Reichlin Hess Attorneys at Law, Tax Advisors, Notaries, Zug, Switzerland

Missed opportunity to eliminate discrimination between men and women in operating allowances

Discrimination between men and women in the economy is repeatedly subject of political discussions and legal proceedings. With the Gender Equality Act of 24 March 1995 the legislator has given emphasis to this social concern for the first time. Much has happened since then, but discrimination between men and women has not been completely eliminated yet, neither in economic life nor in legislation as the current ruling of the Swiss Federal Supreme Court shows.

What happened

A self-employed lawyer became a mother in February 2018 and applied for maternity compensation as well as an operating allowance to cover the running costs of her law firm. The Compensation Office of the Canton of Zurich paid the maternity compensation, but refused to pay the operating allowance. The Social Insurance Court of the Canton of Zurich confirmed the decision of the Compensation Office. The mother then filed an appeal with the Swiss Federal Supreme Court.

The mother’s arguments

In her appeal, the self-employed mother asserted that the refusal of an operating allowance for mothers was discriminating and violated Article 8 para. 2 and para. 3 of the Federal Constitution. The mother argued that the costs for her law firm would continue to accrue during her maternity leave – in the same way as for men and women on (military or community) service. According to her this unequal treatment was only due to gender and happened for purely financial reasons.

Decision of the Swiss Federal Supreme Court (9C_737/2019)

The Swiss Federal Supreme Court denies a “unified purpose” of the employment and maternity compensation regulations with reference, among other things, to the materials for the parliamentary initiative “Revision of the Employment Compensation Act. Extension of income compensation claims to working mothers”, which preceded the establishment of the maternity insurance. In the political discussion, this different treatment was justified by the costs and administrative effort.

In the opinion of the Swiss Federal Supreme Court, discrimination between men and women is fundamentally out of the question if the insured “risk” (maternity) can only materialise for women. On the other hand, men should also not be discriminated against because they cannot receive insurance benefits from the insurance specifically created for maternity. In other words, the Swiss Federal Supreme Court thus confirmed that the legislator may also provide for statutory unequal treatment (in casu for financial reasons) on the basis of physical differences between men and women without it violating the prohibition of discrimination.

Hence, a self-employed woman serving in the army receives compensation for loss of earnings and an operating allowance whereas a self-employed mother only receives maternity compensation. According to the Swiss Federal Supreme Court, these facts are not comparable, although it is precisely the proximity to the compensation for loss of earnings which was decisive for the regulation in the Compensation for Loss of Earnings Act. In our opinion, the fact that at the time the unequal treatment was justified with financial reasons is nowadaysno longer convincing .

The Swiss Federal Supreme Court rejected the mother’s appeal and stated that it was not the task of the court to make the necessary adjustments in this regard. However, two corresponding motions named “Operating allowances in the case of maternity compensation for self-employed persons” have been adopted in the Swiss Parliament. It is now up to the Swiss Federal Council to establish the legal basis for self-employed women to receive operating allowances in the case of maternity.

Conclusion

Until the legislator has created the basis for an operating allowance in case of maternity, the Compensation Offices may reject claims for operating allowances to the disadvantage of self-employed mothers. It remains to be seen whether the European Court of Human Rights in Strasbourg will have to deal with this matter.