Stuck in Paradise? The Consequences of Being Unable to Work Due to a Delayed Return from Vacation

In labor law, the principle of “no work, no pay” applies. This means that the employee generally bears the risk of loss of wages, and the employer is not obligated to pay wages if the employee is prevented from performing work.

This principle is superseded by the obligation to continue paying wages in the event of subjective inability to work (Art. 324a para. 1 CO). If the employee is unable to perform work through no fault of their own for reasons related to their person (illness, accident, fulfillment of legal obligations, or performance of a public office), the employer must pay the wages for the time in question. Consequently, the employee is entitled to the wages they would normally receive for the duration of their absence, which specifically includes allowances and commissions. This obligation to continue paying wages is, however, subject to certain restrictions regarding its commencement, duration, and amount, which will not be discussed further in this article.

A typical example of a subjective inability to work is the flu, which causes an employee to be absent for a few days. The employee is protected by law (at least temporarily) in the event of illness and continues to receive their wages.

In contrast, where there is an objective reason for the inability to work, the principle mentioned in the introduction applies, according to which the employee bears the wage risk. Accordingly, the employer generally owes no wages for the period during which the employee is unable to perform work.

This principle, however, is subject to a limiting exception: namely, the employer bears the operational and economic risk (see Art. 324(1) CO). If the employee is prevented from performing work due to operational disruptions, the employer must bear the loss and remains obligated to pay wages.

If the objective impediment cannot be attributed to the employer’s operational or economic risk, it generally falls within the employee’s sphere of risk. This is the case, for example, when the impossibility or unreasonableness of performing work affects not just individual employees but a large group of people. This includes travel bans, breakdowns in the transportation network, or flight cancellations. This topic is highly relevant due to the ongoing conflict in the Middle East. Currently, many employees whose flights have been canceled are unable to return home from their vacations in time to resume work. What applies?

If an employee returns late from vacation in Dubai because air traffic has been suspended, this constitutes an objective reason preventing work, for which the employee bears the risk of wage loss. The employer is not obligated to pay wages during the additional period of absence.

As an alternative to a temporary suspension of wage payments, the employer may, in consultation with the employee, arrange for the reduction of overtime (see Art. 321c para. 2 CO) or the use of additional vacation days (see Art. 329c para. 2 CO).

If, on the other hand, the employee was on a business trip at the employer’s request, the employer bears the wage risk. In this case, the employer remains obligated to pay wages even if the return is delayed for the reasons mentioned above.

For business trips to high-risk areas, employers are therefore well advised to take into account the risk of a delayed return and, where possible, to make arrangements that allow work to be performed from abroad in the event of a delayed return.

If you have questions regarding inability to work or require other assistance with employment law matters, our attorneys are happy to assist you.

The content of this newsletter does not constitute legal advice and should not be used as such.