hour of 45 hours and an hourly wage of 18 Swiss Francs, plus a percentage-based holiday compensation, sued the company after being dismissed. The Civil District Court of Basel-Landschaft West ordered the employer to pay CHF 17,340 in holiday compensation, which was confirmed by the Basel-Landschaft Cantonal Court. The employer's appeal was dismissed.

According to Article 329d of the Swiss Code of Obligations, employees must not be financially disadvantaged during their vacation compared to if they had worked. Furthermore, vacations must not be replaced by monetary payments or other benefits during the employment relationship. This provision is intended to ensure that employees have the necessary rest during their vacations and do not face financial difficulties due to loss of income. Despite this mandatory provision, case law allowed for deviations in the calculation of holiday entitlement for irregular work assignments. This was done to accommodate the difficulty and complexity involved in calculating holiday entitlement.

However, according to the latest Federal Court decision, with today's software offerings and time tracking systems, calculating holiday pay for irregular work should no longer be unreasonable. The protective purpose of Article 329d of the Swiss Code of Obligations would not be fulfilled if deviations from the compensation prohibition were allowed for full-time employment due to fluctuations in income.

The practice will show how the payment of holiday entitlement will be handled in the future for irregular employment without violating Article 329d of the Swiss Code of Obligations. We will gladly continue to inform you about this topic.